 Hi, I'm Jane. I'm the Editor-in-Chief here at Food Unfolded and today I'll be addressing the question Does the fair trade system really work? Some of you have asked us to investigate if the fair trade system is really fair or if it's just greenwashing Greenwashing is when a company or organization spends more time and money Marketing themselves as being ethically driven rather than pursuing ethical practices. This is not the case for fair trade The system is actually focused on making a real impact on the ground with producers and laborers from low-income regions Studies have shown that the fair trade system does indeed improve the lives of its producers and their surrounding community They have higher bargaining power and trade negotiations They receive higher shares of revenue because of the minimum price model and the fair trade premium has had a Significant effect on the social welfare of the community as a whole But it's also important to point out that benefits for fair trade producers and laborers will vary depending on product and region A critique will be exploring in just a moment now Whether or not companies are using the fair trade label to market themselves as being ethically driven is Another question companies can't just slap on the fair trade label They actually have to be paying the fair trade price in order to even be allowed to use that label at the beginning of the Trade chain producers are already paid the fair trade price by the first buyer These costs are just passed along the trade chain While some companies might pass on these fair trade prices onto us the consumer Others absorb the costs and take a lower profit margin So whether or not it's just a PR move for companies to use the fair trade system It's still making a difference for producers and laborers in the fair trade chain But the fair trade system does have its limitations here are three ways in which it's limited Fair trade focuses on long-term financial sustainability of its producers and laborers But long-term financial sustainability cannot be achieved without considering environmental sustainability Fair trade international says it themselves Farmers are on the front line of climate change facing higher temperatures droughts floods Extreme weather crop failure and more however while fair trade standards encourage Sustainable agricultural practices. It is not mandatory though It's important to consider that sustainable agricultural practices like organic farming Can have higher costs the benefit of being part of the fair trade system though Is that producers earn more and can reinvest some of their revenue into more sustainable practices in another? Another environmental issue with fair trade farming is a cluster of monocultures present in regions as small-scale farmers are producing the same crop To tackle this fair trade has been working together with farmers to diversify their land crops and products To protect their producers from further losses due to issues of climate change fair trade is also exploring the concept of climate risk insurance One study in the Costa Rican coffee sector showed that unskilled workers like coffee pickers and laborers Did not see an increase in their wages under the fair trade certification system to be clear under fair trade All laborers are guaranteed the legal minimum wage of their region However, there is often a gap between minimum wage and living wage Meaning the cost of having a decent house decent food access to medical care Etc. So then how does paying minimum wage line up with fair trades aim to empower the most vulnerable people in the trade chain? It's very delicate from an ethical standpoint because the farmer himself is already poor when you have this very small Farm where maybe for a few weeks a year they will hire someone to help them and these guys are already poor It's difficult to go and tell them. Hey, you have to pay them a wage at you and not getting But it's an issue and that's something we are trying also to regulate and to check and so on But it's very delicate and it's very complex because first you have to make sure that a small farmer is getting enough Pays so that he can then afford to pay his workers correctly because if you only protect the worker You will chase the farm into poverty. So it's it is a very difficult issue to tackle So what has been done to improve conditions for fair trade workers on fair trade certified plantation and estates Fair trade premiums are 100% Reserved for its workers the workers manage a joint committee that receives the premiums and there they can collectively Agree to use part of that money as supplemental wages Additional to their minimum wage. They can also use the premium in other ways Like buying coats or paying tuition fees for their kids The most important aspect of the fair trade system is that it leaves the decision solely up to the workers not plantation or state owners Allowing them to invest these additional funds into what they feel best fits their needs Fair trades auditing system has also come under fire as child labor was allegedly found on a fair trade cocoa plantation in the ivory coast By an investigative journalist team from Dan watch in 2020 It's unclear whether the lack of auditing was due to travel restrictions under COVID-19 or systematic flaws But whenever you hear one case it really makes you wonder how many more cases like this exist How does fair trade truly ensure that its producers are not using any illegal forms of labor? Fair trade audits are usually announced in advance, but by announcing their audit schedule How can they be sure that there are no opportunities for cover-ups fair trade has criteria to identify high-risk Situations and in areas that have shown to have a higher risk of illegal labor Certifiers do conduct unannounced audits The general spirit is one of trust and it's also sometimes a Western point of view to say we are going to check these guys Because they are the bad guys. Well, they're not necessarily the bad guys. I mean, they're just people like you and me I mean because these people the children work in a farm they would rather send them to school, but they can't afford it and They need them to work on the farm because they cannot afford to hire someone for a few weeks for the harvest That's why I think a whole certification and auditing process is only part of what we're doing and it's a means to an end It's something that that make things better, but it's not gonna solve everything And that's why we also want to tackle the root cause you can limit yourself to audits and rules You know, it's forbidden. You cannot have child labor. That's it It helps to have rules because at least things are clear It helps to check because to create a little bit of pressure But if you at the same time don't do anything to make sure that these people are paid better prices You're not going to tackle the root cause of child labor Fair trades approach is one of balancing strictness and encouraging development Of course if major certification requirements have been breached Certifiers will suspend or decertify fair trade producer organizations or traders But fair trades overall focus is to give their producers an opportunity to address problems and improve over time Fair trade is not a perfect system, but it's a good start Today the fair trade system is comprised of over 1.7 million farmers and workers from 72 different regions and territories And has over 35,000 fair trade certified products It might seem like a lot, but fair trade producers actually account for less than 1 percent of the 570 million smallholder farms worldwide This means that over 99 percent of smallholder farms do not work under a trade model that guarantees fairer prices Or the respect of basic working rights One thing is clear fair trade has impact The movement has been gaining traction with more consumers and retailers Committing to buying more fairly traded goods Since 2014 fair trade farmers and workers have received over half a billion euros In fair trade premiums the fair trade movement has brought light to the pervading and de-brooded problems of the trading system today And while it may not be the solution for change. It's certainly one of many