Tuesday, August 31, 2010

Interview: Dr. Matthias Altmann, New Markets Manager, Fairtrade Labelling Organizations International

Established in 1997, Fairtrade Labelling Organizations International (FLO) is an association of 3 producer networks and 21 national labelling initiatives that promote and market the Fairtrade Certification Mark in their countries. Fairtrade labelling organizations exist in 15 European countries as well as in Canada, the United States, Japan, Australia and New Zealand.
To ensure the transparency and the independence of the Fairtrade certification and labelling system, Fairtrade Labelling Organizations International was divided in January 2004 into two independent organizations:
FLO International develops and reviews Fairtrade standards and assists producers in gaining and maintaining certification and in capitalizing on market opportunities on the Fairtrade market. To ensure the transparency of the system, the standards are developed and reviewed by the FLO Standards and Policy Committee, in which FLO members, producer organizations, traders and external experts participate.
FLO-CERT ensures that producers and traders comply with the FLO Fairtrade Standards and that producers invest the benefits received through Fairtrade in their development. Operating independently from any other interests, it follows the international ISO standards for certification bodies (ISO 65).

As noted by Dr. Matthias Altmann, New Markets Manager, Fairtrade Labelling Organizations International, Fairtrade is an alternative approach to conventional trade and is based on a partnership between producers and consumers. Fairtrade offers producers a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future. Fairtrade offers consumers a powerful way to reduce poverty through their every day shopping.
“When a product carries the Fairtrade Mark it means the producers and traders have met Fairtrade standards. The standards are designed to address the imbalance of power in trading relationships, unstable markets and the injustices of conventional trade,he said.
He noted that there are two distinct sets of Fairtrade standards, which acknowledge different types of disadvantaged producers. One set of standards applies to smallholders that are working together in co-operatives or other organizations with a democratic structure. The other set applies to workers, whose employers pay decent wages, guarantee the right to join trade unions, ensure health and safety standards and provide adequate housing where relevant.
Fairtrade standards also cover terms of trade. Most products have a Fairtrade price, which is the minimum that must be paid to the producers. In addition producers get an additional sum, the Fairtrade Premium, to invest in their communities.
“The minimum price paid to Fairtrade producers is determined by the Fairtrade standards. It applies to most Fairtrade certified products. This price aims to ensure that producers can cover their average costs of sustainable production. This means it can serve as a safety net for farmers when world markets fall below a sustainable level. Minimum price only sets the minimum trading price; producers and traders can also negotiate a higher price, for example on the basis of quality, and for some products, FLO also sets different prices for organic crops, or for particular grades of produce, Mr. Altmann said.
In addition to the Fairtrade price, there is an additional sum of money, called the Fairtrade Premium. This money goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions.
This sum of money is paid on top of the agreed Fairtrade price. It is usually invested in social, environmental or economic development projects that are decided upon democratically by producers within the farmers organization or by workers on a plantation. For example, education and healthcare, farm improvements to increase yield and quality, or processing facilities to add more value to the products.
As many projects funded by the Premium are communal, the broader community, outside the producer organization often benefits from Fairtrade, he said.
There are now thousands of products that carry the Fairtrade Mark. Fairtrade standards exist for food products ranging from tea and coffee to fresh fruits and nuts. There are also standards for non-food products such as flowers and plants, sports balls and seed cotton.
For the first time in its history, FLO is revamping its standards. Better cost-benefit ratio, simplified compliance criteria and ensuring that FLO meets the needs of Fairtrade farmers, workers and traders: these are the key goals of the New Standards Framework. The new framework has three pillars: Production, Trade, and Business & Development which cover economic tools unique to Fairtrade and help to reinforce the Fairtrade Minimum Price and Premium.
“Our standards apply to producers and their buyers in the supply chain. They include producer standards for workers/ Hired Labour and small-scale farmers organized in Small Producer Organizations or who sell through external bodies, which is known as Contract Production. There are also standards for the importer, exporter or processor who buys directly from the producer group, he said.
Mr. Altmann noted that the Fairtrade Mark is now the most widely recognised social and development label in the world. The Mark is owned and protected by FLO on behalf of its members.
In this context he pointed out that Fairtrade Labelling Initiatives that founded FLO originally had different labels. In 2002, the International Fairtrade Certification Mark was created and since then it has gradually replaced the different national labels. Two of FLO's members are still using their own original labels. In Canada and the United States the Fair Trade Certified labels indicate that Fairtrade standards have been met.
2009 was another year of positive growth for Fairtrade, as sales continued to increase across all LI countries. It's estimated that roughly 27,000 Fairtrade products are now sold in over 70 countries. According to recent surveys, consumer awareness of the Fairtrade Mark has exceeded 80% in some countries. And, despite the economic downturn, Fairtrade has achieved a 15% increase in global retail value, with estimated sales amounting to 3.4 billion euro.
“Our ambition is to increase the number of producers in the Fairtrade system fivefold, while delivering ten times the Fairtrade Premium and increasing Fairtrade sales tenfold, by 2015,he said.
Mr. Altmann said that the best way consumers can support Fairtrade is to buy products that carry the Fairtrade Certification Mark. The Mark is now the most widely recognised ethical label in the world. When a consumer product bears the Mark it ensures that the product has been traded according to FLO's international Fairtrade Standards.
There are roughly 27,000 products on store shelves around the world bearing the Fairtrade Mark. When consumers choose to buy a product labelled with the Fairtrade Mark, they are helping to reduce poverty and encouraging companies around the world to trade fairly.