So what is Fair Trade 2.0?
'Fair Trade 2.0' is about the conversations we need to have - the plans we need to make - to ensure that we are building a Fair Trade system that will be globally relevant into 2022 and beyond...
For us, Fair Trade 2.0 is about sustainable, fair trading businesses that are the anchors for healthy industries, sound communities and resilient families - and responsible consumers.
It is about trade with long term vision - and 'bottomlines' that reflect social and financial returns (a worthy challenge for a young conscience economist!).
It is about fair value chains: "farm to fork" integrity, accountability and transparency that starts with consumers choosing the value of fair trade over pure price...
It is about sharing: 'paying it forward', paying back and earning 'sharing' credits - its about sharing more than money.
This is about letting go of the 'scarcity' mindset and embracing the 'abundance' that already exists. People in a scarcity mindset tend to hoard - afraid that sharing their knowledge/training/skills will create competition, but they fail to see the potential for being part of a more resilient, growth focussed reality. For example - in an ideal world, one of the criteria for anyone who is chosen to attend a training course, sponsored conference or workshop, would be the obligation to share the learnings...
It is also about the 'North' going 'South'... Fair Trade cannot, should not and never ought to have been just about the geographic 'South'.
This is about parts of Europe that find themselves under extreme economic pressure - national debt, low/no economic growth, huge influx of migrants, unemployment... Parts of the geographic 'South' that are flourishing. Paradoxically, Fair Trade should also not be about benefitting 'poor producers' at all costs either; its about fair and non-exploitative practices, fair profits - everyone deserves a Living Wage; no one needs a 'super-bonus' that's larger than the GDP of a small country... This is about a conversation that needs to happen - should anyone be classified 'worthy'? Who decides who is 'worthy'?
It is about each and every fair trading business committing precious resources - time, money and energy - to grow fair trade into the 21st century...
Our current reality...
The sad reality is - no matter how much political 'spin' is added to the numbers - the picture is not improving - it is not improving in South Africa and its not improving in most of the developing countries of the world. The prevailing economic models are broken... it is time to re-think how we think about wealth.
Early in 2016, Stats SA published a comprehensive paper on the South African youth and particularly youth unemployment. The original paper is very detailed and - as is often the case with statistical works - the significance of the findings were slightly swamped by the exhaustive detail. The full paper is available on-line from Stats SA; but more insightful (and easier to read!) was Marianne Mertens' article in the Daily Maverick. The headlines speak for themselves...
Making trade FAIR...
One of the most basic things to encourage in the fair trading conversation is the value of exporting fully beneficiated products - shelf-ready products - products where the revenue from all the production inputs were earned where the products were made (this is the 'healthy industries' bit...).
QUICK NOTE: this is a hypothetical product and the breakdown percentages, particularly in terms of the share of the various agencies in Europe, may be debatable, but the principles are sound; and on average, remarkably accurate).
This breakdown assumes a grinder, containing 100% FLO black pepper (bought from a FLO certified farmer in India - 'south:south' trade = good!), that is packed in South Africa and exported - fully finished (shelf ready) to Europe, where it enters a fairly conventional distribution channel that would include a fair trading wholesaler and a fair trade retailer (like a World Shop).
In the case where the product is sold into a fair trading wholesaler who combines the importer/wholesaler function AND the product is sold into supermarkets, the percentages in the 'north' are slightly higher, but not enough to negate the principle.
In this example, the earnings split between the 'north' and the 'south' are fairly equitable - roughly 50/50 and there is a double premium (benefit to the producers) : the FLO premium for the farmers in India and the contribution to the Fair Trade Trust for the producers in South Africa.
This is a picture of healthy trade.
However, if the FLO pepper from India went directly to Europe, where it was processed, packed and sold, the picture is completely different: The only revenue that is earned in the 'south' is the €0,22 out of the €4,00 sales price (5,5%).
Sadly, this is the revenue reality for most products the consumers in Europe recognise as Fairtrade.
The farmer's revenue on a Fairtrade banana (shelf-ready) is not even vaguely comparable to the Fairtrade story of coffee, or chocolate or jam.
Bottomline - some Fairtrade products are definitely more revenue friendly to the 'south'. Thankfully, the consumers should be able to tell which products were imported fully beneficiated, and which products were processed and packed in the EU.
