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Retailers can make money while still helping poorest


JUSTICE: We must pull together if we are to break the chains

JUSTICE: We must pull together if we are to break the chains

JUSTICE: We must pull together if we are to break the chains

Irish companies have the opportunity and the responsibility to support the wide range of Fairtrade products, writes Peter Gaynor

Martin Luther King said that "before we finish breakfast in the morning we have already depended on half the world". And they also depend on us.

It is one of the great failures of the 21st Century that so many millions of human beings are still living lives of effective servitude – while at the same time participating in business supply chains that feed our hunger, slake our thirst, allow us to indulge our affordable luxuries and contribute to making handsome profits for some.

Answering the question about how we as citizen consumers are responsible for the consequences of what we buy from people in developing countries is at the heart of what Fairtrade sets out to do. The question of how different actors in these supply chains are responsible, like suppliers and retailers, is even more important.

In business there are nearly as many business models as there are businesses. As many kinds of markets as there are products, and as many capitalisms as there are people putting their capital into a business.

Historically the business model for Fairtrade was exclusively about us as consumers making positive choices to support the small farmers of commodities like coffee and cocoa. We found an enlightened shopkeeper, say Oxfam or Amnesty, and bought their products.

Then Fairtrade products began becoming available in mainstream retailers from well-known brands. And in recent years the business model has been extended to include decisions by suppliers to convert whole categories of products to Fairtrade.

This newer development has contributed to Fairtrade sales in Ireland increasing by nearly 100 per cent during the recession between 2008 and 2012.

Jostein Solheim, CEO of Ben & Jerry's, whose ice-cream is Fairtrade Certified in Ireland, says: "Fairtrade is about sourcing in a responsible manner, being mindful of the importance that farmers play in our global society. Put simply, it is the right thing to do."

In 2012 Fairtrade contributed an extra €80m in premiums to organisations that are Fairtrade Certified. It does this by accumulating relatively tiny amounts of extra money from each Fairtrade product that is sold. That is one of the reasons why Fairtrade makes a real difference only when significant volumes of product are sold on Fairtrade terms.

Albert Einstein, when asked about the most powerful force in the universe, replied: "Compound interest." And the benefits of Fairtrade are similar – all of those small amounts add up – and when paid regularly over time you get a powerful force for improvements in farmers' and workers' circumstances.

For all kinds of reasons, big businesses are finding it increasingly necessary to deal with sustainability issues in their supply chains. Their need to manage supply chain risks, like security of supply, and quality control is persuading them to sign up with one or more of the different voluntary social and environmental standards systems like Fairtrade.

For the chocolate companies the sustainability challenge is to find another generation of cocoa farmers in West Africa willing to farm cocoa when they have seen their parents' generation living in poverty for decades. For Indian tea producers, the sustainability challenge is to find and maintain a workforce willing to live in remote parts of the country as the whole sub-continent modernises around them.

The companies with the greatest power to harness our spending power to help lift people out of poverty are the retailers – and in Ireland they seem either blissfully unaware or indifferent to both the opportunity and responsibility to do so.

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Compared to retailers in other countries like Switzerland, the UK and Germany, Irish retailers are largely unengaged in any ambitious way with the Fairtrade project – they seem to think that stocking a few bits and bobs is enough to get them off the hook.

While in Switzerland about 50 per cent of all the bananas, 30 per cent of roses in Germany and 40 per cent of bagged sugar in the UK are Fairtrade – the corresponding percentages in Ireland are a joke.

On a more positive note, the Irish Government has a commendable record when compared to many others for funding support programmes for fair and ethical trade initiatives. Irish Aid has long been a key funder for this kind of work in countries like El Salvador, Nicaragua, Honduras and Guatemala in Central America, as well Kenya, Uganda, Ethiopia and Tanzania in East Africa.

These support programmes often come in at a level that business is unwilling to engage in, ie because the farmers involved need training in Good Agricultural Practices and organisational development before they will be able to produce a product of the quality that the international market wants.

But governments as well as businesses and citizens also have responsibilities for how they impact on poor people through their purchases.

We have no way of knowing whether the Government is supporting small farmers and workers through the approximately €15bn it spends on public procurement every year. The previous government had a commitment in the Programme for Government to source goods on Fairtrade terms where possible, but there is no similar commitment in the current programme.

There is apparently the glimmer of a new confidence about a recovery in the Irish economy – let's hope so.

And let's also hope that our businesses and particularly our retailers rise to the challenge of making that recovery work for the poorest in their supply chains – who for too long have been invisible, nameless, business partners.

Peter Gaynor is executive director of Fairtrade Ireland. Fairtrade Fortnight 2014 takes place from February 24 to March 9. See powerofyou.fairtrade.ie for more details

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