Fairtrade Fortnight kicks off today and this year we are being asked to organise a Fairtrade breakfast in support of the farmers who grow the food we have every morning, like coffee, tea, cocoa and bananas. Support for poor farmers is to be welcomed, but is Fairtrade getting it right asks Ralitza Dimova?
I believe that Fairtrade policy and related activism should promote a more comprehensive development agenda that takes into account the full range of crops produced by developing countries’ farmers and their effect on farmers’ incomes and food security.
At a broader level, one needs to answer the question of whether targeted support for a limited range of export sectors does not trap poor households and countries in narrow (typically tropical cash crop) production with potential negative implications for food security and overall development prospects.
Following numerous success stories in the now long history of pursuit of key Fairtrade tenets – empowerment, participation and justice – authors have compiled comprehensive literature reviews on the role of Fairtrade in alleviating poverty and ensuring social justice.
Such reviews (see for instance Nelson and Pound, 2009) have found overwhelming evidence in favour of the ability of Fairtrade to provide favourable economic opportunity for smallholder farming families, thus resulting in higher returns and more stable incomes for those involved.
Yet, there is no easy answer as to whether Fairtrade has resulted in either broader scale poverty alleviation or universal farmer empowerment, especially among female farmers. Indeed, there is evidence that ‘fair’ and stable prices – which are at the heart of Fairtrade policy making – lead to activity specialisation and reduced income diversification, thus potentially increasing household vulnerability to price shocks (Ruben, Fort and Zaniga, 2008).
Dramatic fluctuations of the prices of internationally traded food commodities in 2008 and 2011 brought to the fore the extreme vulnerability of households and countries that are net producers of cash crops (namely farmers, for whom the income generated from cash crop production exceeds the expenditures on cash crops) and are simultaneously net consumers of food crops (namely farmers, who spend more income on food consumption than the income generated from food production).
This vulnerability of cash crop producing households and countries that are dependent on (highly priced) imported food crops to isolated price and non-price factors is backed by my recent research undertaken in the Ivory Coast. Key results from my research and additional insights from stakeholders are presented in a 10-minute film on how food-cash crop competition impacts on a cash crop exporting, food crop importing less developed country.
Among the findings is the fact that producers of cash crops such as cocoa, rubber and palm oil in the Ivory Coast have long enjoyed support in the form of guaranteed prices and markets. While stabilising incomes, such interventions have led to competition for space among food and cash crops and enhanced vulnerability of food crop producers – particularly women – who are left to the vagaries of the market.
Targeted – mainly price related – interventions to the cash crop sector, in the absence of broader land tenure reforms, have not only enhanced food insecurity at the micro level, but have contributed to the enhanced food import dependency of a predominantly agricultural economy – in what is one the largest producers of cash crops in the world. Indeed, doubling of the prices of internationally traded commodities in 2008, led to violence in the streets of Abidjan, pushing the country down the route of yet another political crisis.
My research on the welfare implications of rising food prices in 2008, indicates that the positive price shock led to relocation of income from net food consumers to net producers of food both geographically (from the poorer cash crop producing South, to the food crop producing North of the country) and within the same geographical regions (from relatively better off urban dwellers to worse off rural dwellers) at that particular point in time (Dimova and Gbakou, 2013).
Yet, taking a longer term perspective, food security and sustainability continues to be threatened by food price fluctuations and competition for space between food and cash crops. The story of the Ivory Coast is not an isolated case, but rather a norm in the global south – particularly among sub-Saharan African, Latin American and Middle Eastern countries, specialising in commodity production and trade, but dependent on food imports and failing to enjoy massive industrialisation and movement up the value chain.
Whilst the support for poor farmers through initiatives like Fairtrade is welcome and important, such initiatives should be based on a thorough understanding of specific local conditions and trade-offs. Price interventions and other support for cash crop producing farmers – especially those who are marginalised – is likely to enhance their welfare, but it may restrict their choices and discriminate against food producers, thus enhancing food insecurity and vulnerability at both the household and country level.
When – as highlighted in my film – crop choice is largely driven by land tenure and social norms, Fairtrade type initiatives need to be complemented by understanding and policy initiatives in areas such as land reform. When food security is at stake, one would also need to understand and support reform of the global agricultural trade system. Despite significant progress – such as in the context of the Agreement on Agriculture of the WTO – food imports from developing to developed countries continue to be severely restricted, while tariff escalations are a constraint to developing countries getting any real competitive edge. (McCulloch, Winters and Cirera, 2002).
