Fairtrade isn't just about farmers or producers, it's about making sure the entire supply chain is sustainable. Find out how Fairtrade offers a meaningful way to demonstrate transparency in your procurement.
One of the most topical themes in supply chain management is the notion of sustainability and traceability. Sustainability though means more than just turning off the lights and saving water, it means examining the long-term viability of a given supply chain. With this in mind, there is a responsibility to consider the ability of the farmer growing the commodity, to create an ongoing livelihood. In order to facilitate that, these frontline producers need to be paid enough to create a sustainable farm. To deliver traceability, Fairtrade provides independent third-party certification to provide a robust and transparent audit of the supply chain process from farmer, to exporter or trader, through to manufacturer and on to the consumer.
There are a number of challenges that commodity producers face, including, but not limited to; a lack of control over the market price or production costs of their key commodity, changes in climate patterns, management of pests and disease, deforestation, forced labour and limited consumer knowledge of the value chain. There is a critical link between these factors and the ongoing sustainable livelihood of the farmer. The intersection of the economic, environmental and social impacts of these challenges and how they are managed in a manner that provides for an equal share of the value chain, is vital to the viability of the supply chain.
Developed in consultation with producer groups, farmers and traders, the Fairtrade Minimum Price is a key component of the Fairtrade System. The Minimum Price is set at a price point which allows a given commodity to be sustainably produced in a given area. This safety net helps to provide financial security and assist farmers to plan for the future. Coupled with the Fairtrade Minimum Price is the producer Premium. This is a payment made to farmers and workers that is invested back into the cooperative. The projects and the focus of this investment is decided upon by the cooperative, recognising that they are best placed to understand the challenges facing their community. This premium is frequently used to deliver improvements in product quality and farming techniques, therefore improving the price potential achievable at market.
Investing in farmers to ensure sustainable livelihoods is an investment not just in their future, but the future of your business. Unless those at the beginning of global supply chains are willing and able to sustainably continue farming, and working to produce global commodities, then the long-term viability of these products is thrown in to doubt. If you are keen to continue to have access to some of these at risk commodities, such as cocoa, coffee and tea then you need to build an ongoing, sustainable supply chain that has the producer at the heart of the process – consider their livelihood. We do.