How fair is fair trade anyway pt.2

Last post was about International Fairtrade, this time I am trying to figure out if the World Fair Trade Organization (WFTO) is doing better job than the fair trade label.

WFTO is also claiming to support small producers, saying in their web page the following:” The organization supports marginalized small producers, whether these are independent family businesses, or grouped in associations or co-operatives. It seeks to enable them to move from income insecurity and poverty to economic self-sufficiency and ownership. “. This is their n.1 principle. There are also other principles including women empowerment, child and forced work control etc.  My text focuses on fairness towards small producers.

The WFTO annual fee consists of a membership fee, monitoring fee, and regional fee. Information is based on WFTO’s Annual Fee Structure 2015 which one can find on their web page. Next example is theoretical, and it is different than one I post last time because WFTO’s fees are based on yearly turnover and Fairtrade International’s fees are based on number of workers. My opinion is that WFTO’s way is better because number of workers does not tell you very much about how much is the turnover in a year. One producer might have few really good workers and turnover is good, other producer might have more workers but turnover is weak. In International Fairtrade system last mentioned is paying more which does’t make sense.

To get WFTO label producer has to pay application fee which is based on yearly sales: more you make, more you pay.  Application fee is minimum 100€ and maximum 750€.

Example:

Producers yearly sales are under 135,000 per year, so he or she has to pay 100€ for application fee.

Annual fees:

Membership fee: 375€

Monitoring fee: 25€

Regional fee*: 100€

Total: 600€ in first year and after that 500€

So in theory and in practice WFTO is more fair than International Fairtrade, but still there is the same problem that if average monthly income is less than 50€, the small producers  under WFTO are still quite big. They are smaller than the ones under International Fairtrade label, but not actually small producers. Next post will have examples of organizations that are playing fairly.

By:Tia Maria

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