Is it time for Fairtrade Milk (again) -response from Fairtrade Foundation

Since this subject has been in the news a lot over the last month or so, please see below a shortened article (full one available on the Fairtrade Foundation website) about their response to how we in the UK might best help our own dairy farmers. The full article is written by Barbara Crowther, Director of Policy and Public Affairs for the Fairtrade Foundation.

“Shoppers in Asda in Stafford must have got a shock when they saw two cows in the aisle. Following further price cuts from milk processors, dairy farmers have recently escalated their protests to a Milk Trolley Challenge removing their product from shop shelves because the price no longer covers the cost of production.

This is the refrain of many farmers around the world, from cocoa to tea to bananas. It’s why banana farmers were in the UK last year knocking on the doors of government and the Fairtrade Foundation was asking the Government business department to launch its own investigation into the negative livelihood and sustainability impacts of price wars and cheap food. Sadly the Government reply merely said everything was working very nicely in the interests of consumers.

Except it seems that shoppers themselves disagree. Although not scientific, when the newspaper Metro polled its readers on whether they would like to see fair trade milk, 94% of people agreed. Under pressure from dairy farmers, this week Morrisons announced a new milk brand offering their customers the option of paying 10p more for a litre, with a promise that the money would go to the farmers via its milk supplier Arla. Will its shoppers rise to the challenge?

The question has been raised once again why Fairtrade can’t just begin at home and extend our label and fair price promise to UK dairy farmers. Could we make our Mark work on milk? It’s a fair question, and is something that has been looked at, and discussed many times – not least as part of a ‘Local and Fair’ conference three years ago, bringing Fairtrade and Cumbrian farmers groups together to discuss the issues they hold in common.

Fairtrade was born from the needs of farmers and workers who often earn less than the US$2 per day absolute poverty line, who live in countries with little or no social safety net, and are far removed from the markets they sell to. UK dairy farmers are able to take their protest to the doors of supermarkets and processors, lobby MPs directly or via farmers’ unions and organisations such as the NFU or Small Farmers Association. The farmers and farm workers we represent have not got this access.  They rely on Fairtrade and its partners to lobby on their behalf.

In short, we are 100% behind the concept of fair trade milk, but we’re not necessarily the right organisation to invest in the work that would be required to set up such a scheme, which we believe would also need to deliver against sustainable agricultural practices and high animal welfare standards too. A number of retailers have taken matters into their own hands, through schemes such as Sainsbury’s Dairy Development Group, Waitrose farmgate milk pricing, or Booths Fair Milk programme. Farmers’ groups warn that these schemes have addressed the prices for liquid milk sold in pints and litres, but not the vast tonnes of milk that go into food processing and dried milk products that are part of the problem. So a label on the milk cartons bought in shops may not be the answer at all.

The irony is that, whilst the price wars on milk, bananas, tea and other daily basket items allow retailers to price match on a daily basis, slowly ratcheting them down, any attempt by retailers to coordinate a pricing model designed to return the cost of sustainable production to farmers across the whole industry could be deemed price fixing and subject to investigation by the Competition and Markets Authority. Several supermarkets and processors were fined tens of millions of pounds in August 2011 precisely on this subject. There is a point to this focus on pure consumer interest – it is designed to prevent industry conspiracies and protect consumers like you and me from being ripped off. But the question is left – whose job is it to protect the suppliers?

The Fairtrade Foundation was one of many organisations that successfully lobbied for the establishment of a Grocery Code Adjudicator to ensure fair play between retailers and their suppliers, according to the Grocery Sector Code of Practice. It is clearly already doing good and useful work, but neither its mandate nor the Code itself, are allowed to investigate issues of below-cost of production trading. Its focus remains on supermarkets and their direct suppliers, and does not include for example, the relationship between suppliers and primary producers. Farmers who sell via intermediary companies aren’t covered. Without more transparency in supply chains on farmgate and trading prices, it is almost impossible to analyse where the real problems in delivering fair prices to farmers really lie.

With the launch of new Sustainable Development Goals scheduled for September 2015, every government in the world will become accountable for delivery – including a new goal on Sustainable Production and Consumption. Is this an opportunity to think afresh about the kind of mechanisms and regulations to address unfair trading practices in a comprehensive way? Could it incentivise best practices in sustainable agriculture and fair trading? We in the Fairtrade Foundation think so.  It would require vision, some progressive businesses to back it, the Fairtrade movement to champion it (we will), and a government with the political will to make it happen.

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