Examination of Witnesses (Questions 280
- 284)
TUESDAY 27 MARCH 2007
MR PAUL
CHANDLER AND
MR MICHAEL
GIDNEY
Q280 Ann McKechin: I appreciate it
is much more difficult with small producers because by their nature
they are individual, but it seems to me the way we should approach
it is by trying to persuade small producers to go into things
like co-operatives so they can organise because when you have
the ability to organise labour you have the much greater ability
to then increase your take of the total price?
Mr Chandler: That is one of the
things we do around the world, get farmers to come together to
work collectively. For example, in India one of our producer groups
is linked to an organisation called Agrocel, which is a range
of products, they were the first Fairtrade certified cotton producer.
One of the things we were doing was trying to bring cotton farmers
within a particular region of India together so that in an organised
way they would be able to make more impact on the market. In 2001
we started this project with 50 farmers and there are now 2,000
farmers engaged in this particular enterprise who are now supplying
Marks & Spencer's with quite a lot of their Fairtrade cotton
as well as supplying Traidcraft. Traidcraft, though, is necessary
during the conversion period to be a trader to give them the ability
to make the transition towards fair trade and now we are working
with them to diversify beyond cotton into other crops as well
so they can get a more balanced range of local markets and international
markets and not be dependent simply on cotton as a commodity.
Bringing the farmers together has enabled much better inputs,
and has enabled them to learn from each other and develop new
skills, so I entirely agree with you.
Q281 Ann McKechin: So that is where
you think the UK Government should probably be spending a bit
more of its time?
Mr Chandler: I think it is one
of the areas where the UK Government could help; my colleague
might have other areas too.
Mr Gidney: I think we need a much
clearer overarching strategy from DFID about what kind of trade
it wants to support and why. Fair trade is a part of that, it
is not the exclusive priority, but we do not get any sense of
a maturing understanding of strategy coming from DFID at the moment;
in fact, we are concerned that DFID is rolling back on some of
its earlier commitments. When you think back to the earlier White
Paper commitments about a strategy for harnessing the private
sector for development and sharing the benefits of globalisation
with everybody, fair trade, again, was a part of that but the
ambitions were much bigger. In the last few years it feels that
DFID is thinking differently. Perhaps, for example, DFID thinks,
"Fairtrade banana sales are set to take off now, we can step
back"? Maybe it is that engaged, but our line would be it
is far too soon for DFID to step back yet. We are just now seeing
the benefits of economies of scale in certain product categories,
a very small number, bananas and coffee, for example, where we
have large retailers going for 100% switches, like Sainsbury's
with bananas or M&S with coffee and tea, but that is really
new. The job of investing in developing producers and standards,
and bringing the goods to market consistently in terms of quality,
deliverability and price is hugely long-term and it is troubling
that there is this feeling of rolling back.
Q282 Ann McKechin: Do you feel basically
there is a split between the private sector development, which
DFID has indicated is one of their new priorities in the White
Paper, and on the other hand their support for a fair trade initiative
in the Ethical Trading Initiative? Do you think there needs to
be much more of a joined-up approach between the two?
Mr Gidney: A joined-up would be
a very important place to start, but it is also about having a
sense of what the planned returns on DFID's investment are and
what the results are expected to be. It feels as though DFID's
support for fair trade—whether by a dedicated fair trade
company like Traidcraft or a certification scheme like the Fairtrade
Foundation—or support for some of the ethical or corporate
social responsibility schemes is project-based and ad hoc. We
are losing something by not capitalising on the impacts and the
benefits from these different initiatives.
Q283 John Barrett: If I could turn
to the power of the consumer and how do they make an impact and
find out as much they need to know. We have heard about increased
information on labelling for nutritional value and then all the
major retailers, Tesco's and others, getting into the market and
not appreciating that consumers are spending billions of pounds
in their stores. How do we make sure that the consumers know exactly
what it is they are buying and find out as much as possible? There
are lots of pros and cons to different standards and lots of voluntary
standards self-imposed. As you mentioned earlier, cotton, it can
be fairly traded cotton, but not necessarily a fairly traded T-shirt
if the cotton is then being turned into a T-shirt in a sweat factory
somewhere. What is the best way of informing consumers without
over-confusing the issue? Is labelling the answer or are there
other alternatives, because the retailers are certainly in on
the game but how the consumers sort out the good from the bad
is becoming more and more difficult. You mentioned one supermarket
going for 100% switch to Fairtrade bananas, one might assume when
you go into that store, lots of other products you are then buying
might also be under the same good ethical standard, but the opposite
may be the case. What is your thought on how to help consumer
power make the right decisions?
Mr Gidney: It is all about transparency
and accountability. The Government does have a role in empowering
the consumers to ask the right questions of businesses. Traidcraft,
as a social enterprise, is a mission-driven business, a pioneer
of social accounting. We publish on our website not only details
certainly of our economic performance but also our environmental
and social impact. You can drill down through our website and
find out what our suppliers, producers and staff think of us as
a retailer. It is pretty warts and all and it can make quite challenging
reading for the Traidcraft's board of directors, who each year
must assess the journey to improve, "Okay, this aspect was
good this year, but these indicators were not so good so next
year we are going prioritise achievement in these areas".
That is not to say that everybody should be a mission-driven fair
trade business, but every company should be accountable for its
social and environment footprint as well as its economic performance.
There are recent moves, as I am sure you know, through the Companies
Bill to start the process of encouraging company directors to
take on board more than just their economic performance. That
is an important step but, of course, companies can ensure that
facts are presented in a certain way. The more we can encourage
consumers to understand they can ask questions about transparency
and accountability the better we will be at seeing through corporate
"spin". The Fairtrade certification mark is extremely
important in bringing companies which have no specialism in this
area at all into the game, but, as Bert Schouwenburg was saying,
it is a journey. None of us is satisfied with where we have got
to, we all want to see more and more progress. It does not mean
that we are unhappy with what has been achieved so far—I
think the growth has been phenomenal—but there is much more
to be done, because there are not nearly enough Fairtrade products
yet.
Mr Chandler: If I could add to
that. I think the fair trade label is the best, simplest form
of consumer communication on this, and you cannot expect the average
consumer to delve into websites, particularly going along the
shelves, and the fair trade mark has been very successful in being
a very clear, simple badge. What we need to do is make sure that
the Fairtrade Foundation is resourced and empowered to really
make that mark work but also we do need more consumer awareness
education programmes to help consumers really understand what
it stands for. There are very simplistic, understandable assumptions
that fair trade is all about the fair price, actually if you talk
to our producers, the fair price is certainly very important but
there is a whole range of other benefits of engaging in fair trade
which are of equal or even, in some cases, greater importance
to them. Sometimes that distinction gets lost. When I have heard
suggestions about putting labelling on products to say, "This
is the percentage of the product that will go to a producer"
or whatever, I think there are very significant, practical difficulties
in that, particularly as packaging does not change very often.
Q284 Ann McKechin: This is the Food
Standards Agency's fight with the supermarkets at the moment because
I think they reckon that consumers take three seconds to make
their choice as it comes off the shelf.
Mr Chandler: We need to make sure
the Fairtrade mark is well understood, that people really understand
what it stands for. I would like to think that consumers could
also begin to recognise some of the brands as well as the Fairtrade
label, because we believe Traidcraft goes several extra miles
beyond the excellent standards of the Fairtrade mark and there
are other things we do that you would not expect Tesco's or even
Marks & Spencer to be doing in their fair trade activities.
We have got to build our brands, we need the Fairtrade mark to
be properly understood so they are not misled and I think there
is a danger, the consumers think the whole Fairtrade premium is
going straight into the producer's pocket, and we know that is
not the case, then we have got an issue. I think it is very important
this is addressed, but we need resources to make this communication
happen. Again that is an area in which DFID's Development Awareness
Fund could be used for in part.
John Battle: There are some suggestions
there that will help to firm up our report on how we look at presenting
a summary of the issues. You were last but not least this morning.
Could I thank you for your contribution to our deliberations and
just say that some of the issues that were entered into here wrap
us into the World Trade Organisation as well, about which we have
previously done a report. I am sure we will be returning to those
as well, so the inter-meshing of the issues works fine as well.
We may see each other again. Thank you to everyone.
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