Malawi reaps huge return from Fairtrade
Malawi’s producers and processors willing to enter the Fairtrade market should not only look at the prevailing entry requirements, but the huge return on investment, says the Malawi Fairtrade Network (MFTN).
Fairtrade helps producers in developing countries such as Malawi to make better trading conditions and promote sustainability. The movement entails payment of a higher price to exporters (premium) focusing on exports from developing countries to developed countries.
In Malawi, Fairtrade has enabled producers to access international markets. Since its introduction in 2004, it has supported over 12 400 smallholder farmers by facilitating entry into the global market of Fairtrade products namely tea, sugar, groundnuts, macadamia, coffee and honey.
MFTN chairperson, Doreen Chanje, said this week that the Fairtrade market has standards that have to be met by producers such as adhering to democratic and transparent governance and decision making at organisational level, social and community development, labour rights and environmental stewardship.
“This [the access to Fairtrade market] is an investment. There is need to decide whether they [producers] are willing to invest to access the market. There is no need to blame the system to have created barriers to investment,” she said.
Chanje, who heads the umbrella body for country’s 14 Fairtrade certified producers and processors said Fairtrade market has its own rules of engagement and includes costs before the producer enters the market. They include a non-refundable application fee of € 525 (K264 075) and auditors’ fee of not less than €2 000 (K1 million).
“This is a business and they [the producers] want to access a special market,” she said.
On Tuesday, National Smallholder Farmers Association of Malawi (Nasfam), whose affiliate—Mchinji Association of Smallholder Farmers (Masfa)—is Fairtrade certified, said most farmers fail to meet Fairtrade requirements despite numerous efforts to improve the practice.
Nasfam chief executive officer Dyborn Chibonga said of the 45 Nasfam affiliated associations, only a few are Fairtrade certified, faulting this scenario on the comprehensiveness, high cost and demanding process for the associations to comply with the set international standards.
But Chanje argued that Fairtrade access requirements are not stringent in any way, but rather it is about standards producers have to comply with by being in an organised group which is legally and democratically constituted with accounts that are audited, have internationally accepted equipment and are environmentally friendly.
“If a producer is not doing these things, they will not be given a certificate. Fairtrade wants to promote democratic institutions,” said Chanje.
The country’s Fairtrade producers are; Afri-Nut Company Limited, Eastern Outgrowers Trust, FoodSec Consulting, Kasinthula Cane Growers Association (KCGA), Kawalazi Estate Company Limited, Masfa, Msuwadzi Tea Association, Mzuzu Coffee Planters Cooperative Union, Illovo Sugar (Malawi) Limited, Satemwa Tea Estates Limited, Sukambizi Association Trust/Lujeri Tea Estate, Smallholder Tea Growers Trust and new entrants Smallholder Tea Company (Steco) and Makande Tea Estate.
Available data indicates that since joining Fairtrade, 25 percent of the annual national sugar production is produced from sugar cane that is grown by smallholder farmers belonging to KCGA. Similarly, nine percent of the annual 46 000 tonnes of export tea is sold into the Fairtrade market.
Farmers engaged in Fairtrade have not only increased their market share, but have also received support in dealing with unexpected challenges.
According to MFTN, apart from market access and growth, Fairtrade helps to address food insecurity in Malawi.
Mike Gidney, executive director of the Fairtrade Foundation, said the movement has brought benefits to more than 1.25 million producers in over 60 developing countries.
