Why study resilience using the COVID-19 pandemic?
Small-scale producers around the globe are increasingly faced with three concurrent crises: (1) COVID-19, (2) climate change and (3) financial crises. Whilst the COVID-19 pandemic is an extreme event, with the rise of climate change, and inflationary tendencies, a fall in commodity prices and a rise in farm input costs, transportation, and living costs, producer organisations around the globe have come under pressure. Sadly, this will most likely not be the last time that farmers and workers in developing countries will experience hardship. In times of crisis, resilience becomes increasingly vital to achieving sustainable livelihoods. This makes it important to understand what can foster the resilience of farmers and workers, raising the question, ‘How does and can Fairtrade certification contribute to producers’ resilience?’
Reviewing the evidence base
To this end, Fairtrade International commissioned a research study on ‘Fairtrade certification and producer resilience in times of crisis’. The study draws on a literature review, two combined global online surveys with a total sample of up to 523 Fairtrade certified producer organizations, and case studies in Peru (banana farmers), Indonesia (coffee farmers), and Kenya (flower workers) with over 300 producers and workers from both Fairtrade and non-Fairtrade certified producer organizations (survey, interviews, and focus group discussions).
Figure 1. Case study locations
The resilience of Fairtrade producers and workers
The research study measured resilience aligned with Fairtrade’s Theory of Change and the Food and Agriculture Organization of the United Nation’s guidelines for Sustainability Assessment of Food and Agriculture systems (SAFA), consisting of (1) Good Governance, (2) Economic Resilience, (3) Environmental Integrity, and (4) Social Wellbeing. Based on these, the researcher created a resilience index; the higher the attained score relative to the total possible score (in percent), the higher the resilience.
Results from the global surveys (Figure 2. A) showed that Fairtrade certified producer organizations scored 62% on the developed resilience index. Of the four resilience components, Fairtrade producer organizations scored highest in terms of social wellbeing (average score of 83%), followed by good governance (65%), economic resilience (57%), and environmental integrity (56%).
Results from the case studies (Figure 2. B) showed that households that are part of a Fairtrade Producer Organization reported greater resilience than their non-Fairtrade counterparts. This was especially thanks to the dimensions of social wellbeing and economic resilience.
Figures 2. A & B: Fairtrade Producer resilience and household resilience
The impact of COVID-19 on the lives of Global Fairtrade producers and workers
To better understand the effects of COVID-19 on producer organisations and their members and workers, the researchers created a COVID-19 impact index, consisting of health, social and economic indicators. Results from the global surveys (figure 3. A) showed that 63% of Fairtrade producer organizations around the world reported a high or very high impact of COVID-19 on their members and workers (see Figure 2. A). Especially smallholder Producers in Africa.
However, results from the case studies (Figure 3. B) showed that households (farmers and workers) that are part of a Fairtrade Producer Organisation experienced a lower impact than their non-Fairtrade counterparts. On average, households which are part of a Fairtrade certified producer organization reported 12% less impact from COVID-19 than non-Fairtrade households (see Figure 3. B).
Some differences existed by country (commodity). Whilst Fairtrade certification was associated with a lower impact of COVID-19 amongst households in Indonesia (coffee farmers), and Kenya (flower workers), this was not the case in Peru (banana farmers). This may have been the case because the Peruvian banana sector was already struggling before the pandemic, and Peru was the country with the highest number of COVID-related infections and deaths among the case studies.
Figures 3. A & B: The impact of COVID-19 on Fairtrade Producer Organizations and households
Factors affecting the resilience of Fairtrade producer organizations
The research team identified factors fostering the resilience of producer organizations and households to external shocks and stresses:
- Producers receiving support from the Fairtrade Producer Relief/Resilience Funds, were, on average, 19% less likely to report a high impact of COVID-19 on the lives of their members/workers.
- Producer organizations that received a higher price than the previous year were 34% less likely to report the high impact of COVID-19 on their members/workers.
- Producer organizations reporting high financial sustainability were 35% less likely to report the high impact of COVID-19
- Access to credit helped producers mitigate the impact of COVID-19 on their members/workers, with producer organizations receiving the credit from Fairtrade buyers who were 24% less likely to report a high impact of COVID-19.
- Producer organizations that took additional measures to mitigate COVID-19 were, on average, 12%less likely to be highly impacted by COVID-19.
Finally, the research finds that Fairtrade makes the most significant difference for producers in the areas of social wellbeing and economic resilience. In turn, economic factors (especially financial sustainability and safety nets) contribute most to household resilience. While emergency cash contributions are essential, especially for urgent health and safety needs, receipt of fairer prices through long-term trade relationships is most effective, as this helps build financial stability and enhances the resource pool to support farmers and workers during crises. In addition, access to credit and income diversification enhances the farmers’ ability to invest in a more sustainable and diverse mix of income streams, which is especially important during challenging and less predictable times.