A fair deal for producers and consumers alike

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A fair deal for producers and consumers alike
Fairtrade, a price guarantee scheme, helps farmers by paying them more than the market price,
Published: 24/07/2010 at 12:00 AM
Newspaper section: News

The Fairtrade programme, a price guarantee scheme in the farming sector, is doing its part to help disadvantaged farmers by ensuring a ready market and fair prices for products that offer better deals for producers and the environment.



Under the Germany-based Fairtrade movement, a minimum price is guaranteed to farmers in developing countries for each product that receives certification under the programme. Along with minimum prices, the programme also requires organic production techniques and that a premium be paid to producers by traders on top of the agreed price for community development and to ensure fair treatment of labour.

For farmers in rural Thailand, such as the Akha hilltribe people in a remote village in Doi Chaang in Chiang Rai, Fairtrade has transformed lives.

"Once these people had nothing to eat," Wicha Promgyong, chairman of the Doi Chaang Coffee Group said, referring to the Akha farmers who once had no option other than to sell their high quality coffee beans to international dealers at cut-price rates.

Seeing the farmers' plight, Mr Wicha set up a company to work with them and strived towards getting the company's coffee products Fairtrade certification by the Fairtrade labelling organisation's international body in Germany. "Our company buys coffee beans from farmers at the rate almost twice that set by the Fairtrade price," Mr Wicha said. "The profit goes back to their communities."

Now, rather than being merely lifted out of poverty, many families in the village are comparatively wealthy.

Since receiving Fairtrade certification, Doi Chaang Coffee's market share has grown and the company has secured market share in countries like Canada and Britain. Doi Chaang Coffee also sells its products locally, but it has not yet been allowed to use the Fairtrade mark here.

"Only a small percentage of our products are on sale here at our own stores and Villa supermarkets," he said. "We didn't try to break into the market here because we are not sure if Thai buyers care about it."

Witoon Panyakul of Green Net Cooperative has also received Fairtrade certification for his Jasmine rice and coconut products. He agrees that penetrating the local market is a challenge, but believes the key is to convince Thai consumers why these products should matter to them.

"We may need to first talk to them about the health benefits of organic products," he said.

Green Net exports the majority of its Fairtrade-certified products to Europe, while the rest, which Mr Witoon said are produced to the same standard, are sold locally without the Fairtrade designation.

Prices for products made to such higher standards are usually higher than those made by mainstream manufacturers because they reflect the real costs of production, he said.

"It is necessary for consumers to pay more if they think they want to tackle the problem of economic inequality in Thailand," he said.

"Market prices for farm products here are too low. The average farmers are getting poorer and poorer, and have no power to negotiate with mainstream traders," he said.

A recent study by three researchers from the University of Tuscia showed that Green Net farmers who had been granted Fairtrade or other organic certifications had attained better economic and living conditions than those without certification.

In 2008, researchers began interviewing 360 farmers in Yasothon's Kud Chun and Bak Reua districts.

On annual income, certified farmers earned more than those without certification, with the average of 60,942 baht against 41,646. The certified farmers also had more savings.

The study also noted that the Fairtrade designation meant more economically to farmers than just certification for organic quality.

Other Thai Fairtrade products include Lanna Coffee brand coffee beans, and handicrafts under the names of Thai Craft, Thai Tribal Craft and WEAVE.

Mr Witoon said that despite the fact that the Fairtrade designation cannot be used in Thailand, buyers here can support the movement by purchasing their products.

He also noted that the numerous trademarks used to designate organic products confuse buyers.

"There should be one local state body to certify organic products to make it easy for Thai shoppers," he said.