• Objectives of fairtrade


    The Fairtrade initiative aims to enable organizations of smallholder producers of coffee (and cocoa, tea, honey, bananas, orange juice and sugar) to improve their conditions of trade, e.g. more equitable and more stable prices.  Currently, Fairtrade efforts in coffee and other products like cocoa, honey and rice are concentrated on smallholder producers only. Conversely, in products like tea, sugar, bananas and other fruits the emphasis is also on estates (improving conditions for the labour force).  Coffee prices are by nature unstable, especially since the disappearance of the old ICO price support agreements, and during the closing decades of the twentieth century extremely low, sub-economical coffee and cocoa prices caused serious economic and social problems. Many growers could not even recoup their production costs, let alone make a decent living.

    The Max Havelaar Foundation was established in the Netherlands in 1988, and since then another 18 countries have followed suit (see the list in 03.06.03). In 1997 the different national institutions established an umbrella organization known as the Fairtrade Labelling Organizations International (FLO) (see 03.06.04) with offices in Bonn, Germany. FLO, together with its member organizations, works towards improvement in the unequal distribution of wealth between North and South.

    The objective is to assist without patronizing anyone by providing the instruments necessary to enable small growers to take their development into their own hands, as independent producers and not as recipients of occasional gestures of largesse. This is achieved by incorporating in the producer price not only the cost of production but also the cost of providing basic necessities such as running water, health care and education, and the cost of environmentally friendly farming systems. Consumer support for more equitable North-South trading conditions is then linked to participating growers through the by now well-known Fairtrade labels on retail packaging in consuming countries. Simply put, the higher prices consumers pay for Fairtrade products reach the growers' organisation through a combination of guaranteed minimum prices and premiums.

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