Within the international tea trade small-scale tea farmers and workers have the least power and often do not get their fair share of the benefits. Small-scale tea growers often have no choice but to sell their tea through factories or middlemen and have little bargaining power to earn a better price. Tea estate workers can be powerless to change their circumstances as they may be totally dependent on the estates for everything e.g. wages, healthcare, schooling and sanitation, leaving them with little control over their lives.
Not all tea plantations have these problems and some are working hard to improve conditions. But it is difficult to make real improvements when tea prices are so volatile and have generally been on a downward slope. It's hard for tea plantations to pay proper wages and invest in better housing or equipment if buyers are not paying them a fair price.
For more information please see research by the Dutch NGO, SOMO, available here and read our case study booklet 'The People behind your Cuppa' available at www.makeitfair.org.uk.
Tea prices have experienced a sharp increase in the past 12 months, mainly due to bad weather conditions and political instability in the main exporting countries, like Kenya. This peak in price must be seen against the backdrop of long-term low tea prices, e.g. throughout the past 10 years tea auction prices in Kenya have remained at least 50% below today's high prices. Even when tea prices are temporarily high, conditions for tea farmers and workers still desperately need improving.
Prices for food and farming inputs like fertiliser have increased dramatically. This is hitting small-scale farmers particularly hard as access to credit has also been more limited. Under Fairtrade terms, importers must help producers with pre-financing where producers request it, thus reducing the need for external credit that places them under financial stress .
If the market price rises higher than the Fairtrade minimum, the buyer must pay at least this higher price, plus the Fairtrade premium.
Fairtrade is an alternative approach to conventional trade which facilitates trading relationships based on equity and transparency and contributes to sustainable development for marginalised producers and workers and their communities. This approach is reflected in the Fairtrade tea standards. Fairtrade is also based on a partnership between producers and consumers.
When a tea product carries the FAIRTRADE Mark it means that tea producers and traders have met a set of social, economic and environmental requirements, as well as agreeing to progress requirements that encourage continuous improvement.
Traidcraft's experience and research on the conditions of small-scale farmers and workers in the tea industry has shown that price is the key factor to help improve the lives of producers and their families. Fairtrade offers a minimum price for tea which protects producers from fluctuations in conventional market prices. Tea producers also receive an additional sum, the Fairtrade premium, to invest in their communities as they see fit. Producers must decide collectively how to spend this premium.
Fairtrade works for both small-scale farmers and large estates. One set of Fairtrade standards applies to small-scale farmers that are working together in co-operatives or other organisations with a democratic structure. These ensure that producers receive at least the minimum Fairtrade price for their crop plus the Fairtrade premium. They also ensure that all members have a voice in the organisation through a system of representation. The other Fairtrade tea standards applies to estate workers (hired labour) whose employers must pay decent wages, guarantee the right to join trade unions, ensure health and safety standards and provide adequate housing where relevant.
Fairtrade also includes environmental standards which require environmental protection to be part of the small-scale farmer organisation's management plan, restricts the use of agrochemicals and encourages sustainability.
To find out more about the Fairtrade tea standards, please visit www.fairtrade.net
Fairtrade is the only certification system that includes a minimum price that covers the cost of sustainable production and pays an extra premium for investment in the community. Fairtrade empowers producers in a way distinct from other certification schemes. Producers are supported to organise into groups, giving them greater negotiating power. They are also offered better access to information, both technical and rights-based. In this way, Fairtrade tackles poverty and promotes the development of the communities where it is applied.
Fairtrade is also the only system that allows producers to request partial pre-payment of the contract. This is vital for small-scale farmers as it ensures they have cash flow, can reduce the need for expensive credit, can predict their income, and plan for the future.
Not necessarily, it depends on the retailers and the tea companies. For example, when Sainsbury's switched all its bananas to Fairtrade there was no increase in the price.
The Fairtrade price and the Fairtrade premium are not linked to the retail price of the finished product and are not always passed on to the consumer. The Fairtrade price is paid directly to the producer by the next person in the supply chain (usually an exporter or importer). It is not calculated as a proportion of the final retail price, which is negotiated between the product manufacturer and the retailer.
In the UK, many Fairtrade products are the same price or cheaper than similar conventional products. The cost of the raw produce that is shipped, processed, packaged and marketed by others in the chain, represents a very small proportion of the cost that consumers pay. It is quite possible for companies to pay the additional costs of Fairtrade without it being reflected in the retail price at all.
Because the demand for Fairtrade tea is small (currently about 10% of the market) relative to total supply, workers on large estates who supply a tiny proportion of Fairtrade tea may not be fully aware of Fairtrade. That's why a campaign like this is so important. We want many more of the estimated 20 million tea workers and farmers to receive the benefits of Fairtrade.
Having said that, no system is perfect and there are sometimes problems found even within Fairtrade relationships. Thankfully these are very rare. The independent international organisation FLO-cert is responsible for monitoring Fairtrade. Because the Fairtrade system is explicitly about achieving development and producer empowerment, the standards continue to evolve.
No. Fairtrade is market led so it can only grow in line with demand. Producers only receive the Fairtrade minimum price and premium where they have a buyer willing to pay for them.
The most frequent criticism of Fairtrade is that it could encourage over-production. Our experience suggests that it need not increase production if it is matched to market requirements and linked to other sustainability measures such as diversification and quality improvements. The minimum Fairtrade price is not just given by buyers; it is part of the trading relationship and places obligations on producers to comply with Fairtrade standards and improve quality and sustainability.
Rather than being 'anti-competitive', Fairtrade complements and strengthens the market. It is an essential component to any trade policy that includes a genuine concern for the welfare of poor people. It is unique in that it factors in the real cost of production.
Good environmental standards are one of the requirements for Fairtrade certification and the Fairtrade logo can help you make environmentally friendly choices. At the heart of Fairtrade is a concern for small-scale farmers and it is these groups that are on the sharp end of climate change. They are the first to see the impact and have a first hand understanding of the need for a sustainable approach to the environment.
Fairtrade can help poor farmers prepare and adapt for the worst affects of climate change, from learning new ways of farming, to using the social premium to fund environmentally-friendly projects for the local community.
Ideally we'd like all tea to be Fairtrade, but as the five biggest brands have 72% of the UK's tea market3, focusing on those brands is a good place to start. So, that's Tetleys, PG Tips, Typhoo, Twinings, and Yorkshire Tea.
We are not accusing these companies of bad practice - in fact all of them have taken steps aimed at ensuring conditions for suppliers improve. This has been a welcome move, but only goes so far. While some of these companies have a Fairtrade tea brand within their business, (for example Twinings have Jackson's of Piccadilly, Tetley have Good Earth and Typhoo have Ridgeway), to date none of the companies has taken the step of converting all their tea to Fairtrade. Now is the time to take the next step.
Big brands in other categories have shown that a switch is possible. For example, Tate and Lyle moved its entire retail cane sugar range to Fairtrade, making it the largest ever switch by any major UK food or drink brand. The conversion involved two years of planning and the new Fairtrade sugar was gradually introduced to the UK market, starting with a single product. Another well-known switch is Cadburys Dairy Milk which now carries the FAIRTRADE Mark benefiting cocoa farmers and their communities.
Tea is lagging behind other products like cocoa, sugar and coffee, but a switch is possible.
For example, all of Co-op, Sainsbury's and Marks & Spencer's own-brand tea is 100% Fairtrade. And fair trade pioneers like Cafédirect have been selling Fairtrade tea for 15 years.
Fairtrade is a long-term development process which empowers farmers and workers.
At the moment 7.5 million people benefit from Fairtrade4. But without greater demand for Fairtrade products, millions more are left outside of the system.
A full conversion to Fairtrade will not happen overnight, but companies can commit to Fairtrade right now. They can then go on to work with their current producers to achieve Fairtrade status, opening up new opportunities for thousands more tea farmers.
British companies have started to recognise that there are some real issues to be addressed in tea production. Many formed the Ethical Tea Partnership and some have adopted the Rainforest Alliance standard.
This is a good start but unless the tea you buy carries the FAIRTRADE Mark, there is no guarantee that the tea producer received both a fair price, or an additional premium which was paid directly to the farmers and workers to invest in their local community.
An elected group of workers decide how their Fairtrade premium payment is spent. This payment – typically US$0.50 on a kilogram of processed tea at present – may mean that sending their children to school or having access to clean water is now a real possibility for tea workers and farmers in the Fairtrade system.
These high standards extend to the environment and, unlike other schemes, as a consumer you know that when you see the Fairtrade Mark on a box of tea, there will be 100% Fairtrade tea in the box.
No. Traidcraft welcomes the steps that tea companies have taken to start addressing problems in their supply chains and improve their practices, including adopting ethical schemes.
Our research shows that all ethical schemes offer some benefits to producers but Fairtrade certification delivers crucial, unique benefits. These include:- a guaranteed minimum price to safeguard producers against the fluctuations of world commodity prices;
- a Fairtrade premium which is paid directly to producers to invest in their communities;
- standards which cover the terms of trade – placing obligations on both the buyer as well as the producer;
- a model which encourages democratic organisation thereby empowering workers.
In Traidcraft's fight against poverty, we would like to see all tea Fairtrade certified. If a tea company is working with an existing ethical scheme, we encourage them to explore how they could additionally bring the benefits set out above to their producers and satisfy growing demand from UK consumers that small-scale tea producers are given a fair deal.
Dual certification – adopting Fairtrade in addition to an existing scheme – is one possible route to ensure producers are able to access the benefits of Fairtrade and provide independent assurance to consumers. However, tea companies must ensure that this does not increase costs and time burdens on the producers, for example, by bearing the costs of registration and investments necessary for compliance.
We recognise that Fairtrade cannot fix all the problems facing tea producers; that's why Traidcraft is working across a range of issues that affect small-scale tea growers and workers – from practical day-to-day support to major policy issues. This is part of our unique 'trade, support and influence' approach.
Through Traidcraft Exchange:- We have been running overseas development projects that benefit small-scale tea farmers since 2006. Our work helps them boost their incomes from tea, make their voices heard by decision-makers, and to be less vulnerable to price fluctuations. For example, our work with small tea farmers in India has produced some impressive results:
- Over 16,000 previously dispersed tea growers have organised into 306 societies and have also formed a national level body to represent their needs. This collective voice has given them much greater profile, and they have succeeded in getting the Indian government to frame policies favouring smallholder growers.
- Farmers have also improved the quality of their leaf, have better relationships with the tea factories and agents, and are receiving much higher prices. Farmer incomes have increased by over 25%.
- We also encourage farmers to diversify into additional crops, reducing their reliance on tea as their only income.
- We are developing new programmes of work in Bangladesh and Kenya, and wider programmes in India that aim to improve the lives of tea workers and small tea farmers.
- Traidcraft is the UK pioneer of fair trade tea and we've been trading tea fairly for three decades. In that time we've worked with a large number of tea growers across Africa and Asia and many of the early Fairtrade suppliers in Tanzania, Uganda and Kenya started off with a Traidcraft trading link. Traidcraft led the development of the first Fairtrade certified Kenya Tea Develpoment Agency (which produces about 60% of Kenya's tea) factory, Kiegoi.
- Currently Traidcraft is choosing to buy from especially marginalised tea growers in countries like Malawi, Uganda, Tanzania and Rwanda and in poorer regions of India where tea growers are particularly vulnerable and have the potential to benefit the most from trading with us.
Traidcraft is committed to fighting poverty through trade and having the greatest possible impact. Over our 30 year history, we have consistently worked to influence other companies to adopt Fairtrade. This is just one example.
There is a risk that by encouraging bigger brands to switch to Fairtrade we might lose some sales – but we hope that our customers will continue to support Traidcraft, recognising the quality of our products as well as our commitment to going the 'extra mile' and doing much more in tea than 'just Fairtrade'.
We are driven by a desire to see real and lasting change for the workers and producers involved in this global industry, so it's a risk we have to take!
It's good to shop in supermarkets because it shows there is demand for fair trade, but there are lots of benefits to buying from exclusively fair trade companies such as Traidcraft, Cafédirect, and Divine.
Traidcraft exists to fight poverty through trade, so by buying directly from us you are supporting our wider work. We seek to continually push fair trade into new areas and our fair trade standards go above and beyond the minimum criteria guaranteed by the FAIRTRADE Mark.
We hope that people who want to support fair trade in its fullest form will continue to buy from Traidcraft.
