April marked the 20th anniversary of Fairtrade International. Over the past two decades, Fairtrade has gone from being a small niche initiative to a movement with global reach. In 2016, consumers in more than 130 countries spent an estimated €7.88 billion on Fairtrade products, almost five times more than only a decade before. This significant growth in sales now benefits more than 1.6 million producers and workers in 73 countries. In addition to receiving revenues that aim to cover the cost of sustainable production, producers also receive a Fairtrade Premium; that is, an additional amount to invest in projects of their choice, such as programmes to improve crop productivity, or education, health, or housing initiatives. In 2016, the Premium amounted to €150 million, the highest in Fairtrade’s history.
While the efforts and enthusiasm of Fairtrade’s founders and pioneers were crucial to this success, the political, economic and social landscape, generally favorable to sustainability initiatives, also contributed to this expansion. Within a decade Fairtrade became the most recognized and valued ethical label by consumers and a trusted partner for almost 2,000 companies worldwide.
However, the political, commercial and social realities of today are no longer the same as those that led to the rapid expansion of Fairtrade in the 1990s. The landscape has changed significantly in recent years, with some companies starting to move away from independent standards and certifications to create their own corporate sustainability schemes. Other companies are looking at different ways of addressing supply chain challenges such as child labour and gender inequality.
We are facing a new reality that brings not only challenges but also opportunities, and both will drive the need for new and innovation solutions.
In 2016, the organization adopted a new global strategy and embarked on an ambitious growth and expansion plan. Our ambition is that by 2020 we will have made significant progress towards a living wage and living income for producers and workers with whom we work. During the past year we have taken important steps in this direction, putting in place robust living wage and living income strategies in collaboration with our partners. As part of this, we must incentivize and encourage producer organizations to sell a higher percentage of their produce under Fairtrade terms and thus improve their standard of living – the reality is that many of them sell only a small fraction of their output to the Fairtrade market. We also aim to make significant progress towards the empowerment of women and young people in Fairtrade supply chains.
In order to bring greater benefits to producers and workers, we need to continue working closely with our commercial partners and be responsive to their needs. The pressing need to innovate to ensure Fairtrade’s future commercial success was recognized by our General Assembly in June 2017. This led to the adoption of a framework for a new Offer to Business. Under this initiative, Fairtrade will launch new services to companies beyond existing standards and certification such as supply chain management. Over the coming months we will work tirelessly to define these new services with the ambition to roll out the new offer next year.
Fairtrade is embracing changes in the sustainability landscape. We are building on the successes of the past two decades and are excited and optimistic about the prospects that the future will bring. During this process, the Fairtrade of the future is committed to continuing to put producers and workers first, ensuring they are in the driver’s seat in this transformational phase. At the same time, we will continue to collaborate and challenge companies and governments to make the 21st century trading system an engine of prosperity and well-being for all.
Enjoy reading and I look forward to working with you through this journey of change!
Darío Soto Abril