Case study: Fairtrade International

 fti logo

How we helped Fairtrade International to assess small-scale farmer income, with insight into global distribution and profitability

Client:

Fairtrade international is an NGO, multi-stakeholder association including three producer networks and 25 local Fairtrade organizations Fairtrade has set out a 2016-2020 strategy that will ensure small-scale farmers earn a living income that provide them with a sustainable livelihood. Acting as authorities in their sectors they can develop priority areas for impact improvement. As brand influencers, they communicate the value of externalities to stakeholders and at retail and consumer level.

 

Project Description:

We employed our expertise and knowledge of producer income calculation models to create an authoritative and global scope. Studying data from seven coffee producing countries: Rwanda, Tanzania, Uganda, Kenya, India, Indonesia and Vietnam, we covered 465 individual farms. The analysis included insights in the distribution of farmer household income, the profitability of coffee and the value added (profit + labour costs) per FTE.

We demonstrated that the extent to which Fairtrade coffee farmers are reliant on income from coffee production varies considerably between countries. For example, farmers in Indonesia rely heavily on coffee production whilst Kenyan farmers rely mainly on other sources of income.

In the infographic below True Price presents the distribution of farmer income over various sources. The disparity across producing countries is also evidenced.

 

FTIcoffeefigure9

Next steps:

Our study will enable Fairtrade to improve their strategy and program development. It will give them authority to scale up the Fairtrade Minimum Price method to make it a permanent tool that gives the farmers security for their incomes. Additionally, it is platform for Fairtrade to shape international debate on several subjects including farm management practice and living wage for small-scale farmers.

 

Also check out these other True Price Research cases: