Financial Times

Fair trade concept growing across the world

Consumers across the world are concerned over many issues before purchasing products and among them are the welfare of workers who produce these products, officials said on Tuesday.

Lalith Hettiarachchi, Chairman of the Sri Lanka Tea Board, speaking at the general assembly of the FLO (Fairtrade Organisation) Consultative Body (CB) in Sri Lanka in Colombo, said fair trade rests on issues like, are workers getting a decent wage and are they adequately looked after by their employers.
“The question often asked (by consumers) is whether paying a salary alone is good enough to a worker? Fair trade rests on that,” he said.

The FLO CB is part of a worldwide exercise which brings together all stakeholders in a range of products which after certification by the world-wide FLO body, is sold at a premium price which consumers are willing to pay. Part of the selling price (the premium) goes to the workers through a fund they, themselves administer for their welfare.

The Sri Lanka FLO CB which comprises all stakeholders – workers/producers/traders – was formed in 2001 and on Tuesday a new set of office bearers was elected. Tea is one of the main products in FLO certification and also includes cotton, spices, herbs and cut flowers.

Mr Hettiarachchi said 3.7 billion kg of tea is produced by 50 countries of which 1.5 billion is exported by the producers. “Between the producer and consumer, there is a large number of middlemen who get 4-5 times of what the producer gets,” he said.

He said Sri Lanka needs to increase the percentage of tea that is exported in non-bulk form (packs) to 65 % from a current 40 % and only then will workers get a better wage.

Dr Sarath Ranaweera, a pioneer in the manufacture and production of organic food and among the founders of the fair trade movement in Sri Lanka, said fair trade is an alternate approach to conventional international trade. “The fair trade market is growing and growing; it is getting bigger and bigger and in Europe consumption of these niche products has been unaffected by the economic recession.”

He said the premium that consumers pay for a fair trade labelled product is used to improve the socio economic conditions of workers. Ms. Sivapakiam, a worker from Stockholm estate in Hatton and a representative of the FLO CB, spoke on how the premium has helped to improve conditions of the workers.

“We have started loan schemes, purchased an ambulance for estate, provide electricity to households helping children to study,” she said.

S. Wijesinghe, a small farmer producing organic tea from Kandy, said their welfare society last year got over Rs 13 million from the premium which has been used to improve conditions for workers in education, health, etc.

Rangit C. Gunasekera, founder chairman of FLO CB, explained how it all began in Nuwara Eliya in 2001 and that the Sri Lanka FLO CB gradually became a pilot model not only for Asia but the entire world.

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