Posted: 23 Sep 2018 01:45 PM PDT
A personal response by Ruth Murray
Traidcraft, the pioneering Fairtrade brand that brought us ‘campaign coffee’ and went on to develop huge range of Fairtrade products, has announced that it proposes to cease trading at the end of the year unless a solution can be found.www.jointpublicissues.org.uk/wp-content/uploads/2018/09/traidcraft-corporate-logo-sml-768×258.jpg 768w, www.jointpublicissues.org.uk/wp-content/uploads/2018/09/traidcraft-corporate-logo-sml.jpg 800w” sizes=”(max-width: 300px) 100vw, 300px” />
Along with many others I was deeply saddened, but sadly not that surprised. Two years ago my own fair trade cotton fabric business was in exactly the same situation and I had to close it.
So why is the current environment so toxic for ethical traders?
Ethical businesses, and fair trade ones in particular, are motivated by growing their businesses to have the maximum possible impact. They want to keep the price they sell at as low as possible so that their wares are as accessible for as many people as possible. They need to cover their costs and pay the wages, but they aren’t trying to maximise profit for its own sake. It’s all about selling as much as possible so they can place more orders and support more people. Traidcraft, and my business, were structured to achieve exactly that.
The cost prices are of course higher than for other sellers. That’s the whole point of fair trade – to make sure that the people you are buying from receive a fair price plus a premium to improve life in that community. And the purchase will usually take place in a currency that is secure for the producer. A fair trade business doesn’t want the producer to take on the risk of currency fluctuation. That wouldn’t be fair.
In addition, fair trade businesses try to provide contracts that cover a long period, giving income security to the partners they work with. They leave themselves little wriggle room.
But a fair trade business model has become increasingly untenable. After the Brexit referendum there was an immediate change in the value of the pound. I had ordered fabric in May that was delivered in July. When I came to pay for it, the cost had increased by an unsustainable 15% solely due to the currency fluctuation. I couldn’t see how this situation would change and, in the spirit of behaving fairly, I gave notice to my suppliers, and set about selling through the remaining stocks and paying all my bills to make sure that no-one was left out of pocket.
I was miserable. My business had been a completely viable going concern pouring thousands of pounds into disadvantaged communities in India, and yet it all came to an end so quickly.
The same drivers are at play with the Traidcraft scenario, and they must be miserable too. Collaborative and powerful relationships developed over decades with talented and now thriving communities are at risk of coming to an abrupt end and it all feels so unnecessary.
So what can we do?
For those of us committed to thoughtful consumption, the options are narrowing. Many of the foods, textiles and homewares we buy originate in communities that are often exploited. I am mourning that we now have fewer routes to use our pounds to create a change. We must speak up while we have the chance.
Ruth Murray is a Methodist and formerly ran Fair Trade Fabric.
The post Why fair trade is in difficulty, and what we need to do appeared first on Joint Public Issues Team.
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