Marisa da Silva
marisa@infanta.co.za
7 November 2013
 Trade NOT aid  According to
Johannesen and
Wilhite (2010):
◦ Fairtrade is a market-
based approach to social
and enviro...
Bananas
Cocoa
Cotton
Flowers
Honey
Cereals
Rice
Spices
Tea
Wine
 Holistic View
◦ Primary:
 Fairtrade conferences and
conducting semi-
structured interviews
◦ Secondary:
 Impact Studie...
Sugar
Reform
Begins
 Sugar = substantial
contributor to the GDP
of Swaziland
 Commencement in
2008 but only certified
in 2012
Why Fairtrade ...
The Two Main Economic Benefits of Fairtrade
1.Guarenteed Fairtrade Minimum Price
 Aims to ensure that producers can cover...
The Two Main Economic Benefits of Fairtrade
1.Guarenteed Fairtrade Minimum Price
The Two Main Economic Benefits of Fairtrade
1.Guarenteed Fairtrade Minimum Price
Agreement
Reforms
Volatile
Industries
Sel...
Premium was used
primarily to cover the
costs of certification
3
conditions
Social
Socio-
Economic
Environmental
2. Premiu...
According to Fairtrade Labelling Organisation (2013):
 A price that covers the cost of production
 A social premium
 Co...
 Fundamental Element
 Producers have an equal say
 Democratic decision-making
4. Empowerment
 More ethical decision-making
 Greater transparency between producers and
consumers
 Create awareness
1. Marketing and ...
 Selling into
conventional markets
 Consumer guarantee
◦ Quality
 Brand mark is crucial
2. Mainstreaming
Supply
Demand
55000
tonnes
10000
tonnes
2. Mainstreaming
initiative with a risk of
◦ Co-option
◦ Dilution
◦ “fair-washing”...
 1.231 million people
◦ 40% of Swazis live below the poverty line
 First year of certification, Swazilands sales of 1000...
 1.231 million people
◦ 40% of Swazis live below the poverty line
 First year of certification, Swazilands sales of 1000...
 1.231 million people
◦ 40% of Swazis live below the poverty line
 First year of certification, Swazilands sales of 1000...
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Is Fairtrade a potential alternative solution to poverty alleviation for small-scale producers and their communities based on the principle of trade not aid?

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Is Fairtrade a potential alternative solution to poverty alleviation for small-scale producers and their communities based on the principle of trade not aid?
This is a look into Fairtrade as a model and how it is currently working in the Swaziland sugar industry. This is currently a pilot test in Swaziland and the initiative was undertaken by the Swaziland Sugar Association (SSA).

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Is Fairtrade a potential alternative solution to poverty alleviation for small-scale producers and their communities based on the principle of trade not aid?

  1. 1. Marisa da Silva marisa@infanta.co.za 7 November 2013
  2. 2.  Trade NOT aid  According to Johannesen and Wilhite (2010): ◦ Fairtrade is a market- based approach to social and environmental development for producers through the use of standards and a price floor Producers Consumers
  3. 3. Bananas Cocoa Cotton Flowers Honey Cereals Rice Spices Tea Wine
  4. 4.  Holistic View ◦ Primary:  Fairtrade conferences and conducting semi- structured interviews ◦ Secondary:  Impact Studies, Case Studies and existing journals  Used Yin for case study guidelines  Case studies are designed to bring out the details ◦ Multiple data ◦ Practical implications  Single Case study
  5. 5. Sugar Reform Begins
  6. 6.  Sugar = substantial contributor to the GDP of Swaziland  Commencement in 2008 but only certified in 2012 Why Fairtrade is needed in the sugar sector?  Price volatility  Climate change  Competition
  7. 7. The Two Main Economic Benefits of Fairtrade 1.Guarenteed Fairtrade Minimum Price  Aims to ensure that producers can cover their average costs of sustainable production  Acts as a safety net
  8. 8. The Two Main Economic Benefits of Fairtrade 1.Guarenteed Fairtrade Minimum Price
  9. 9. The Two Main Economic Benefits of Fairtrade 1.Guarenteed Fairtrade Minimum Price Agreement Reforms Volatile Industries Sell Premium Products NO Minimum Price
  10. 10. Premium was used primarily to cover the costs of certification 3 conditions Social Socio- Economic Environmental 2. Premium Benefit
  11. 11. According to Fairtrade Labelling Organisation (2013):  A price that covers the cost of production  A social premium  Contracts that allow long-term production planning  Long-term trade relations  Environmental standards promoting best agricultural practice  A democratic decision-making  Forced labour and child labour are prohibited. 3. Standards and Certifications Producer organisations are paid a Fairtrade Premium of $60 per tonne
  12. 12.  Fundamental Element  Producers have an equal say  Democratic decision-making 4. Empowerment
  13. 13.  More ethical decision-making  Greater transparency between producers and consumers  Create awareness 1. Marketing and Strategy
  14. 14.  Selling into conventional markets  Consumer guarantee ◦ Quality  Brand mark is crucial 2. Mainstreaming
  15. 15. Supply Demand 55000 tonnes 10000 tonnes 2. Mainstreaming initiative with a risk of ◦ Co-option ◦ Dilution ◦ “fair-washing” 3. Higher input costs to adhere to certification requirements 4. Low level of education 1.
  16. 16.  1.231 million people ◦ 40% of Swazis live below the poverty line  First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.  With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being available to the Fairtrade producers.
  17. 17.  1.231 million people ◦ 40% of Swazis live below the poverty line  First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.  With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being available to the Fairtrade producers. Empowerment Better Working Conditions Premiums Relationships
  18. 18.  1.231 million people ◦ 40% of Swazis live below the poverty line  First year of certification, Swazilands sales of 10000 tonnes generated an annual premium of US $600 000.  With the balance of 45000 tonnes of Fairtrade sugar being sold with a premium of US $60 into Fairtrade markets, ◦ this would have the result of US $2.7 million/year being available to the Fairtrade producers. Empowerment Better Working Conditions Premiums Relationships What started with humble beginnings in assisting a few small farmers may well be one of the major answers in upliftment of communities and the alleviation of poverty

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