Fair trade experimentalism: the potential of Sainsbury’s new pilot scheme
A recent decision by Sainsbury’s to switch some of their Fairtrade certified teas to their own “Fairly Traded” tea label has sparked backlash from customers concerned about what this new certification entails. A part of the Sainsbury’s Foundation, this new pilot programme will test an alternative method of supporting their tea producers. Sainsbury’s defends their transition from the Fairtrade Foundation certification to their own version as a response to changing conditions for farmers (e.g. climate change) that require more support and new methods of assistance. Sainsbury’s description of this pilot scheme claims it will “build on the Fairtrade model”, continuing to guarantee minimum prices and social premiums to their tea producers. However, there will be an increase in their overall sustainability standards. The company plans to further help farmers by providing them with “advanced information” and “specialist support”.
However, this change by the company was not viewed as favorable by many, including the Fairtrade Foundation, Sainsbury’s tea producers, and some Sainsbury’s consumers.
For the aforementioned external stakeholders, the proposed switch to “Fairly Traded” is worrisome as it utilizes a new, untested method of fair trade, which could potentially reduce the benefits received by these tea farmers in under developed countries. This system moves to internal accreditation and seems to shift empowerment away from the farmers themselves, putting more monetary decision making for the use of social premiums in the hands of the Sainsbury’s Foundation. Despite these criticisms, Sainsbury’s continues to promote the pilot programme as an improvement for their producers and not as a measure for the company to cut costs at the expense of poor farmers. Fairtrade Foundation and other similar charities remain highly displeased with the change, believing it will lead to the implementation of a new system for other Sainsbury’s products and in other companies as well, threatening the growth of the fair trade.
But are all these negative sentiments by producers and consumers alike really warranted? Overall, the Fairtrade Foundation is still relatively new, emerging in the past 25 years or so. Though it is one of the largest and most recognizable charities for fair trade in the UK, its system still has several flaws. Contrary to criticisms, Sainsbury’s Foundation’s pilot program presents the opportunity to examine if there are additional approaches that can be more effective. A central part of Sainsbury’s argument for the switch is that farmers need more advanced informational support to help respond to social and environmental changes, particularly climate change. Sainsbury’s reports that producers of tea are already experiencing negative impacts on their crops due to the unpredictable weather patterns associated with global climate change. That being said, it will become more necessary for these producers to have adequate knowledge, resources, and technology available to respond to changes in their ability to produce crops. Ultimately, for low-income countries with agricultural based economies to be able to experience economic growth and development, there need to be industrial developments outside of the agricultural sector, which will allow their economies to become more stable and incorporated into the global market.
Though fair trade is a concept that certainly offers short-term benefits to the producers involved, it is unlikely that the current certification system will be sustainable in the long run. Fairtrade guarantees a minimum price for goods, providing stability for farmers as they will receive a constant price even if market price falls. However, the system does not offer a guaranteed quantity purchased, meaning a fall in demand could lead to surpluses and a net loss for producers who are not able to sell them. This also means that other producers, who are potentially less well off, could be squeezed out of the market. Moreover, the short-term benefits experienced by some producers have the potential to be lost in the future with changing market conditions. Fairtrade Foundation reports that their certified producers rely greatly on social premiums for development. This reliance likely will keep low-income countries highly dependent on agriculture, whereas the opportunity to be educated on and provided with methods to increase efficiency in the agriculture industry will allow resources to be allocated to other industries. Though these premiums are beneficial to quality of life presently, long-term development of the economies in these countries could benefit from these informational advances proposed by Sainsbury’s by paving the way for transition from a primary product, agricultural based economy into a more complex one.
This proposed change is only a pilot programme, intended to test the effectiveness of this system in increasing benefits to producers. Sainsbury’s will continue to be one of Fairtrade Foundations largest retailers. Fairtrade Foundation, among other charities, have made great strides in improving economic conditions and quality of life for the producers it works with. However, there is always room for improvement, and Sainsbury’s efforts to test new models could represent a shift towards initiatives and programmes that will not only be effective in supporting producers of underdeveloped countries in the short-term, but also in their long-term economic development.