Fair Trade and development: lessons for future policies

What is called Fair Trade (FT) has two main objectives. First, Fair Trade Organizations (FTOs) develop alternative marketing chains that aim to improve the well-being of small producers in poor countries by offering them better trading conditions than through conventional systems. Second, FTOs, among others, also carry out advocacy campaigns for changes in the rules and practices of conventional international trade. Over the last three decades, the management and organization of FT marketing chains have grown and become prominent. In practice, FTOs have gradually adopted objectives and means similar to those of donors and thus seek to promote the development of the poorest people in the world by providing them with means to improve their livelihoods.

The role for FT in development is recognized by most European donors and governments. In 2006, the European Parliament adopted a resolution recognizing FT as “a major instrument for achieving the Millennium Development Goals”. In France, the Ministry of Foreign Affairs has financed FTOs from 2003 to 2007 via a Priority Solidarity Fund, which allowed to support various actors in the North, especially in their promotion of FT, and to develop FT chains in the South. After its completion in 2007, support to FT was transferred to the Agence Française de Développement (AFD), which continues to support actors in the North (by signing a partnership agreement with the French Platform for FT), and the development of FT projects in the South.

Despite these activities, the legitimacy, amount, and modalities of the support given by Official Development Aid (ODA) to FT are much debated. Most impact evaluations show that FT contributes to development, and should thus be considered as an instrument of ODA, while others underline that cost-benefit analyses of FT are negative, and that it would be more efficient to use FT channels to transfer consumers’ willingness to pay for FT directly to producers. More nuanced points of view acknowledge the difficulties of FT, but attribute them to the lack of market access that could be alleviated by ODA support to promotion and communication activities in the North. Finally, some observers emphasize that other socially responsible or quality-labels are more likely to improve producers’ livelihoods, and suggest that FT should be redesigned to become a more effective aid-for-trade instrument to help producers, for example in their quest for quality upgrading.

Based on the latest research results and with the participation of FT practitioners, this conference organized by Ferdi in partnership with the French Fair Trade Platform and FairNESS aims to identify the best options for the future of FT as a development tool. The conference is part of the Fair Trade Weeks (from 12 to 17 May 2012), and will mark the official launch of the Dictionary of Fair Trade of FairNESS France, the French network of researchers on Fair and Alternative Trade.