Natural-Habitats
organic products grown in a sustainable habitat

Fair Trade Explained

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29 June 2015

farmers, social reponsibility, environment

Fair Trade Explained

Today, we are surrounded by numerous certifications on the products we buy at supermarkets. It is getting more and more confusing to figure out what exactly most of them stand for. Some labels are self-explanatory and some are not. Fair for Life Social and FairTrade certification belongs to the second category. Therefore, most of the consumers do not even realize that while they purchase Fair for Life or FairTrade certified products they contribute to the empowerment of poor around the world. The labeling initiative is aimed at improving the lives of disadvantaged farmers in the developing countries. For achieving this ambitious goal, many effective mechanisms have been developed:

1) Price floor. The key characteristic of FairTrade is the minimum price that Fair Trade buyer agrees to pay certified farmers when the market price is too low. In this case, producers can always cover the average costs of sustainable production, including their own work. The Floor Price is intended to reduce the risk faced by growers due to fluctuating market prices. However, when the market price is higher than the FairTrade minimum, the buyer must pay the market price

2) Fair Trade premium. Another important feature is a price premium, often referred as the community development or social premium. It is a sum of money paid in addition to the sales price for the investment in social, environmental or economic development projects. The premium should be fair to both sides and is paid into a separate fair trade fund. The details of how the premium is to be used have to be decided democratically by the farmers themselves.

3) Stability and access to credit. The FairTrade buyers should settle for long-term contracts and offer advance crop financing to producer groups (up to 60 per cent) if requested.

4) Working conditions. Workers must have freedom of association, safe working conditions, and wages at least equal to the legal minimum or regional averages. Most forms of child labour are prohibited.

5) Institutional structure. Farmers are fostered to organize as associations or cooperatives, where decisions are reached in a democratic manner and with a transparent administration that can facilitate sales and administer the premium paid.

6) Environmental protection. A variety of harmful chemicals is forbidden for FairTrade production. The criteria are meant to ensure that the members work towards sustainable environmental practices. Farmers must provide basic environmental reports showing their impacts on the environment. The production of genetically modified crops by farmers is prohibited.

Whether these mechanisms work and Fair Trade makes “economic sense” have been intensely debated in academic as well as policy circles. According to Journal of Economic Perspectives , “the existing empirical evidence, suggests that Fair Trade does achieve many of its intended goals. Fair Trade farmers do on average receive higher prices, have greater access to credit, perceive their economic environment as being more stable, and are more likely to engage in environmentally friendly farming practices.” For instance, a study of 845 coffee farmers from southern Mexico during the 2004–2005 season, suggests that farmers who were Fair Trade and Organic certified on average obtained 12 cents more per pound of coffee sold. These positive results can be explained by the willingness of many consumers to pay a premium for goods produced in a socially and environmentally responsible manner.

In July 2013, Exportsustent, our export company in Ecuador, was certified with Fair For Life Social and FairTrade. Other operational sites in Sierra Leone are preparing to undergo the certification process. For us, sustainability is a combination of organic and fair trade, which is achieved by ensuring fair and equal opportunities to all the farmers while working in harmony with the environment. The operations of Natural Habitats in Ecuador and Sierra Leone are settled in areas where no critically endangered species have been identified; furthermore, the group invests in several programs to enhance biodiversity, and to protect the environment while training and empowering small farm holders.

 

Blog & News

Palm Oil Is Everywhere

Palm oil (Elaeis guineensis) originates from West Africa. Once planted, after 3-4 years’ palm oil trees start to producing its first fruits and will continue all year-round for up to 30 years. Oil Palm is high yielding; it produces more oil per hectare than any other major oil seed crop.

Did you know that half of your items in your house contain palm oil?
Palm oil is also the most widely consumed vegetable oil on the planet

farmers, social reponsibility, environment, organic

Why Farm Organically?

With a growing population, nearly 10 billion people by 2050, and an increasing demand for food, agriculture is placed under extreme pressure. We heavily rely on services that the industry provides to us, such as food, clothes, wood, and many others. Unfortunately, with biodiversity losses and deforestation practices that accompany modern agriculture, these services are currently at risk. Therefore, we must take actions to sustain biodiversity, soils and forests for the generations to come

social reponsibility, environment, farmers, organic

An Important Role of Intercropping in Modern Agriculture

Population of our planet is constantly growing. The threat of insufficient food supply in the near future encourages intensification of the search for more productive agricultural technics. At Natural Habitats, we believe that well-planned intercropping is one of the most effective and sustainable ways to increase agricultural productivity.

Intercropping, as well as other forms of multiple cropping, is an ancient method of intensive agriculture that involves cultivation of two or more crops simultaneously on the same field

environment, farmers

Mainstream Sustainable Palm Oil Production in Ecuador

Deforestation caused by many palm-oil producers, harming wildlife habitats, has been a widespread concern around the world. However, more and more palm oil is now being sourced sustainably with a help of the certification initiative promoted by a non-profit association Roundtable on Sustainable Palm Oil (RSPO) that aims to transform markets to make sustainable palm oil the norm. Natural Habitats as 100% organic and sustainable producer was certified with RSPO standard in 2013.

In May 2013, Natural Habitats in Ecuador (Exportsustent) together with Solidaridad and National Association of Oil Palm Growers (ANCUPA) developed a pioneering project Mainstream Sustainable Palm Oil Production in Ecuador

farmers, environment, partnership, social reponsibility

An Ongoing Education of Farmers

Natural Habitats believes in doing business in harmony with the environment. This is the reason for us to continuously encourage smallholder farmers in Ecuador and Sierra Leone into getting involved in organic and sustainable production of palm oil.

On a regular basis, we educate and train our smallholder farmers in nature preservation and organic farming practices for not only their own good but for the betterment of the society

farmers, partnership, social reponsibility

Fair Trade Explained

Today, we are surrounded by numerous certifications on the products we buy at supermarkets. It is getting more and more confusing to figure out what exactly most of them stand for. Some labels are self-explanatory and some are not. Fair for Life Social and FairTrade certification belongs to the second category. Therefore, most of the consumers do not even realize that while they purchase Fair for Life or FairTrade certified products they contribute to the empowerment of poor around the world

farmers, social reponsibility, environment

Why Healthy Palm Oil is not an Oxymoron

When people hear about palm oil the first thing that usually comes to their mind is heart disease. The logic is pretty simple: fifty per cent of the oil consists of saturated fat that supposed to be bad for the heart, therefore, palm oil causes heart disease. However, numerous studies continue to confirm that palm oil does not promote heart problems and, if anything, it protects against them

cooking, health

Sustaining Food Security

Pressure on the world’s food supply is constantly increasing due to population growth, changing diets and government policies promoting biofuels. Current estimates suggest that by 2050 the food demand will be twice what it was in 2005. Biotech companies have strongly promoted the idea that genetically engineered (GE) crops are the key to “feeding the world”. According to Environmental Working Group , recent studies show that this promise has fallen flat

environment, farmers, social reponsibility