What is Fair trade sugar?

Fair trade has risen to become one of the most respected certifications of fair and ethical food production in the world. But what does it mean for sugar?

Fair trade is an agreement between institutions designed to help producers achieve better prices for what they grow and as a result improved living conditions. Its focus is on products or commodities that have a history of being imported from developing to developed countries, such as a sugar, coffee and chocolate. Several national and international federations are tasked with promoting and co-ordinating the work required to achieve the fair trade goal, the most well-known of which to UK consumer’s is The Fairtrade Foundation.

The Fairtrade Foundation seeks to enact the fair trade mission through several means. As well as lobbying governments and setting workers’ rights standards, the foundation also works directly with farmers, and, most visibly of all, certifies products and ingredients. The end result of this is a fairer world in which growers are paid a respectable wage for their role in producing our food.

These ambitions and measures are impacting growers across the globe. There are currently 1.66 million farmers and workers in 1,411 producer organisations spanning 73 countries, with this number and impact of the scheme growing all the time. Moreover, producers received €158.3 million in Fairtrade premiums in 2016.

Around 80% of the world’s sugar comes from sugar cane, with this being grown by millions of small-scale farmers and plantation works in primarily developing countries. In an industry as vast and complex as the global sugar trade, it is little surprise that these farmers have almost no influence on key trade decisions. What’s more, international trade laws have traditionally made it more difficult for these farmers to access the lucrative markets of Europe and North America, forcing them to compete with wealthier, more powerful countries without the resources to match.

As a result, small hold cane farmers often receive a price for their crop that fails to cover growing costs. The knock-on effect of this can be devastating for the entire community in which farmers live and work. Family members are frequently drawn into working on the cane farm, limiting their chances of receiving any form of education and perpetuating the cycle of poverty.

Causing further disruption to producers in the developing world is the EU’s 2017 decision to remove production quotas on sugar production. Previously, farmers in African, Caribbean and Pacific countries (ACP) sold cane to the EU market using production quotas and received payments artificially higher than the world market price for sugar. This preferential treatment has now ended, plunging growers into further uncertainty.

Although sugar is a vital crop to the economies of many developing countries, the benefits are rarely passed down the chain to small scale farmers. Focussing on these smallholder farmers, Fairtrade certification currently covers 54,000 people in 19 countries. Its main means of support is economic, offering a Fairtrade Premium of $60 per tonne of sugar on top of the negotiated price.

Such is the impact of the premium, it has resulted in farmers in Malawi having enough money to invest in equipment and means of operation that has increased productivity by 21%. Moreover, the premiums have also allowed local communities to build vital infrastructure like boreholes and primary schools, as well as contributing to the electrification of entire villages.

Initiatives like the Fairtrade premium also allow growers to stake a bigger claim in the sugar supply chain. For example, cane farmers in Maduvira co-operative in Paraguay were able to generate enough revenue to purchase their own sugar mill. In removing another step from the supply chain, they were able to access even more value than before.

Ragus supplies high-quality fair trade sugar for food and beverage applications. To learn more about our products, please contact our Customer Services Team. To see more sugar news and updates, continue browsing SUGARTALK and follow Ragus on LinkedIn.