On making a living income come true

“The very initial thought of fair trade is to raise a living standard”, initiates Dr. Weber the session. However, even though connected to a fair trade supply chain, smallholders sometimes face a large gap between the measurable level of a living income and the income actually achieved. It is a struggle that needs to be addressed and supported while also building awareness: Consumers in affluent societies might wonder why to pay higher prices for fair trade products when farmers still do not earn a living income. On the other side, producers wonder whether added value of a living income outweighs the added bureaucracy of new calculations. Fair trade certification givers do provide the “entry ticket” to a global market by signaling fair trade production but cannot regulate the market prices.

Facing this complexity, the research aimed to answer the question: How to derive strategies to close the gap between living income and real income by fair trade and organic agriculture in regions and populations struggling for food security?

In addition to technical efficiency as an important factor in increasing household income, the study revealed other variables: the education level of landowners, a multipurpose cultivation on small fields for higher harvest volumes, the possibility to incorporate workers, and lastly, a factor that Weber points out as particularly promising: entrepreneurial training and, hence, entrepreneurial activity. Research showed: This does not mean that all family members should become entrepreneurs while being farmers at the same time. In fact, if only one family member is entrepreneurially active providing an additional income to the family, this contributes to closing the gap between living and real income significantly.

The reason: Entrepreneurial thinking allows to see and find opportunities, for example the access to more productive technologies, transportation, contacts that increase the organic farm’s productivity. “Training entrepreneurial thinking and financial literacy; not just thinking in supply chains but in new business models for additional value” – this could also bridge the gap between unemployment and living income goals, explains Dr. Weber.

Dr. Weber concludes that for us as an international association of organic agriculture engaged in fair trade certification, this can become part of our area of control – as opposed to an area of influence: We can decide to provide not only training on organic farming but include basic entrepreneurship training. Furthermore, when adding the living income or wage in fair trade certification standards, we could as well include food security principles to highlight this topic’s relevance for consumers and us, as certification givers (see also “Sustainable Development Goal 2: No Hunger”). Equally important factors that we can actively control are price and wage transparency and reliable long-term contracts with farmers.

By contrast, we must not underestimate our area of influence: By collaborating with partners and engaging in advocacy and political action, we can contribute to shaping market prices, the supply chain and eventually enable minimum living standards. Lastly, we should increase awareness on our power as consumers through “unlearning our consumption patterns and rethinking our influence on fair global trading”. Both the area of control and the area of influence left the audience at BIOFACH 2023 with a clear message and call to discussion: There is a lot to do! Let us join forces to derive actionable strategies together, so the living income claim is set to governments and becomes a reality for farmers and workers worldwide.

If you would like to learn more about all factors that leverage the living income, the case study research results in Burundi and the conclusions drawn by Naturland Fair team, we invite you to have a look at our newly published position paper.

This text is a translation. No guarantee can be given for the correctness.