LABELLING, CERTIFICATION AND FAIR TRADE Fabrice Leclercq October, 13th 2009

What is Fair trade? A vision of the world in which all producers can enjoy secure and sustainable livelihoods Producers fulfil their potential and decide on their future Trade can be a fundamental driver of poverty reduction and greater sustainable development, but only if it is managed for that purpose, with greater equity and transparency than is currently the norm.

Means to reach this vision of Fair trade: Labelling and Certification Fair trade Certification Mark Fair trade Certification Fair trade Standards Fair trade Minimum Price Labels

What is certification? A procedure that gives assurance that a product or service is in conformity with certain standards. Can be seen as a form of communication along the supply chain. Demonstrates to the buyer that the supplier complies with certain standards At least, two different kinds of certification schemes: environmental, and social.

What is labelling? Ultimate goal: connect consumers and producers via a label A certification label: symbol indicating that compliance with standards has been verified. Use of the label is usually controlled by the standard-setting body. Where certification bodies certify against their own specific standards, the label can be owned by the certification body. The label is a form of communication with the end consumer.

What is branding? Added value creation comes from differentiation Certification schemes contribute to differentiate producer offers in the market place Double certification (e.g. fair trade and environment ) augment the power of differentiation amongst exporter offers (e.g. Utz Certified) Geographical indicators act as further differenciators alike (proudly South African, etc.), leading to « country » generic or regional specific brand developments (e.g. EDENGUI) All of the above next to individual (or collective) producer brands Brands act as value enhancers for enterprises. They carry the expression and the unique performance attributes of the firm way beyond the sole product of services offer, to include the full enterprise performance package: product quality, service delivery, customer care, etc. As such, brands are the most proprietary value building asset of an enterprise.

Labeling and Certification: How can they improve market access for productions? Example of small-scale fisheries (SSF). Three main questions: Regarding Markets: what happens in the marketplace, both domestic and in terms of export/imports? Regarding Resources: what happens to the fisheries resources – is there a clear linkage to responsible fisheries? Regarding People: what happens to those involved – fishermen, as well as the communities in which they live?

Labeling and Certification: How can they improve market access for productions? Example of small-scale fisheries (SSF). Markets Positive market-related viewpoints on certification schemes, and branding: Generates increased income, and profits All family members have potential to be involved Can promote demand for good products May improve product profile/image Producers obtain a better price if the parameters surrounding that product are clear Quality and food safety may improve as a result of embarking upon a scheme Competitive advantages – development of a niche, at least in the short-term Branding may secure markets Branding may have very little cost involved

Labeling and Certification: How can they improve market access for productions? Example of small-scale fisheries (SSF). Markets Negative market-related viewpoints on certification schemes, and branding: Many hurdles to tackle before reaching the destination Very expensive to start for SSF May result in a reduction in material supply to other markets Export mainly to the most “politically correct markets”, not necessarily those who pay the best price If involving high-quality fish, perhaps beneficial to the trader but the local/domestic market may suffer Fishermen who do not get certified become isolated and do not have the same market access Increased fishing pressure may result from increased demand How to tackle illegal or unreported fishing within a certified fishery? Eco-labelling requires a lot of data Domestic market gets the reduced-quality fish and become marginalized – reduces local supplies

Labeling and Certification: How can they improve market access for productions? Example of small-scale fisheries (SSF). Impacts on livelihoods There is a difference in the power-balance Retailers have a tendency to pass on the costs involved to the fishermen Certification can be perceived as an additional burden Certification could be confusing for SSF Cost of assessing all the people involved in SSF, would not be met with adequate financing.

Labeling and Certification: How can they improve market access for productions? Example of small-scale fisheries (SSF). Conclusion: There is a big gap between the international market and many small-scale fisheries It is important for the SSF to be well organized But, There are market advantages to be gained Creation of advantages in terms of resource sustainability

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