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3ie-LIDC Seminar Series: Fairtrade certification does not improve welfare of agricultural workers

Wednesday, January 22, 2014 - 17:30 to 19:00

The January seminar in the 3ie-LIDC Series 'What works in international development' featured a presentation by Prof. Christopher Cramer and Dr. Deborah Johnston from the Departments of Development Studies and Economics at SOAS, University of London: ' Making Sense of Differences in Working Conditions: an investigation into the impact of Fairtrade in Ethiopia and Uganda'.

Proliferation of Fairtrade certification schemes

Recent years have seen a proliferation of Fairtrade certification schemes and now very large numbers of people are working on certified farms either as producers or workers. The theory of change behind Fairtrade certification schemes is that Fairtrade contributes to development through creating better trading conditions and improving the situation of small producers and workers. However, very little is known about the impact of such schemes especially on wage workers. This is true for both ‘hired labour situations’ (such as plantations) and in so-called smallholder producer organisations. Different standards apply for each situation; a division based on the assumption that there is minimal wage employment by smallholders.

SOAS research seeks to measure effect of Fairtrade on workers' lives

SOAS researchers have been engaged in a four-year research project in Uganda and Ethiopia, funded by the UK Department for International Development (DFID). The research involved collecting evidence from areas producing agricultural exports (coffee, tea and flowers) on how different rural labour markets affect poor people’s lives. More than 1,000 fieldwork-days generated a large volume of evidence – through different survey instruments, focus groups, life’s work interviews, and other qualitative research.

Photo: Coffee drying in Ethiopia, http://ftepr.org/photos


Low-paid wage employment prevails in agriculture - and Fairtrade does not help

The first finding of the study is that wage employment is far more prevalent in smallholder agriculture than commonly acknowledged. Additionally, agricultural wage workers were found to be extremely poor, with low education levels and asset ownership, in particular among women.

Second, the study found no evidence that Fairtrade improves conditions for wage workers – either in hired labour situations or in small producer organisations. In Ethiopia flower and coffee workers on Fairtrade certified production sites were paid significantly less than in areas without this certification. In Uganda tea and coffee workers received less or not more in the areas with Fairtrade certified producer organisations than where there was no such certification. In both countries jobs on non-certified sites also lasted longer than on Fairtrade ones. Non-wage benefits, such as free meals, medical care, paid overtime, were also less favourable to the workers on certified plantations. Abuse and labour malpractices were no less common experiences among workers for Fairtrade certified producers and processors than for others in the research samples and indeed some health and safety practices were evidently worse.

Econometric analysis – regression analysis and propensity score matching - confirmed these results while controlling for factors such as scale (workers tend to be paid more on large sites), gender (women generally earn less than men), and education (less educated workers tend to get lower wages).

The discussion that followed focused on methodological issues as well as likely explanations of the findings.

Download the powerpoint presentation
Read the blog post 'Should I bother paying more for a packet of fairtrade coffee?'
This seminar is part of the 3ie-LIDC Seminar Series 'What works in international development'.