With climate change and the current health crisis, alarm bells are starting to ring: the way we have organised the globalisation of the market with international just-in-time value chains makes us extremely vulnerable and is putting more and more pressure on ecosystems. Not to mention the social consequences, like growing inequality.
It is time then to take a different approach to our trade relations. We urgently need to re-localise some of the economic activity in vital sectors like healthcare and the food industry, in order to increase our autonomy and resilience. As it transpired that we were unable to acquire face masks, medical tests and certain medication, the corona crisis laid bare our loss of sovereignty in the healthcare sector in the most painful of ways. The same risk exists for our food industry. We need to de-specialise our areas and define a new ‘food sovereignty’ by collectively deciding how we want to produce and bring our food to market.(1) In this respect, the fact that short supply chains were on the up during the corona crisis is excellent news. Short chains are approaching the critical size, making economic networks between producers, distributors and consumers possible within so-called ‘food belts’ around the cities, for example. However, it is just as important to make the supply chains for so-called non-replaceable raw materials – that cannot be produced in our country, like coffee, cocoa or bananas – sustainable and fair.
In fact, these dramatic events are a chance to make the transition that our society needs: an ecological transition built on solidarity. And fair trade has everything it takes to play a key role in more responsible consumption, in an economy that reduces rather than proliferates inequality, and in organic, agroecological production methods as part of a circular economy.
Social enterprises
Social enterprises are at the heart of fair trade. Most are cooperatives owned and managed by producers, artisans or enterprises whose statues tend to pursue a social and/or ecological goal instead of maximising profit.
As soon as they are released from the obligation to generate large profits for shareholders, these enterprises have more room to:
- provide a better salary to producers and artisans. They are not constantly changing suppliers to drive down costs and maximise profit margins. This creates a fairer distribution of value and power within the chains in order to combat inequality.
- invest in the company by developing new products and new production methods, and by tapping into new markets.
- develop ways of working and production methods that focus on minimising the impact on the environment and promoting a circular economy and agroecological practices. This is in contrast to companies that focus on maximising profit and can only justify investments in sustainability if they increase efficiency.
- set up in locations where other companies do not, in remote areas that are more difficult to access (due to a lack of infrastructure, conflict etc.), and/or target marginalised communities. In this way, these enterprises are the driving force when it comes to social progress.[2]
A trade system to serve ecological and social transition
Fair trade supports these social enterprises, more specifically by paying a price that covers the production costs (including part of the social and environmental costs that are generally passed onto society) as well as a development premium on top. Where necessary, fair trade provides pre-financing of orders and enters into long-term commercial commitments. This spreads the risks more evenly across the links in the value chain so producers can plan their development better. All this goes hand in hand with the traceability of the products, which is essential to make the approach credible, especially for the consumer (this is, among other things, the role of the labels).
Fair trade goes local
Fair trade is a movement that is constantly looking for cohesion, with various different dynamics at play. One of these is an important one: fair trade has long been confined to the North-South solidarity trade, but has since opened up to local trade. First in southern countries like Mexico, India, South Africa, Kenya and Ecuador. Brazil has even gone so far as to introduce legislation that heads in that direction. Then in European countries to obtain a sustainable agricultural model to strengthen the social fabric. In Belgium, various initiatives were launched: the label ‘Prix juste producteur’, Fairbel milk and the ‘Biogarantie Belgium’ label that has adopted certain fair trade criteria. More traditional fair trade organisations like Miel Maya honey, Oxfam, Ethiquable and others have also integrated certain players and local products.[3]
Farming, organic and agroecological agriculture
By re-localising, a certain kind of fair trade bridges the gap between farming in the North and the South, creating more ‘food sovereignty’ for both. Farming is predominantly a family-run operation. According to the FAO, these farming families have all the know-how to understand the local ecology and potential of the land.[4]
When farmers apply agroecological techniques, they create diversified agricultural ecosystems with many different crops, be it horticultural or cash crops. Shade trees are used on the highest tier, medium-sized trees like coffee plants on the middle tier and food crops, for example, on the ground. These diversified agroecosystems make “intensive use of renewable or abundant natural resources (solar energy for photosynthesis, atmospheric carbon for the production of sugars and fats, nitrogen from the air for the generation of proteins etc.).” [5] Agroecology also puts the emphasis on natural fertilisation. It uses animal manure and compost instead of chemical inputs such as synthetic nitrogen fertilisers that emit high levels of nitrous oxide and consume a lot of fossil fuels.
Agroecology is particularly suitable for small producers that can maximise the number of crops in a small area. It also creates agricultural systems that are more resilient to climate change, unlike industrial agriculture that has oversimplified and weakened ecosystems.
The combination of farming and agroecology forms an “agricultural model that responds to the social and environmental challenges of the 21st century”[6] by creating real relationships between the land and the people that live on it. Agricultural engineer Mathieu Cassez: “The industrial model may be ‘of its time’, but it is certainly not ‘modern’ in the sense that it would meet current and future demands.“ [7]
Fair trade and circular economy
Agroecology is one example of a circular economy. But there are also other kinds that are increasingly being picked up by the fair trade movement, like upcycling or recycling. These consist of giving objects or materials a new lease of life.
This is the concept behind Prokritree in Bangladesh, who collect saris, paper and cotton from clothes factories and recycle them into top-quality fair trade bags and baskets. Or Chako in Tanzania, who use rubbish from hotels, resorts and tourism companies in Zanzibar to create light fixtures and other interior design products.[8]
The power of conumer behaviour
Thanks to these more rewarding prices, development premiums, partnerships with social enterprises whose members increasingly practise a circular, agroecological economy, fair trade is part of the future that we want to head towards.
By purchasing fair trade products, the power is in our hands to change the lives of producers, artisans and workers both on the other side of the world and closer to home. By filling our shopping basket with fair trade products, we can do our bit, make choices and send out an explicit message. By choosing fair trade, we give a clear signal to department stores, brands and companies that we refuse to be complicit in the types of trade that put humanity and ecosystems at risk.
Samuel Poos
Trade for Development Centre Coordinator
The ideas expressed in this article are the sole responsibility of the author. They do not necessarily represent those of Enabel (the Belgian Development Agency) or the Belgian Development Cooperation.
