Fair trade movement gathers strength: the fair trade movement, which seeks to provide actual producers and growers with a better slice of the returns from their labour, is expanding rapidly and Africa appears poised to benefit from this ethical stance. Neil Ford reports.

While international efforts to improve the terms of trade for African exporters have had some success over the past two years, they have broadly been rebuffed by determined resistance from established producers. In the agricultural sector in particular, Japan, the US and the EU seem determined to protect their own farmers from genuine competition.

Nevertheless, the international co-ordination of fair trade regimes has improved in recent years as national fair trade organisations have harmonised their standards through the Fairtrade Labelling Organisations International (FLO).

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The fair trade movement has a relatively simple aim: that a fair proportion of the retail price of any given product or service is returned to the person whose labour has created the commodity in the first place. However, how this can be achieved varies a great deal from sector to sector.

In East Africa, most tea and flowers are grown on large estates that are owned by foreign companies. The key relationship here from the fair trade point of view is that between the employer and the worker, in order to ensure decent wages and working conditions for the employees.

However, most West African cocoa and Eastern African coffee is grown by small-scale farmers who plant and harvest crops on their own land. In this case, the most important relationships are those between the farmer and his marketing board and between the boards and the foreign importer. With small-scale farmers it is most important that they receive a fair price for their labour.

Fair trade products are mainly marketed in the UK, the rest of Western Europe and North America. They are usually significantly more expensive than their mainstream competitors but the difference in price is not commensurate with the extra money paid to workers. As with more healthy alternatives to processed foods, wholesalers, supermarkets and other retailers are able to increase their profit margins on fair trade goods.

It is only when fair trade products become more mainstream that the price differential seems to disappear. For example, Co-operative Stores of the UK decided to only use fair trade cocoa in its own brand cocoa in 2002. It was slightly more expensive than other options but the company says that it absorbed some of the higher costs of fair trade in its profit margin and has been rewarded with much higher sales.

Fair trade sales on the rise

Global sales of fair trade goods are certainly increasing. According to the latest figures from FLO, worldwide sales of fair trade goods increased by more than a third in 2005 to reach $1.38bn for the year. Although this may appear a fairly small figure in comparison with the value of all global trade, the pace of growth is certainly impressive and the decision by some mainstream companies to now use fair trade goods as their own brand products indicates that sales will continue to rise rapidly.

British retail firm Marks and Spencer provides a good example of this trend. It launched a range of clothing using fair trade cotton last year. This process, in turn, is persuading more companies to support the FLO. A spokesperson for the organisation commented: "Increasingly, companies are knocking on the door of the labelling organisations because they want to have the certification mark on their products."

Fair trade is often solely associated with the sale of goods rather than services. Indeed, in the minds of most consumers, it has generally been connected with the sale of products based on commodities, such as coffee, tea and cocoa. Over the past few years, however, there has been much more interest in manufactured goods, such as clothing. In addition, as the case of Fair Trade Tourism South Africa demonstrates below, fair trade in services is also becoming increasingly important.

Given the growth of eco-tourism over the past decade in many parts of Africa, it is perhaps not surprising that fair trade is also making its presence felt in the tourist sector. In response to the fact that many hotels and other tourist services in Tanzania were owned and managed by foreign companies, a number of eco-tourist organisations have been set up in that country to encourage visitors to use smaller guest houses. Tourists have also been encouraged to stay with local families in their own homes.

Such eco-tourist schemes help to spread both the benefits and the negative impact of tourism, and by encouraging greater interaction with local people they are often a form of fair trade.

Trade in commodities such as coffee, tea and cocoa are likely to remain the primary concern of the fair trade movement for the foreseeable future. Yet as ethical concerns, particularly in investment, come increasingly to the fore, it is likely that fair trade will begin to spread out into other parts of the African economy.

RELATED ARTICLE: South African tourism

Benefits to be spread further

Fair Trade Tourism South Africa has been set up "to promote the concept and principles of fair trade in the South African tourism industry so that communities and workers benefit and in turn the industry is more sustainable". The group has used a grant of [pounds sterling]300,000 ($600,000) from the UK government's Department for International Development (DfID), under its Business Linkages Challenge Fund, to set up a trademark scheme to recognise "fair and responsible tourism practice".

Only tourism businesses that adhere to criteria such as fair wages and working conditions, fairness in operations, purchasing and distribution of benefits, ethical business practice and respect for human rights, culture and environment, qualify for the trademark.

Qualifying companies are able to use the trademark in their marketing. The project forms part of DfID's overall regional plan for Southern Africa, which is backed by funding of [pounds sterling]20m ($40m).