Fairtrade certified plantations in developing countries: what is in it for the workers?

The setting of social and environmental standards in agriculture has continuously increased over the years. Products certified by Fairtrade, Organic, UTZ or Rainforest Alliance are popular with consumers who want to ensure that particular production and processing standards are met. Fairtrade is one of the most well-known certification schemes world-wide. It focuses on improving the working conditions and bargaining power of smalls-scale farmers and plantation workers. Whether Fairtrade actually achieves these objectives is still hotly debated.

So far, research has largely focused on the effects of Fairtrade certification for small farmers – also because historically the Fairtrade movement’s aim was to improve trade conditions for small-scale farmers.  Today it is estimated that about 1.5 million small-scale farmers are Fairtrade certified through producer organisations and about 186,000 workers are employed on Fairtrade certified plantations (Fairtrade International, 2018).

But plantation workers are considered one of the most vulnerable groups in the global trade system as they are often exposed to difficult working conditions, low wages and lack of bargaining power. To understand what role certification can play to improve working environments on plantations, Dr. Katharina Krumbiegel and Prof. Dr. Meike Wollni from the DFG-supported Research Training Group ‘GlobalFood’ (RTG 1666) and Prof. Dr. Miet Maertens from KU Leuven, implemented a study in the pineapple sector in Ghana. Primary survey data from 325 randomly sampled workers from eight different export-oriented pineapple companies was collected in 2015. The results of the study were published this year in the journal “World Development”.

Ananasfeld NEU

To ensure the best comparison across Fairtrade and Non-Fairtrade certified companies, they were matched according to their size, production capacity and foreign management. The interviewed workers were questioned on their household’s socio-economic characteristics as well as their employment conditions, provisions of services by their employer, labour union involvement, and company utilization of the Fairtrade premium. To take into account both worker and company-level information and the possible selection bias, three complimentary econometric approaches are applied to assess whether Fairtrade certification has an effect on both wages and job satisfaction. Using an objective and subjective outcome variable provides a more holistic understanding of the work environment on plantations.

Interview

The findings show that both hourly wages and job satisfaction are indeed higher on Fairtrade-certified plantations. In all models hourly wages are more than 30% higher for Fairtrade workers. Job satisfaction is also significantly positively correlated with Fairtrade certification, which can be driven by factors such as higher wages, permanent employment contracts, training opportunities, company services related to health care and paid leave as well as established labour unions supporting worker empowerment. As all exporting pineapple companies in Ghana are GlobalGAP certified, we conclude that Fairtrade is able to provide comparably better working conditions and wages for hired labourers beyond GlobalGAP’s standards through its explicit labour requirements. This shows that market-based approaches that set specific social standards can indeed reduce the vulnerability of workers and foster improved employment opportunities in developing countries.

 

Originalveröffentlichung: Krumbiegel, K., Maertens, M., Wollni M.:  The Role of Fairtrade Certification for Wages and Job Satisfaction of Plantation Workers; in: World Development (102).

Katharina Krumbiegel
Dr. Katharina Krumbiegel
International Fund for Agricultural Development (ifad)
E-Mail: k.krumbiegel@ifad.org

 

 

 

 

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