Network of Asia and Pacific Producers (NAPP)

3307, Lippo Centre, 89 Queensway, Hong Kong273, Thomson Road, #04-01, Novena Gardens, Singapore- 307644

About Fairtrade

The Fairtrade System

Fairtrade in Asia Pacific

© Fairtrade 2010

“Fairtrade is aboutsourcing in a responsible manner, being mindfulof the importance thatfarmers play in our global society. Put simply, it’s the right thing to do.”Jostein Solheim, CEO of Ben & Jerry’s

So, what is Fairtrade about?

Vision: A world in which all producers can enjoy secure, sustainable livelihoods, fulfill their potential and decide on their future.

Mission: Connect disadvantaged producers and consumers, promote fairer trading conditions and empower producers to combat poverty, strengthen their position and take more control over their lives.

Fairtrade Vision, Mission and Status Quo

1940s and 50s First fair trade initiatives in USA, then 60s /70s in Europe

1988 First ever Fairtrade label, Max Havelaar

Early 1990s Various national Fairtrade organizations set up across Europe

1997 Fairtrade International (FLO) founded

2000s New member countries including AUSNZ, Spain, South Africa

2002 Introduction of the international FAIRTRADE Mark

2004 Founding of FLOCERT

2010 Common brand and identity

2012 New constitution – more representation for producers

HistoryThe cause

Producer Trader Licensee Consumer

Centralized Services

FLOCERT

Marketing Services

Service Delivery

Certification

Production Chain

• Standards & Pricing• Financial

Management• Policy Advocacy• Branding and

Communications• Risk Management

• Licensing• Promotion, branding• Consumer

awareness• Sales targets• Consumer Impact

Producer Services

Underlying the product value / supply chain……there is a ‘derivative’ Fairtrade Service value chain

• Certification• Technical

Support• Supply Chain

linkage• Efficient

sourcing• Producer Impact

…

…but there’s more ‘under the hood’

Bottom-line: Don’t worry!! Fairtrade is with you!

Producer networks have equal voting rights in Fairtrade’s highest decision-making body: The General Assembly

Building producer empowermentThrough a bottom-up representation of producers

How Fairtrade works• Fairtrade Standards

• FAIRTRADE Certification Mark

• The Brand and Impact: Consumers to Producers

• Sales and successful markets

• Fairtrade and Fair Trade

Fairtrade Standards

Fairtrade Minimum Price: Price floor insures producers if market prices fall

Fairtrade Premium: Collective ownership. Above the purchase price to invest in community based projects, needs or businesses

Democratic decision-making at the producer level (including utilization of the premium)

Long-term, stable contracts with buyers

Adherence to core International Labour Organization conventions

Core and development criteria – producers mapping their own development

Climate Change Adaptation and restrictive chemical use

Fairtrade StandardsAnd the triple bottom-line development

Producers and traders have met the Fairtrade Standards

Supported by an independent, transparent and globally-consistent certification system auditor ISO 65 accredited FLOCERT

Standards and more details at www.fairtrade.net

The FAIRTRADE Certification Mark…The brand stands for something…

© Anette C. KayFairtrade Standards for around 300 products

Brand to ImpactConsumers to Producers

2004 2005 2006 2007 2008 2009 2010 2011 2012 20130

1

2

3

4

5

6

€0.8 €1.1

€1.6

€2.4 €2.9

€3.4

€4.3 €4.9 €4.8

€5.5

Estimated sales in billions of euros

~€6

Fairtrade SalesGross Merchandise Value (GMV)

2015

Value of Fairtrade Sales at Point of Sales (consumer)

Income at the ‘derivative’ Fairtrade Service value chain collected as % License Income comes to Fairtrade marketing Organizations, derivative channel:

A very small percentage of that is currently applied to ‘producer support’ and on-ground impact development. There is scope and potential for more investments

Fairtrade Sales Brands & business partners

More than 1,300 Fairtrade Towns in over 20 countries

Over 900 Fairtrade schools in the UK alone

Fair(er) Trade Campaigns and partners

Fair TradeAnd Fairtrade

Fairtrade

• Describes the certification and labelling system governed by Fairtrade International.

• Products carry the FAIRTRADE Mark

• Round “Brand Mark” for corporate identity use

Fair Trade

• Refers to the Fair Trade movement as a whole and organizations that abide by the high principles of Fair Trade.

• Includes labelled and unlabelled goods and the work of Alternative Trade Organizations, Fair Trade federations and other networks

• Fair Trade is not necessarily Fairtrade but Fairtrade is Fair Trade

But Fairtrade is not perfect…And we recognise that…

Conceptually, social and economic development through responsible business is undeniably, a great idea!!

Challenges: Idea to implementation

How to use Standards & Certification as a “Tool” for development?

Circular vs linear process of standards – Fairtrade is different

Combination of proactive and response driven. Knowing what works what doesn’t…

Managing the balance between business acumen and activism

Not a niche/ upstairs market but mainstreaming is a roadmap. vs mission drift

Multi-stakeholder democracy – Speed, accuracy and bringing everyone along.

In Asia-Pacific, we’re open to collaborations on Fair Trade, thematic interventions, localized projects and creating deeper impact

…is a constantly learning and evolving system…

…prescriptive to being practical...

….creating a systemic ‘mind-shift’…

….leading to a gradual ‘paradigm-shift’…

Focus and priorities over the next five years:• The implementation will demonstrate our

contribution to the Sustainable Development Goals and re-affirm our position as a leader and innovator in ethical trade

• Respond to the need to secure living wages for workers and living income for farmers through changes in pricing, purchasing practices and trading relationships will be the central theme of all our work

• Show how Fairtrade values, applied through tailored support for inclusive organisations, intervention in pricing to ensure fairness, and building access to Fairtrade markets delivers positive outcomes for farmers and workers

Building benefits for

smallholders & workers

Deepening impact through programmes &

services

Building Fairtrade Markets

Provide inputs on

Government Policies

Building a Strong, Settled Global System

2016-2020 StrategyBuilding on the strategic vision

Civil Society (on-ground

implementation),

Media, Promotion

Corporate and

Consumers

2016-2020 StrategyCreating a better ecosystem by partnership

Building benefits for

smallholders & workers

Deepening impact through programmes &

services

Building Fairtrade Markets

Provide inputs on

Government Policies

Building a Strong, Settled Global System

We will work with the government / quasi-government agencies to create impact for small and marginal farmers

Agenda

The Fairtrade System

Fairtrade in Asia Pacific

© Fairtrade 2010

Highlights Our Customers

Fairtrade in Asia Pacific Region

Legally set up in Feb 2014 in Hong Kong and March 2015 in Singapore

Operations:

18 countries | 187 producer organizations | Growth: flat (1%) y-o-y

163,700 farmers & 104,000 workers | Growth of 3% from last year

Nascent. Small in a larger global setup

Represent 16% of the total (Fairtrade farmers & workers)

11% of the total Fairtrade farmers

51% of the total FT workers

Gender balance

Among farmers in SPOs, 12% are women behind the global average: 23%

Among workers in plantations, 55% are women ahead of the global average: 48%

Landholding: 1.5 hectares (Average)

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Highlights Our Support

On site: In 2014, ~85% of certified producer organizations in Asia and Pacific received training support and from Fairtrade

International Exposure:

In 2015, 56% of producer organization representatives participated in 7 international and external events, 16% of whom were women

46% of the producer organizations participated in various workshops and trainings represented by 306 participants, 8% of whom were women

Training topics included Internal Control Systems, managing the Fairtrade Premium, prevention of child labour, disaster prevention, Standards compliance and adaptation to climate change.

105 Producer Organizations received training in market access, productivity or product quality

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Market LinkagePremium Receipts

2015 MEL ANALYSIS

Fairtrade Premium DistributionBy Products (2014)

• Coffee still forms the highest share of the Fairtrade premium revenues: Share 45% in 2012-2013; 41% in 2013-2014 [2015 numbers are being calc] • Cane sugar & tea are stable at 23% and 21% respectively. • Fairtrade cotton saw a slight increase in Fairtrade premium revenues from 5% to 8%

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Fairtrade Premium UsageMonitored, Evaluated and Audited

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Under ‘Services to communities’

7% on education

6% on health services &

2% on community infrastructure

Under ‘Services to farmer members’

9% on provision of agricultural tools

6% on farm best practices

5% as payment to members

3% on agricultural training

Under ‘investment in producer organizations’

25% on HR & administration of the PO;

21% on creating facilities and infrastructure

47.81%

1.78%

21.21%

29.20%

Investment in producer organizations Other Services to communities

Services to farmer members

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@ VIETNAM

Coffee

Cocoa

Nuts

Fresh fruit

Tea

Herbs

Herbal teas & spices

Products and Potential Products300+ to choose from | Coffee, Cocoa Core Products

Raising Incomes and Improving LivesCase Studies from India, Sri Lanka

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From worker to supervisor

“It is because of Fairtrade that I have the opportunity to sit together with the management and workers at various forums to discuss our issues and how Fairtrade Premium should be utilized as an equal. Everything is decided democratically and gives us a voice.” Lalita Inbarani, Sri Lanka, bio tea of Stassen estate

Raising Incomes and Improving LivesCase Studies from Indonesia

DREAMING BIG: one of the first all-women coffee cooperatives in IndonesiaBeing part of the cooperative Koperasi Kopi Wanita Gayo has improved the women’s quality of life. Previously, the women knew neither about coffee roasting nor how to improve cultivation. Only their husbands had received this training. Now the women, too, are learning new skills. In fact, the first Fairtrade Premium was spent on training to increase soil fertility and learn cupping skills. The women also plan to create a health centre catering for women’s and reproductive health, but also focusing on Ear Nose and Throat and abdominal problems. 27

“My aspiration is that I want to prove that we can achieve busness success with our will and

determination. I want our cooperative to become internationally recognized and perform even

better than our husbands’ cooperatives.” Passionate words of Yuyun Sri

Wahyuni.

Rizkani Ahmad, chair is only positive about recent developments. “The women in our community feel closer and we now have a channel to express our interests, experiences and plans,” she says. “The women say to me, ‘We may not have much education but we have big dreams’.”

Positive impact seen in virtually every set-up

Many studies show that household income has increased

This extra income meant more savings, purchase of household assets, diversification of income sources and a change in mind-set regarding longer term investments

Income effects were mostly due to Fairtrade Minimum Price. Fairtrade Premium also played a crucial role in enhancing incomes via improved productivity, quality and/or reduced costs

However, there are still some key challenges:

Income growth was found to not always be sustainable across the years. The differences in income at household level are sometimes relatively small

Fairtrade’s impact was seen as more important in stabilising incomes (than in boosting them) Also, for farmers with lower yields it was more difficult to cover the high costs of production

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Raising Incomes and Improving LivesLearning from Research

Top countries by Percentage Share of Fairtrade Premium Vietnam is at #4

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