India Fair Trade National Consultation Workshop

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India Fair Trade National Consultation Workshop

• European Fair Trade Research Presentation
• By Nabs Suma
• FairOrganic Solutions Ltd

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Perspectives on the European Experience

• FAIR TRADE THE EUROPEAN HISTORY
• 1950s Introduction of crafts through Oxfam
  outlets
• 1960s Growth of World Shops
• 1970s NGOs link Development through Trade to
  Alternative Trade.
• Trade not Aid
• Development through Trade

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Perspectives on the European Experience

• The First Products Traded
• Crafts
• Coffee
• Other Food products, Cocoa, Tea, Sugar, Fruit
• 1980s The introduction of Labelling and shift
  from Alternative trade to Fair Trade.
• 1988 Max Havelaar Netherland set up.
• 1987 European Fair Trade Association Formed.
• 1989 International Fair Trade Association
  Formed to improve the livelihoods of
  disadvantaged people through trade

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Perspectives on the European Experience

• 1990s Growing Awareness the role of World
  Shops.
• 1994 Network of European World Shops formed.
• The Growth of Labelling Organisations in Europe.
  
• 1997 Fairtrade Labelling Organisation formed.
• 1998 F.I.N.E. is formed.

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Perspectives on the European Experience

• The F.I.N.E. definition of Fair Trade-
• Fair Trade is a trading partnership, based on
  dialogue, transparency and respect, that seeks
  greater equity in international trade. It
  contributes to sustainable development by
  offering better trading conditions to, and
  securing the rights of, marginalized producers
  and workers especially in the south. Fair
  Trade organisations (backed by consumers) are
  engaged actively in supporting producers,
  awareness raising and in campaigning for changes
  in the rules and practices of conventional
  international trade.

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Perspectives on the European Experience

• Other schemes
• Rainforest Alliance focus on how farms are
  managed covering a range of protection issues for
  mainly workers as opposed to farmers.
• Utz Kapeh - a scheme that is unique to coffee and
  which allocates a specific premium to
  transactions of coffee by operators who have met
  specific standards

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Perspectives on the European Experience

• Key Moments in the History
• The Advent of World Shops
• The Introduction of Labelling
• The setting up of IFAT and FLO
• The growth of the Labelling Initiatives , their
  different approaches
• And for the future
• The setting up of FINE

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Perspectives on the European Experience

• PRICE
• Why is price an issue in Fair Trade?
• international trade has not rationalised the
  consequences of allowing market forces a free
  reign in determining prices
• Those most marginalised find it difficult to
  negotiate better deals.
• So what are the potential solutions?

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Perspectives on the European Experience

• ONE APPROACH
• Minimum Prices and or Product Premiums.
• SECOND APPROACH
• Focuses on delivery of an agreed fair price
• OTHER APPROACH
• Prices to be negotiated, covering costs and
  transparent about information from traders.
• Looking for equitable distribution of returns.
• Risk Sharing Mechanisms
• Terms of Trade

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Perspectives on the European Experience

• The Trading Relationship or Terms of Trade.
• What is the importance of this?
• The background behind which transactions are
  completed.
• Including offers for pre-finance
• Flexibility on quality
• Long term planning of contracts, shipments.

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Perspectives on the European Experience

• WHAT ARE THE OBJECTIVES OF THIS NEW BODY?
• WHAT WOULD YOU SEE AS THOSE IMPORTANT ELEMENTS
  THAT NEED TO BE COVERED IN THIS INITIATIVE?

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Perspectives on the European Experience

• One answer could be that a better price for the
  products being produced is the main aim.
• Another answer could for producers to be able to
  achieve better overall benefits from trading
  relationships that allow them to develop

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Perspectives on the European Experience

• How important are Support Mechanisms?
• Such as Capacity building
• Training and advice
• One Model covers Two main activities are-
• Standards interpretation and training for
  producers.
• Market Access for fair trade products of
  producers.
• Another Model uses a System that actively
  encourages meetings
• Conferences and Meetings give partners
  opportunity to seek assistance.
• seeking funds for producer members to attend
  their Bi-annual General Meetings.
• Some independent 100 organisations already have
  support mechanisms to assist their partners.

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Perspectives on the European Experience

• IS THIS A SYSTEM THAT IS OF VALUE TO YOU?
• WOULD YOU SEE THE INDIAN INITIATIVE INVESTING IN
  THE SUPPORT MECHANISM?
• WHAT WOULD IT LOOK LIKE HOW MUCH IMPORTANCE DO
  YOU PLACE IN IT?

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Perspectives on the European Experience

• WHAT OF RETAILERS FURTHER UP THE CHAIN?
• Offer a specific level of shelf space?
• Promote the sale of FT from their outlets all
  year round?

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Perspectives on the European Experience

• Delivery of Empowerment
• How have the different models tackled this?
• One Model
• Standards Focus on ownership (smallholders)
• Producer Network Structures
• Proposal for Networks to become members /
  part-owners of FLO
• Another Model
• Decision making process is very inclusive.
• Self Assessment, Peer Review External
  Verification.

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Perspectives on the European Experience

• Example of KCU in Tanzania.
• After 16 years in the system KCU recognises the
  following benefits-
• An ability to export directly
• Access to other market segments including organic
  and gourmet
• Ability to demonstrate the organisations
  credibility to the conventional sector and trade
  effectively
• A Good Price
• Social Benefits
• Sustainability
• No longer being dependent on Fairtrade

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Perspectives on the European Experience

• HOW MUCH DO YOU VALUE EMPOWERMENT?
• IS THE ABILITY TO SELF DETERMIN HOW YOU MOVE
  FORWARD AND CREATE MORE BENEFITS FOR YOUR
  COMMUNITIES AND PARTERS IMPORTANT?
• OR IS IT ABOUT DELIVERING MORE CONCREATE AND
  MORE DIRECT BENEFITS THAT ARE ACHIEVEABLE IN THE
  SHORT TERM TO MAKE A DIFFERENCE TO FAMILIES TODAY
  AND TOMORROW?

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Perspectives on the European Experience

• Development Through Trade.
• One Approach looks at-
• Standards also look at Organisational Capacity
  building.
• Equalising the Terms of Trade or Trading
  Relationship.
• Another Approach looks at-
• Encourages partners to become more transparent
  with each other on costs etc

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Perspectives on the European Experience

• WOULD YOU AGREE WITH DEVELOPMENT THROUGH TRADE
  AS A STARTING POINT?
• IS ADVOCACY EQUALLY AS IMPORTANT A TOOL TO USE TO
  DELIVER BENEFITS?
• WHAT WOULD YOU LIKE COVERED WITH YOUR STANDARDS?

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Perspectives on the European Experience

• Product versus Organisation approach.
• Product Systems
• Focus on Producer end and more detailed
• Potentially better at direct financial benefits.
  
• Weakness is the limited coverage up the chain.
• Some Companies use one product to gain FT
  credentials.
• Organisation System
• Does cover the overall activities of companies
• And has the potential to look up the chain.
• Lacks in the detail and would be complex to
  realistically apply totally up the supply chain.
  

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Perspectives on the European Experience

• ONE MAIN QUESTION TO CONSIDER-
• HOW DO YOU SEE THE RELATIONSHIP BETWEEN
  DEVELOPMENT AND TRADE FOR AN INDIAN MODEL?

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Perspectives on the European Experience

• Some Considerations from the South African
  experience.
• India will be in a complicated position of having
  producers with products to export as well as
  having products to be marketed internally.
• How this will work in terms of pricing of final
  products will be key.
• The stakeholders or beneficiaries will need to be
  clearly defined especially to demonstrate how
  inclusive the structure is to outside parties.
• The structure and its governance will need to fit
  in with any existing models criteria for
  labelling initiative.
• Not all stakeholders will have the same level of
  commitment so it is important that those driving
  the initiative are able to give a large amount of
  time towards the initiative.

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Perspectives on the European Experience

• Is Trade the right focus?
• Is it Fair Trade? - Could argue that Fair Trade
  is a poor term to reflect what is trying to be
  achieved.
• Is it more about keeping both parties happy? What
  does Fair mean?
• Is it about risk sharing? Is it about better
  returns for all? The producer ? the trader? The
  retailer? The consumer? It is trying to keep
  them all happy?
• Is it just being more reasonable or more
  responsible?

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Perspectives on the European Experience

• Which ever direction the discussions take us I am
  looking forward to working with you to create a
  positive outcome towards Indias Future!.
• THANK YOU
• ENDS