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Do fair trade partnerships work?

How effective are partnerships between fair trade organisations and producers? Do both sides have the same expectations of and priorities for these partnerships? Research by the University of Bradford reviews how fair trade, as practiced by alternative trading organisations (ATOs), evolved during the 1990s from a solidarity to a partnership model. A case study approach explores how effectively one such partnership is working, and highlights the factors required for partnership to succeed.

The research examines a partnership between Cafédirect (a UK based ATO and represented in this example by Twin Trading) and one of its suppliers, KNCU - a coffee marketing cooperative in northern Tanzania. The partnership is based on both a direct trading agreement and an export trade development programme. Certain conditions are essential such as mutual commitment and understanding, shared objectives, autonomy and, crucially, participation by the producer partner in planning and setting objectives.

Both partners shared the goal of benefiting small-scale farmers but viewed the partnership differently. For Twin Trading it was a learning process, using fair trade markets to develop the capacity of small-scale producers to enable them to compete eventually in commercial markets. For KNCU, fair trade provided a potential market, rather than a learning process.

What did success mean to each partner? For KNCU success equaled profit (for eventual distribution to members); for Twin success meant whether or not KNCU developed its exports and commercial contacts. After 4 years, KNCU’s exports still depended on fair trade whilst few in-roads had been made into commercial markets: the partnership did not reach its full potential.

Research findings suggest that:

KNCU did not participate fully in contributing to the ATO’s strategy or in developing its own export capacity.
Decision making procedures were weak and communication difficult.
Providing support and training for cooperatives in financial literacy, economic efficiency and organisational development may have been more effective than encouraging export development.
Cooperative and marketing systems in Tanzania were undergoing considerable upheaval which put external pressures on the partnership.

Key policy implications include:

Producer groups and ATOs need to share responsibility for setting terms of trading relationships and deciding strategy.
Strong commitment by producers to developmental as well as market dimensions of partnerships.
Clearer definition of reciprocal and participatory nature of fair trade partnerships so that ATOs are real partners rather than resources to be tapped

Source(s):
‘Partnerships in fair trade: reflections from a case study of Cafedirect’, Development in Practice, Volume 10/2, Oxfam GB (May 2000)

Funded by: University of Bradford Research Studentship, the Co-operative Wholesale Society, the Gilchrist Trust, Frays Charitable Trust and St James University Hospital Trust Staff Fund

id21 Research Highlight: 13 February 2001

Further Information:
Anne Tallontire
Social and Economic Development Department
Natural Resources Institute
Chatham Maritime
Kent ME4 4TB
UK

Fax: +44 (0)1634 883865
Contact the contributor: A.M.Tallontire@greenwich.ac.uk

Natural Resources Institute, University of Greenwich, UK

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