How impactful is Fair Trade? A paradigm shift in reporting would tell a better story

Abstract

There is an extensive literature on the impact of Fair Trade. While much of the evidence is positive, there are also studies that find negligible, neutral or even negative effects. In this article, I propose that a paradigm shift towards systematic and regular outcome and impact reporting by Fair Trade organisations is both possible and urgently needed. This shift will align financial and non-financial reporting and help to ensure that Fair Trade is delivering on its core objectives, which include better prices for smallholder producers, improved working conditions and local sustainability. I provide evidence that at least some of the mainstream agribusiness sector is moving towards outcome reporting in some dimensions of their operations. Fairtrade and other certifiers for responsible sourcing only do marginally better than agribusiness in their current reporting in terms of outcome and impact reporting. A new paradigm in systematic and real-time outcome reporting is possible. To achieve this, data production must be bottom-up, rather than top-down. Smallholders and producers have to become owners of the positive outcomes they are seeking to achieve.