Fairtrade International unveils five step approach to deliver enhanced farmer Living Income
Fairtrade International has moved to deliver an enhanced system for farmers, including within cocoa communities that streamlines processes at origin in a bid to create living incomes, writes Neill Barston.
As the social justice movement noted, it has long sought to back smallholder agricultural workers through its established certification schemes.
But the organisation expressed considerable optimism on its latest initiative, the “Living Income Reference Price on demand,” or “LIRP on demand,” offering is an extension of its data-driven globally recognised model for developing a higher reference price for farmers that it has continued to work with.
Significantly, the organisation has devised a five-step approach to estimate precise Living Income Reference Price solutions. The approach includes a pre-assessment process, where Fairtrade identifies the product and origin specifications for which reference prices should be generated, as well as where all relevant inputs and work steps needed are mapped out along with the time necessary for each step.
The definition of the sustainable model, where the local context and product knowledge is used to contextualise the model to optimally reflect the reality that farmers are facing; data collection and analysis, where data is gathered through qualitative methods and then Fairtrade analyses the data to estimate key parameters of the pricing model and a first approximation of what a LIRP could look like; stakeholder validation, here the parameter values and the provisional reference price are presented to key stakeholders in a validation workshop; and finally the report stage, where Fairtrade creates a written report to explain model and parameter values, as well as the resulting reference price.
This approach was optimised through 27 case studies in 19 countries. The “LIRP on demand” can be completed between three and six months, with annual updates accounting for inflation over a four-year cycle.
“We believe that businesses must play a part in achieving sustainable livelihoods for farmers, and we see momentum in the market from leading retailers and brands,” said Carla Veldhuyzen van Zanten, Senior Advisor of Sustainable Livelihoods at Fairtrade International.
Fairtrade established its first Living Income Reference Price for cocoa in 2019, before going on to other key crops. and since then has carefully estimated prices for products such as coffee, vanilla, coconuts, mangos, and rice. In 2022, Fairtrade calculated a Living Income Reference Price for conventional cashews from Tanzania for the brand Johnny Cashew. The data collected from 120 farmers from one produce.
