How impactful is Fair Trade? A paradigm shift in reporting would tell a better story

• DOI: https://doi.org/10.13169/jfairtrade.1.2.0040
• Pages: 40-48
• Published date: 01 October 2019
• Date: 01 October 2019
• Author: Fredrik Galtung
• Subject Matter: agribusiness,ethical sourcing,Fair Trade,responsible sourcing,metrics,measurement,outputs,outcomes,impact,sustainability,sustainable development goals (SDGs),greenwashing,fairwashing

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How impactful is Fair Trade? A paradigm shift in

reporting would tell a better story

Fredrik Galtung

Fredrik Galtung is co-founder of TrueFootprint, a Cambridge-based start-up that delivers real-time,

verifiable impact data. In his earlier work he was the first employee and head of research of Transparency

International, where he spent a decade overseeing and developing the organisation’s corruption

indices. He then founded Integrity Action in London to help communities monitor and fix thousands of

projects and services in a dozen countries in Africa, Asia, Europe and the Middle East. TrueFootprint was

launched in 2018.

Abstract

There is an extensive literature on the impact of Fair Trade. While much of the evidence is

positive, there are also studies that find negligible, neutral or even negative effects. In this

article, I propose that a paradigm shift towards systematic and regular outcome and impact

reporting by Fair Trade organisations is both possible and urgently needed. This shift will

align financial and non-financial reporting and help to ensure that Fair Trade is delivering on

its core objectives, which include better prices for smallholder producers, improved working

conditions and local sustainability. I provide evidence that at least some of the mainstream

agribusiness sector is moving towards outcome reporting in some dimensions of their

operations. Fairtrade and other certifiers for responsible sourcing only do marginally better

than agribusiness in their current reporting in terms of outcome and impact reporting. A new

paradigm in systematic and real-time outcome reporting is possible. To achieve this, data

production must be bottom-up, rather than top-down. Smallholders and producers have to

become owners of the positive outcomes they are seeking to achieve.

Keywords: agribusiness; ethical sourcing; Fair Trade; responsible sourcing; metrics;

measurement; outputs; outcomes; impact; sustainability; sustainable development goals

(SDGs); greenwashing; fairwashing

Introduction

Sales of certified Fair Trade products are growing as a result of partnerships with major brands and distribution

through big retailers. New products – including unexpected ones like gold – are added to the Fair Trade range at

a rapid pace, and the number of hectares under Fair Trade cultivation as well as the number of countries and

producer organisations keeps increasing.1 The growth of Fair Trade has been cited by a number of authors in the

Fair Trade literature as evidence of its success. Fair Trade in Europe is characterised as “relatively successful”,

since it has “grown into a global market worth €2 billion a year, with an increase of between 15% and 20% over

the last decade”.2 Another article mentions that growth in retailer interest “has been hugely beneficial to the Fair

Trade movement’s sales and public awareness”.3 But growth is only one indicator of success.

1 The annual reports of the Fairtrade Foundation (UK) and snapshots like the one provided on their website provide an overview: http://www.fairtrade.org.

uk/What-is-Fairtrade/Facts-and-Figures [accessed on 28th May 2019]

2 Pérez Ruiz and García de los Salmones (2018).

3 Doherty, Davies and Tranchell (2013).