Fair Trade Certified™
SUGAR Review
2010-11
Fair Trade Sugar
Letter from the President and CEO
First and foremost, I want to thank you for your commitment
to Fair Trade. As you know, our goal is to provide more
long-term impact to farmers, workers and the environment
by empowering businesses and consumers to make every
purchase matter. This 2010 sugar impact report outlines a
variety of life-changing projects—completed and in process—
that contribute to that goal and that were made possible
through our partnership.
Now more than ever, Fair Trade sugar farmers are
overcoming unfair trade conditions thanks to the largest-ever
volume of U.S. Fair Trade sugar imports in 2010. This versatile
product reaches the U.S. market as packaged sugar or as
an ingredient in an ever-growing list of consumer packaged
goods, such as chocolate bars, ice cream, bottled beverages,
jams and spreads.
Recent announcements by Ben & Jerry’s and Green & Black’s to
convert their full global product lines to Fair Trade ingredients
will contribute to the continued growth of this category and
deliver exponential impact back to sugar producers.
Supply is growing to meet these new opportunities with
producers joining the Fair Trade system from Guyana, India
and Mauritius. We look forward to adding supply from even
more origins to meet these opportunities and further spread
the benefits of Fair Trade sugar. You’ll learn more about those
efforts in the following pages. We look forward to working
with you in the months and years to come.
Sincerely,
Paul Rice
President & CEO
“Thanks to these sustainable practices, we were able to
invest in the education of our children. My older daughter
is going to the university next year. It’s a great pride for
those of us who never had a chance to go”
– Beth Mondejar
Alter Trade Cooperative, Philippines
Table of Contents
Fair Trade Sugar
04 Building Sustainable Futures
Reach
05 Fair Trade Sugar Origins
Supply
06 The Fair Trade Sugar Supply Chain
07 By the Numbers
09 Spotlight on Paraguay
Impact
10 By the Numbers
11 Price and Premium
Producer Spotlights
12 Cañeros Orgánicos Asociados (CORA),
Paraguay
13 Cañera del Sur, Paraguay
14 Cañera Orgánicos de Iturbe, Paraguay
15 Manduvirá, Paraguay
16 Coopecañera, Costa Rica
17 Kasinthula, Malawi
18 Alter Trade, Philippines
Appendix
19 Fair Trade Principles
20 Frequently Asked Questions
21 Environmental Standards
23 Services and Funding
4
Fair Trade Sugar
Building Sustainable Futures
Sugar Production Around the World
Fair Trade: A Sustainable Solution
Sugarcane is a global food crop that has been cultivated and
traded since the eighth century A.D. and is grown in over
100 countries around the world. The global sugar industry
is a vast and complex system. Between the sugar farmer
and the U.S. sugar consumer, the sugar supply chain is a
broad network of mills, refineries, importers, exporters and
distributors, all governed by international trade laws, global
price pressures and multinational trade relationships.
In the United States, Fair Trade certification for sugar began
in 2005 to help combat this problem and uplift farmers
around the world who were being undervalued by the global
sugar market. Fair Trade supports small-scale sugarcane
farmers by giving them access to international markets and
financial capital through Fair Trade premiums for community
development. Through Fair Trade certification, sugarcane
farmers can develop the business capacity necessary to
compete in the global marketplace. With additional capital
and market access, farmers can earn sustainable prices for
their products, invest in quality improvements and provide a
better life for themselves and their families.
A Struggle for the World’s Sugar Farmers
International trade laws governing sugar imports have
traditionally made it difficult for small-holder farmers to
access more lucrative consumer markets of the United States,
Canada and Europe. World prices for sugar are highly volatile
and often fall far below producers’ costs of production. As a
result, many farmers must sell their sugarcane at a fraction
of its worth; and in doing so, they are relegated to an
unsustainable and unprofitable production cycle, earning less
than they spend on cultivating and harvesting their crops
each year. This situation leaves small-scale farmers in debt
and unable to invest in their farms. The entire community
is affected as sugarcane farmers rely heavily on their own
children for help, limiting their opportunities for education and
perpetuating the cycle of poverty.
This report details the impact of Fair Trade Certified™ sugar
purchases in 2010 and the resulting community development
funds that give producers the opportunity to invest in the
future of their farms and their communities.
5
Reach
Fair Trade Sugar Origins
All across the world, Fair Trade partners are making a difference by sourcing Fair Trade Certified™ sugar. There are 64 sugargrowing cooperatives in the Fair Trade system. The producers supplying the U.S. Fair Trade market in 2010 are located in
Paraguay, Malawi, Costa Rica and the Philippines.
Fair Trade Sugar Cooperatives by Country
Country
Number of Coopertives
Country
Number of Coopertives
Belize
1
Malawi
1
Costa Rica
4
Mauritis
31
Cuba
4
Paraguay
9
Ecuador
1
Peru
4
Fiji
1
Philippines
1
Guyana
5
Zambia
1
India
1
Total
64
6
Supply
The Fair Trade Sugar Supply Chain
Sugarcane must be transported to a sugar mill to be processed
within 24 to 48 hours or it loses its sugar content and value. The
relationship between mills and farmer organizations is very
important: mills must be located near producers to receive the
sugarcane before it starts to spoil. The mills are major industrial
facilities that require large centrifuges and other heavy
machinery to change sugarcane into sugar.
In most countries, small-scale producers generally don’t have
the capacity to undertake such an expensive and capitalintensive process on their own. But, thanks to their participation
in Fair Trade, some farmer cooperatives have taken a step up
the supply chain and are beginning to mill, refine and directly
export their product to international buyers.
Sugar
Producers
Processor/
Exporter
Importer/
Brandholder
Fair Trade
Certified
Cooperative
Brands
7
Supply
By the Numbers
Since 2005, Paraguay has been the largest origin for the U.S. Fair Trade Certified™ sugar market. This trend is not surprising given
the global supply and demand dynamics for organic sugar: 50 percent of the sugar produced in Paraguay is organic and it ships
45 percent of its national sugar production to the U.S. market.
Millions of Pounds
U.S. Fair Trade Certified Sugar Imports
20
15
The Philippines
Costa Rica
10
Malawi
Paraguay
5
0
2005
2006
2007
2008
2009
2010
8
Supply
By the Numbers
U.S. companies began sourcing Fair Trade Certified™ sugar
in 2005, purchasing over 270,000 pounds from Paraguay,
Malawi, Costa Rica and the Philippines in that first year. Since
then, the market for Fair Trade sugar has grown tremendously.
In 2010, Fair Trade USA certified over 18 million pounds of
sugar, reaching a significant milestone of over 50 million
pounds imported into the United States since 2005. Coupled
with a 60 percent increase from 2009, Fair Trade sugar
continues to make a presence on supermarket shelves and in
the recipes of an expanding list of consumer packaged goods.
Organic sugar represents a significant portion of Fair Trade
Certified sugar entering the U.S. market. In 2010, nearly 89
percent of all Fair Trade Certified sugar imported was organic.
Consumers and companies support a healthier and safer
world through their choices to purchase sugar produced
through organic farming practices.
Millions of Pounds
U.S. Fair Trade Certified Sugar Imports
60
50M+
POUNDS OF SUGAR
PURCHASED SINCE 2005
40
20
FAIR TRADE CONVENTIONAL
FAIR TRADE ORGANIC
0
2005
2006
2007
2008
2009
2010
9
Supply
Spotlight on Paraguay
Growth in a Niche Market
Fair Trade and organic sugar production in Paraguay is a
success story that continues to outshine all expectations.
American and European natural food brands have formed
a partnership with innovative sugar traders, sugar mills, and
small-scale sugarcane growers in Paraguay. Together they
have discovered the niche market for organic and Fair Trade
sugar and are making it their own.
Imports of Fair Trade organic sugar from Paraguay to the
United States began in 2005. Since then, the imported volumes have increased at an amazing rate, from 2.6 million
pounds in 2005 to 16.1 million pounds in 2010.
This astounding import growth has been made possible by
the partnership and tireless effort of U.S. based companies
and Paraguayan sugar producers, who are meeting the
demand for Fair Trade organic sugar. In addition, producers
in Paraguay have been working hard to fulfill all certification
criteria and continually work towards improving the quality and productivity of their sugarcane farms. The Fair Trade
system supports these producers with regular visits to the nine
Fair Trade sugarcane cooperatives in Paraguay. During these
visits, Fair Trade representatives provide support around Fair
Trade certification criteria, help facilitate General Assembly
meetings, and organize market linkage efforts.
On The Ground
The story of Fair Trade organic sugar from Paraguay is a
story about market growth, improved livelihoods, and true
partnerships within the supply chain. The many small-scale
cane growers in Paraguay generally own two to seven acres
of land and often live in remote locations with no access to
information about global sugar commodity market trends that
affect their daily lives. Traditionally, individual farmers sell
their sugarcane to the processing mill closest to them. Because
individual small holders have limited access to transport
and sugarcane must be delivered to the mills within 24-48
hours after the harvest, farmers are not in a position to negotiate prices. Through the Fair Trade cooperatives, farmers are
better able to organize the transport of their cane to the mill,
sign collective contracts, and have a more professional and
effective form of representation in negotiation with local mills.
With the added benefit of Fair Trade community development
premiums, cooperatives have been able to invest in tractors
for transport, organic certification and quality improvements.
With the support of Fair Trade, Paraguayan sugar cooperatives have developed into professional agribusinesses.
Fair Trade Impact
Fair Trade USA has awarded grants to three sugar cooperatives in Paraguay with the goal of encouraging membership
growth at each cooperative to generate additional supply for
the U.S. market. This growth is expected to generate 390 new
members. In addition, in early 2011, two new sugarcane cooperatives took the first steps toward Fair Trade certification and
are expected to achieve Fair Trade certification of their cane
in time for the 2011 sugar export season.
As a result of Fair Trade and the efforts of all partners along
the supply chain, volumes of available Fair Trade organic
sugar from Paraguay are expected to grow in 2011.
10
Impact
By the Numbers
Since 2005, sales of Fair Trade Certified™ sugar products to the United States have generated over $1.75 million in community
development premiums for farmer cooperatives. With continued growth year after year, this category continues to reliably deliver
tremendous impact to farming families and communities.
Community Development Premiums
$2.0
$1.75 M
$1.5
Millions
paid to farmers
since 2005
$1.0
$0.5
$0
2005
2006
2007
2008
2009
2010
The Fair Trade Premium: How does it work?
Premiums for community development are a key element of
the Fair Trade standards. This innovative approach to development allows farmers access to capital to fund self-determined development projects in order to improve their lives.
to the selling price farmers receive. The premium funds go into
a bank account established specifically as a development
fund for the cooperative.
Small-scale farmers organize themselves into cooperatives
or associations to work together to sell their product. Once a
cooperative is certified as Fair Trade, they can sell Fair Trade
sugar to the international market and receive a Fair Trade
premium for every metric ton of sugar sold.
Cooperative farmers vote on development project ideas.
Sometimes farmers vote to buy equipment or assets to help
them increase their productivity or product quality. Other
cooperatives vote to use premium funds to build infrastructure
like roads or housing. No matter what the project, all premium
uses are decided democratically and communally.
Fair Trade buyers pay sugar cooperatives a Fair Trade premium of $60-80 per ton of sugar purchased—this is in addition
See the Fair Trade Producer Spotlights for examples of Fair
Trade premium uses.
11
Impact
Price and Premium Support Communities
4
1
5
2
3
Fair Trade Premiums Contribute To:
1 Coopecañera
Costa Rica
Quality Improvement Loans,
Water Filtration System
2 ASOCASE
Paraguay
Health Care Program,
Farm Equipment and Fertilizer
3 MaNDUVIRá
Paraguay
School Supplies,
Cash Loans During Non-Harvest
Season, Construction Of Processing,
Collection Facilities
4 ALTER TRADE
Philippines
Income Diversification, Credit Programs,
Infrastructure or Direct Export,
Potable Water System (Planned)
5 Kasinthula
Malawi
Food Security Program,
Food During Drought Season,
Revolving Fund,
New School Construction
12
Producer Spotlight
Cañeros Orgánicos Asociados
(CORA), Paraguay
FLO ID
19800
Year Founded
2007
Year Certified
2008
Number of Members
111
Organic Production
100%
Cañeros Orgánicos Asociados (CORA) is the newest Fair
farmer organization is Fair Trade, it will be able to provide
Trade Paraguayan organic sugar organization selling sugar
farmers with lower-cost tractor and transportation services
to the U.S. market. For sugar farmers in Tebicuary Mi, years of
so they can invest in their land, which needs care after
decreasing yields and higher production costs have trapped
nearly 100 years of extensive use. Fair Trade premiums have
them in poverty. Increasing costs and interest rates have
already enabled CORA to invest in a brand-new tractor and
created an unsustainable situation and many sugar farmers
equipment for members to help expand their plantations.
have left the business and migrated to other cities in search
CORA estimates that they will be able to double their cane
of new ways to make a living. Through Fair Trade, this new
output by the end of 2011, thanks to their new 132-horsepower
alliance of family farmers hopes to overcome their history of
tractor. They also purchased a small eight-ton truck for
poverty and hardship.
transporting organic fertilizers and seeds.
Small-holder farmer Arnaldo Gimenez says, “Fair Trade is
CORA looks forward to further programs that will contribute to
our last chance to develop if we are to continue as organic
the following aims: improving the lives of small-scale
sugarcane producers.”
sugarcane producers and their families, organizing the
In their first year, members of CORA identified the need to
increase production as a way to build up organizational
capacity and thereby improve their livelihoods. Now that the
production and commercialization of crops and improving the
overall condition and fertility of the land.
“Thanks to Fair Trade we are
showing our community that
organizations can work to
create a better future for their
members.”
– Hector Silva, CORA member
13
Producer Spotlight
Cañera del Sur, Paraguay
FLO ID
1486
Year Founded
1961
Year Certified
1999
Number of Members
220
Organic Production
100%
The Asociación Agrícola Cañera del Sur was formed in
1961 by small-scale sugarcane farmers to collectively
negotiate better prices with the local sugar mills. Cañera
del Sur is located near the small city of Iturbe, a five hour
bus ride away from Asunción, Paraguay’s capital.
In 1999, Cañera del Sur became Fair Trade. Now farmers
can negotiate for better prices and receive community
development premiums for investment in community
projects. In addition to sugarcane, the farmers of Cañera
del Sur also tend to livestock and fish farms, as well as
growing self-consumption crops such as corn, yucca,
beans, peanuts, melons, citrus, cotton and citrus.
Cañera del Sur’s vision is to produce sugar product for sale
on the local market, control the full production cycle and
gain value by processing their own cane.
The Fair Trade premium has enabled Cañera del Sur to
establish various social and productive programs:
Productive Investment
The organization orients producers to the market by
providing training and financing, as well as logistical,
technical and economic support.
Health Care
Two days a week the organization offers free dental
care for cooperative members and subsidized care for
community members. The organization also supports local
schools with free health testing for the whole community.
Environment
Cañera del Sur used premiums to pay for an organic audit
and is now certified organic, which ensures a better price
for their sugarcane. The organization practices erosion
control and provides educational trainings that focus on
organic and environmental practices. In 2005, the
organization invested in a tree nursery that began
growing fruit trees and now has expanded to growing
native trees that are used for reforestation. Cañera del Sur
gives these trees to its cooperative members to prevent
water and wind erosion.
Food Security
An on-site grocery store has been created with produce
sourced from some of the cooperative’s members. Local
community members can purchase food at affordable
prices and finance food by subtracting the cost from their
sugarcane payments.
Communication
Cañera del Sur has invested in a radio station to facilitate
communication, news and education amongst its
members.
“I became a member of Cañera del Sur in
2007. For me, the main impact of Fair Trade
is that we can obtain financing to cover
harvest costs. Harvest time is very critical
in terms of cash flow and no other bank,
cooperative or organization provides loans
for small-scale producers in the region.”
– Gregorio Bareira, Cañera del Sur member
14
Producer Spotlight
Asociación Agrícola Cañera
Orgánicos de Iturbe, Paraguay
FLO ID
3592
Year Founded
2004
Year Certified
2005
Number of Members
430
Organic Production
100%
The Asociación Agricola Cañera Orgánicos de Iturbe is a
small, Fair Trade organic sugarcane cooperative in
Paraguay. Iturbe is in the Guairá region of Paraguay,
which has traditionally been a sugarcane growing region.
The cane farmers rely heavily on sugarcane production
as their main source of income. Locally, there are very few
job prospects apart from growing sugarcane. Due to poor
local infrastructure, inhabitants of Iturbe have to travel
about 30 kilometers on dirt roads to get to the nearest city
with health care, banking, and educational services.
Currently, the cooperative has three tractors, which it
lends to its members for soil preparation. One truck is also
utilized to help its members with the commercialization of
small crops of beans and vegetables. Aside from
sugarcane, farmers grow yucca, corn, watermelon and
citrus crops for sale at the local market as well as for
self-consumption. Molasses and rum, byproducts of
sugarcane, are also produced and sold.
The Fair Trade premium has enabled Cañera Orgánicos
de Iturbe to establish various social and productive
programs:
Environment
Orgánicos de Iturbe organizes trainings for its members on
organic farming and crop diversification. In addition, the
cooperative also runs a reforestry program to grow and
plant native trees and fruit trees to protect soil and
improve productivity.
Truck Repair and Fuel
Premiums have been invested to repair tractors and trucks
and to pay for their fuel. Investing in the upkeep of their
equipment allows farmers to efficiently organize the
delivery of the cane to the mill.
Office Supplies
Office supplies have been bought to support
administration and accounting.
Organic Certification
Orgánicos de Iturbe invested in organic certification for
their sugarcane.
“Until now, the mill and exporter of our sugar held the organic
certificate. The ownership of our own organic certificate will
enable us to do business directly with importers abroad and this
is thanks to Fair Trade.”
– Hugo Hernán Rodriguez,
President, Orgánicos de Iturbe
15
Producer Spotlight
Manduvirá, Paraguay
FLO ID
1480
Year Founded
1975
Year Certified
1999
Number of Members
1,358
Number of Women
443
Organic Production
100%
Founded in 1975, the Cooperativa Producción
Agroindustrial Manduvirá LTD is located in the village
of Arroyos y Esteros (Streams and Swamps) in southwest
Paraguay. The cooperative aims to support its members
in the marketing of their sugarcane as well as providing
services such as financial assistance, education, technical
support and agricultural training. At Manduvirá, 443
of the organization’s 1,358 members are women and
many of them hold prominent leadership positions in the
organization.
Since becoming Fair Trade, Manduvirá has had enormous
success, the greatest being that they have become
a sugar exporter. Previously, Manduvirá’s members
depended on a third-party sugar mill to buy their
cane, process it into sugar and negotiate its sale on the
international market. Through Fair Trade networking and
financial premiums, Manduvirá members now process
their own sugar and the cooperative directly manages the
export and sale of its sugar.
The Fair Trade premium has enabled Manduvirá to
establish various social and productive programs:
Education
All cooperative members’ children under the age of 15
are required to attend school. In Paraguay, education is
free for children up to the age of 16 years old, but without
the necessary materials children cannot participate
actively in lessons. The school year begins in February,
which is a time of year when producers have no income
from sugarcane and it can be difficult to find the means
for even the most basic classroom materials. In order to
support the education of members’ children, Manduvirá
pays for books, uniforms, supplies and backpacks.
Health
The cooperative built a health center, complete with a
dental clinic and laboratory, which is available to the
whole community, offering subsidized rates for cooperative
members. The laboratory is the only one available in the
area. Test results are now available within a day, rather
than sending to the capital city with a three-day wait. This
means patients are more likely to be able to afford the time
and money for diabetes, cholesterol or HIV testing. In cases
where medication is urgent, the laboratory saves lives.
Three professionals provide dental and medical
consultation to cooperative members. The services are
offered to all villagers, but cooperative members pay only
20 percent of their consultation fees; the rest is covered by
Manduvirá.
When the center was built, there were no state health
services in the town. The journey to the nearest services
in the capital was three hours on a bus, down a road that
was impassable after heavy rains. The health center also
hosts an optician once a month, a service that is otherwise
unavailable.
Productive Investment
Ninety-nine percent of Manduvirá members are smallscale producers with an average of 7 acres of land. For
these producers, the purchase of their own farm machinery
would be uneconomical. Fair Trade premium funds were
used to purchase a tractor for shared use and a platform
scale. Fair Trade premium funds were also used to
subsidize the construction of 32 sugar collection centers,
a transportation system for transporting sugarcane to the
mills, a demonstration project for organic soil improvement,
and maintenance of the tractor.
“What would I say to consumers?
Please buy! We are working hard
and making sure there’s no chemical
contamination. Our plan to have
a factory in the future is really
important. It will be good for a lot of
people.”
- Maria Pabla Cacerez,
Manduvirá farmer
16
Producer Spotlight
Coopecañera, Costa Rica
FLO ID
1488
Year Founded
1972
Year Certified
2000
Number of Members
360
Number of Women
45
In the San Ramón region of Costa Rica, small-scale sugar
producers formed Cooperativa Cañera de San Ramón R.L.
(Coopecañera) in 1972. During the cooperative’s early years,
San Ramon was a particularly poor region and Coopecañera
faced many obstacles. Sugarcane farmers found it difficult to
turn a profit and earn adequate incomes. Over time, however,
members have managed to reduce costs and increase
production, therefore improving profits.
The cooperative still faces some difficult issues, including the
encroachment of urban communities on farmland in the
region. San Ramón is located 60 kilometers from the capital
city of San José. Farmers worry that as the city grows,
arable land will become scarcer and pollution will take a toll
on sugar production.
Thanks to Fair Trade, Coopecañera farmers have attained
higher incomes and can invest in production techniques
and environmental programs that protect their future.
The cooperative sought Fair Trade certification in 2000 to
strengthen their organizational capacity and earn better
prices for the farmers. Coopecañera now owns its own sugar
mill and refinery, allowing members to produce both raw
and refined sugars. They have also reduced chemical use in
switching from an all-bleached sugar operation to producing
natural less-refined sugars.
The Fair Trade premium has enabled workers at
Coopecañera to invest in various social and productive
programs:
Reforestation and Water Filtration
Given the issues surrounding the encroaching urban settlement
of San José, environmental stewardship is becoming more and
more of a priority. Coopecañera farmers are investing now
to ensure that their crops and land are protected from urban
sprawl. The cooperative invests 50 percent of its additional Fair
Trade income in reforestation and water filtration programs.
Technical Assistance
Coopecañera provides a credit system whereby farmers may
apply for loans to improve the quality of their sugarcane. The
cooperative also provides special assistance to its members
during the harvesting season. This additional technical
assistance helps farmers increase and maintain their level of
production. The cooperative invests over 30 percent of its Fair
Trade income in technical assistance programs for smallscale farmers.
Financial Program
Sugarcane producers receive regular cash bonuses for
their production. Because sugar prices tend to be low,
sugarcane farmers often must rely on other forms of income
to supplement their sugar revenues. Fair Trade has given
Coopecañera farmers the opportunity to invest all of their
time in sugar production because farmers receive cash
bonuses that supplement the local market prices for sugar.
The cooperative allocates 20 percent of its additional income
received through Fair Trade sales to this bonus program.
17
Producer Spotlight
Kasinthula, Malawi
The Fair Trade premium has enabled workers at Kasinthula
Cane Growers Assoication to establish various social and
productive programs:
FLO ID
2191
Education
Year Founded
1988
Year Certified
2003
Number of Members
282
Number of Women
90
The Kasinthula cooperative has invested a significant portion
of its Fair Trade premium in education. They are working to
provide building materials for the construction of new schools.
They hope to build a primary school for children in remote
villages and a secondary school near the cooperative’s
administrative office. Premium funds are also being used to
pay school fees for farmers and their children.
The Kasinthula Cane Growers Association (KCG) is located
in the Shire Valley, an inhospitable region in the south of
Malawi, one of the poorest countries in Southern Africa. The
lower Shire Valley has a harsh, hot climate and a long dry
season. Long droughts occasionally result in famine and the
twice-yearly rains frequently bring floods. Commercial sugar
production is the major source of employment and cash flow.
Like most districts of Malawi, there is dire poverty and the
majority of residents live in very basic pole and mud huts.
They have very few domestic animals compared to other
communities in Africa. Sugarcane production can contribute
immensely to the development of the Shire Valley if the
small-holders are organized and supported by affordable
credit. With this in mind, Kasinthula Cane Growers Association
cooperative was sponsored by the government in 1998.
Today the cooperative is managed by its members, which
consist of local small-scale farmers. The existence of the
cooperative and its sustainability projects brings true hope for
these communities who still live well below the poverty line.
Fair Trade has the potential to stimulate further economic
development by providing resources, through Fair Trade
premiums, for direct assistance in areas such as water
treatment, education and health.
Presently, sugar is the third largest foreign currency earner in
Malawi after tobacco and tea and Kasinthula Cane Growers
Association is the only small-holder sugarcane producing
company in Malawi.
Productive Investment
Kasinthula is investing in replanting and improving the
productivity of their cane crops in several cycles. With this
investment, farmers will be able to earn more money in the
future from the same plot of land.
Health
The cooperative’s first project was to drill wells to provide
safe drinking water to two villages. Since working with Fair
Trade, they have been able to expand that project and have
now drilled 10 wells for regional villages. Before the wells, the
unsanitary water supply frequently caused diseases such as
bilharzia, cholera and dysentery.
In addition, Kasinthula invested in the expansion of the local
health clinic and supplied the clinic with 20,000 tablets of
Praziquantel, a medication required for the treatment of
bilharzia. Though this is a common disease in the area, the
government clinic had operated without the medicine for over
three years.
Finally, the cooperative has invested in four bicycle
ambulances that allow the clinic to reach emergencies in
remote villages that are not accessible by motor vehicle.
Additional Investments
Kasinthula has also financed the installation of electricity
in the village of Chinangwa, as well as five villages from
Salumeji to Ntondeza, which previously had no access to
electricity.
“Fair Trade has been so helpful to us small-holder farmers. Using Fair Trade
premiums, we have completed projects for the benefit of the communities to which
we belong, thereby spreading the benefits of Fair Trade to a larger group”.
– Patrick Khambadza, Kasinthula, Malawi
18
Producer Spotlight
Alter Trade, Philippines
FLO ID
1482
Year Founded
1997
Year Certified
2004
Number of Members
707
Number of Women
318
The Alter Trade Cooperative is located on the island of
Negros in the Philippines. On the island of Negros alone,
the total agricultural area planted with sugarcane reaches
576,637 acres (equivalent to 85 percent of total cultivated
area) for a total of 330,000 sugar worker households. Sugar
production represents 70 percent of the total revenue of the
island. Traditionally, very few farmers own the land that they
work. Rather, a handful of rich landowners have owned the
majority of the land and have maintained a monopoly over
production and the trade of sugar.
Formally known as the Negros Organic and Fair Trade
Association (NOFTA), Alter Trade was created in 1997 to fight
poverty by helping sugarcane workers gain access to land,
resources and markets. The Alter Trade initiative is aimed
at helping former sugar plantation workers to obtain land
through the Philippines Comprehensive Agrarian Reform
Program. The initiative also supports new small-farm owners
to form a viable, competitive cooperative enterprise capable
of raising incomes and living standards for its members.
The producer members of the 27 organizations that form the
cooperative are all former sugarcane plantation workers
who organized and lobbied to obtain land through agrarian
reform. When the farmers finally received their small plots of
land, they decided to cultivate the land as a large, communal
landholding in order to reach greater productivity. The
cooperative helps them obtain better prices and provides
technical assistance and credit. Many members have
implemented organic production methods that have increased
the fertility of the soil and the final price to the farmers. The
support of Fair Trade has proven essential for these previously
unskilled, mono-crop workers who did not have access to
capital or knowledge of how to access the market.
The Fair Trade premium has enabled workers at Alter Trade
to invest in various social and productive programs:
Strengthening Food Systems
Sugar producers on Negros face what they call “an annual
hunger period” of 3-4 months between harvests every year.
With this in mind, the farmers have voted to invest premiums
in income diversification and to offer low-interest loans for
projects to strengthen food systems. For example, producers
have invested in raising cows, chickens and pigs, as well as
growing rice and corn.
Infrastructure for Direct Export
Alter Trade has created the infrastructure for the organization
to process, package and market sugar for direct export. This
development allows the sugarcane producers to keep a
higher percentage of the value-added price of their product.
Potable Water System
With premiums received in 2009, Alter Trade plans to install
a potable water system project in the Amano community in
order to decrease the incidence of water born diseases.
“I sell my cane through the cooperative,
earning $400 to $600 a year. Thanks to
the increase in my revenues, I was able
to send my two kids to the University of
Bacolod. They are studying agronomy
and accounting. I deeply hope that they
will come back to take over the farm.
– Robert, Alter Trade member
19
Appendix
Fair Trade Principles
Fair Trade standards provide the foundation for our sustainable development model. Both buyers and sellers of Fair Trade products
agree to uphold fair and rigorous social, economic and environmental standards. The standards level the playing field for the
Global South and empower businesses and consumers in the Global North to make every purchase matter. When you buy Fair
Trade Certified™ products you give farmers fair prices for quality products that improve lives and protect the environment. Each
year, Fair Trade business partners improve the lives of approximately 1.2 million farming families in 70 developing countries.
Here’s how…
Fair Trade Principles
• Guaranteed Prices and
Community Development Funds
• Access to Credit
• Environmental Sustainability
• Child Labor, Forced Labor and
Work-Place Discrimination are Prohibited
• Democracy and Transparency
• Community Development
Guaranteed Prices and Community
Development Funds
Fair Trade’s unique commitment to specific, pre-established
prices and community development premiums distinguishes
the Fair Trade Certified mark from other sustainability labels.
Farmer groups are paid a price that covers the cost of
sustainable production, a premium for community selected
development projects and an additional price premium for
certified organic crops. This empowers farmers with equal
negotiating power, while still encouraging them to improve
quality in order to negotiate even better prices.
Environmental Sustainability
Fair Trade standards require environmentally sustainable
farming methods that protect farmers’ health and preserve
ecosystems. These standards strictly prohibit the use of GMOs
and the most toxic agrochemicals, promote active
conservation of soil and water resources and protect
surrounding forests. More than half (62 percent) of all Fair
Trade imports in 2010 were also certified organic.
Child Labor, Forced Labor and Work-Place
Discrimination are Prohibited
Buyers are required to offer commercial credit to farmers upon
request, either directly or in collaboration with financial
intermediaries. Access to timely credit on favorable terms
secures supply chains by allowing farmer organizations to
increase export capacity and invest in product quality.
Fair Trade farmers and workers can count on more than just
better prices. Fair Trade standards require freedom of
association and safe working conditions. Child labor, forced
labor and discrimination are strictly prohibited. When
standards are breached, we take immediate action to protect
children and forced laborers to ensure fair treatment for all on
the farms and factories that carry the Fair Trade mark.
Democracy and Transparency
Community Development
Empowerment is an essential component of building
sustainable communities, and therefore of Fair Trade.
Small-holder farmers form cooperatives that allow them to
process and export their harvests competitively. Both farmers
and farm workers form councils to transparently and
democratically manage community development funds.
These organizations are audited annually for transparency,
democratic processes and sound financial management.
U.S. importers and manufacturers pay premiums for
community development that allow farmers and farm
workers to invest in life-changing projects. These
projects—from clean drinking water, school scholarships and
health care services to housing, reforestation and organic certification—benefit entire towns and regions.
Access to Credit
Find more, visit www.fairtrade.net/standards/
20
Appendix
Frequently Asked Questions
What is Fair Trade?
Fair Trade is a global movement to alleviate poverty in
farming communities around the world in ways that are
socially and environmentally sustainable.
What does it mean to be Fair Trade Certified?
Fair Trade certification assures consumers and businesses
that the quality products they purchase improve lives and
protect the environment. The Fair Trade Certified™ label
means that a product meets the requirements of Fair Trade’s
rigorous international standards for social, economic and
environmental sustainability.
How does Fair Trade certification ensure that
the products I buy are fair?
Fair Trade producers undergo audits to demonstrate that they
are implementing Fair Trade standards to ensure that the
products consumers buy are traded in the most fair and just
manner. Through adoption of Fair Trade standards, farmers
strengthen their communities and take their products directly
to global markets. In turn, these efforts support dramatic improvements in income and quality of life.
21
Appendix
Environmental Standards
In order to improve producer’s living and working conditions,
their environment must also be clean and healthy. Strong
environmental standards are therefore integral to Fair Trade.
Only products that meet strict international environmental
standards earn the right to display the Fair Trade Certified™
label. These standards support our mission to foster increased
social and economic stability, leading to stronger communities and better stewardship of the planet.
“Thanks to Fair Trade I have received
capacity building trainings on organic
production and now I am committed
to maintaining a method of production
that will protect and sustain the
environment.”
– Ramón Rojas Runco, Cooperativa Agraria Industrial
Naranjillo LTD, Peru
Environmental Stewardship
An estimated 30% of producer organiztions
invest a portion of their Fair Trade premiums for
community development in environmental
initiatives.
In order to obtain Fair Trade certification, producer organizations are required to adhere to core Fair Trade environmental
standards. Additionally, they must assess the environmental
impacts of members’ operations, develop plans designed to
mitigate those impacts and monitor the implementation of
those plans. Through this environmental impact assessment,
organizations are encouraged to progress toward higher standards and to increase their sustainable production.
Standard
core requirement
Soil and Water
• Enhance soil by applying sustainable irrigation practices, such as crop rotation
• Source water sustainably and reduce water use over time
Biodiversity and
Carbon Emission
• Report current benefits to ecosystems and current methods of carbon emission reductions
• Report new methods to improve biodiversity or limit carbon output
• May choose to focus on specific targets by incorporating goals into a development plan
GMO’s
• Prohibit use of GMO’s
Agrochemicals
• No selling, using or distributing of any prohibited materials
• Handle and store all agrochemicals safely
• Avoid aerial spraying over rivers and other water
Pests and Waste
•
•
•
•
Control pests in a safe and sustainable way
Farmers educated on the use of approved pesticides
Alternatives to chemical pest control must be explored
Develop disposal plans for hazardous waste in an environmentally sustainable manner
22
Fair Trade and Organic
While Fair Trade Certification does not
require organic certification, it does
support organic farming with training for
producers and a higher price incentive for
organic products. Many producers invest
their Fair Trade premium funds in organic
certification, which has led to outstanding
results: 62 percent of all Fair Trade imports
into the United States are also organic.
Approximately 50% of all Fair
Trade producer organizations
worldwide hold organic
certificates
High Standards = High Quality
By adhering to strict Fair Trade standards, farmers are not only able to make
great strides in environmental sustainability, but also in the quality of their
products. With the Fair Trade premium for community investment, farmers
can spend more time and money on things like environmental education,
training, quality testing and equipment efficiency. Through the development of
sustainable growing and harvesting practices, quality crops are produced at
no cost to our fragile ecosystems, and often receive a much higher price in both
mainstream and specialty markets.
In truth, Fair Trade and organic
certifications are not in competition, they
are complementary. While Fair Trade
certification does go a step further to
require adherence to additional social
and economic standards, holding dual
certification shows a profound commitment
to environmental responsibility, and reveals
visible progress towards achievement
of all Fair Trade standards. Ultimately,
reaching for these standards encourages
the production of goods that benefit you,
farming communities and the earth.
23
Appendix
Services and Funding
U.S. Fair Trade 2010*
• Beneficiaries: 1.2 million farmers
and workers
• Community Development Premiums:
$14 million in 2010, $56 million since 1998
• Producer Organizations: 330 U.S.,
878 worldwide
• U.S. Sales: $1.2 Billion
• Additional Income: $220 million since 1998
• Products: 9,500+ in over 60,000 retail
locations
*Inclusive of all product catergories
Fair Trade USA is a nonprofit, mission-driven organization
that tackles social and environmental sustainability with an
innovative, entrepreneurial approach. We are the leading
independent, third-party certifier of Fair Trade products in
the United States, and the only U.S. member of the global
Fairtrade International network.
Only products that meet strict international Fair Trade
standards earn the right to display the Fair Trade Certified™
label. These standards support our mission to foster increased
social and economic stability, leading to stronger communities
and better stewardship of the planet. Since 1998, we have
helped our industry partners in the United States to generate
more than $220 million in additional income for farming
communities.
As a Fair Trade industry partner, you play an essential role in
our mission by offering Fair Trade Certified products to your
customers and creating market opportunities for producer
organizations. The U.S. market for Fair Trade Certified products
is now the world’s largest, and this growth makes it possible
for 1.2 million people in some of the world’s poorest countries
to make sustainable, tangible improvements to their quality
of life.
Services
Fair Trade USA offers a comprehensive range of services
that support our industry partners efforts to source Fair Trade
Certified goods, receive credible verification of responsible
sourcing practices, and help hard-working men and women
throughout the developing world retain more value from their
crops and products.
Standards and Certification
Globally, Fair Trade sets, audits and enforces strict labor and
environmental standards. In the United States, Fair Trade
USA’s comprehensive internal audit program helps ensure
the integrity of every product bearing the Fair Trade Certified
label and provides consumers with an easily identifiable
symbol of social and environmental responsibility.
The international certification agency FLO-CERT has
developed a global network of highly-trained field auditors
who monitor cooperatives and companies to verify their
compliance with strict Fair Trade social and environmental
standards, as well as the investment of community
development premiums. Offering certification services in
more than 70 countries, FLO-CERT became the only social
certification to gain accreditation in 2008 by the International
Standards Organization (ISO), based on the strength of its
audit and certification processes.
Measuring and Reporting Impact
Fair Trade USA works with farmers and producer
organizations around the world to capture and summarize
the impact that results from participation in Fair Trade
through training and development efforts, additional income
generation and premiums for community development.
Throughout the year, Fair Trade shares this information
directly with partners and the public through detailed impact
reports and impact stories that help connect consumers with
the people behind their favorite products.
24
Fair Trade delivers a demonstrable difference on the ground.
Since Fair Trade USA’s founding, farmers and workers around
the world have earned more than $220 million in additional
income. These funds include more than $56 million in Fair
Trade premiums, funds that are dedicated to the most
pressing development needs in farming communities and
democratically administered by the project beneficiaries
themselves. Projects financed with Fair Trade premiums
include housing programs, investment in sustainable farming
techniques and biodiversity, schools and scholarships, health
systems, women’s empowerment programs and more.
Supply Chain Development
One key ingredient necessary to grow Fair Trade’s impact is
securing the supply of key ingredients for U.S. buyers.
In addition to identifying new and additional sources of Fair
Trade ingredients for U.S. companies, Fair Trade helps U.S.
companies to identify short- and long-term needs, connect
them with suppliers and importers of Fair Trade raw
materials and helps their existing suppliers convert to Fair
Trade. We also work with producer organizations to improve
their quality and business acumen and connect them directly
with U.S. buyers.
Consumer Awareness and Demand
Fair Trade USA also works to build consumer demand by
creating awareness and understanding of what Fair Trade
is and by getting more products in more categories on more
shelves in more locations. We also offer consumer marketing
research to help our partners tell the Fair Trade story; point
of sale materials that illustrate the real world differences Fair
Trade makes; support for farmers and industry partners at
key trade shows; opportunities to leverage your marketing
and PR budgets with national awareness-building and sales
campaigns like World Fair Trade Day and national Fair Trade
awareness month in October.
Building the Fair Trade Movement
Fair Trade USA also works with grassroots organizers,
including dedicated individuals, communities of faith and
national advocacy organizations such as United Students for
Fair Trade, Catholic Relief Services, Lutheran World Relief and
others to mobilize support for companies offering Fair Trade
Certified products. In addition, we support the efforts of Fair
Trade Towns USA and Fair Trade Universities, where local
community leaders and governments, as well as students and
administrations, have declared their support for Fair Trade
products and practices to boost consumer demand and build
awareness. These activities are funded through our
philanthropic endeavors and serve as a significant value-add
for our partners.
Resource Development
By securing philanthropic funding, we create a multiplier
effect to make your investments in Fair Trade work harder and
go farther each year. In fact, for every dollar we receive from
partners, we raise an additional 43 cents from foundations,
individual donors and government sources. We also receive
significant sources of in-kind funding from foundations and
corporations for technology, legal counsel, public relations
and marketing support. For instance, in-kind SAS
contributions from Salesforce.com enable us to collect and
report vital certification data.
These funds also support our Research and Development
activities to expand the range of services we offer our clients
and the impact we can generate for producers. Philanthropic
donations have created stronger sources of coffee supply in
Brazil thanks to U.S. AID and Walmart; enabled Fair Trade
Towns USA thanks to Green Mountain Coffee and the Green
Mountain Coffee Roasters Foundation; and allowed Fair Trade
to expand into new categories like sugar and apparel thanks
to a number of venerable and gracious philanthropic
organizations.
Impact and Awareness
Growth in general public awareness for Fair Trade
significantly increases the amount of impact going back to
producers. Between 2005 and 2010, Fair Trade awareness
increased four-fold, from 9 percent to 34 percent. At the same
time, additional income earned by producers increased from
$3 million to $56 million, respectively. We have a long way to
go, but we want Fair Trade to become a household word.
How Our Funding Works
Service fees comprise the majority of Fair Trade USA’s income,
approximately 75 percent of our $9 million budget in 2010.
Similar to the Fair Trade model, we aim to be a sustainable
social enterprise, with diversified risk through multiple
funding sources, so we also seek charitable donations to
augment service fees, and we regularly review our programs
to ensure that all companies that want to take part in Fair
Trade can do so. In 2010, our $9 million budget - $7 million in
service fees and $2 million in philanthropic
contributions - returned $14 million in community
development premiums to farmers and workers.
For questions regarding this report, please contact [email protected]
Fair Trade USA
1500 Broadway, Suite 400
Oakland, CA 94612
tel: 510-663-5260
[email protected]
www.FairTradeUSA.org