FAIRTRADE COVID-19 RELIEF AND RESILIENCE FUND

On World Fair Trade Day, Fairtrade International had announced the launch of a “Fairtrade Producer Relief Fund” and the establishment of a “Fairtrade Producer Resilience Fund” in response to the global COVID-19 pandemic. The two funding mechanisms are intended to meet the immediate needs of the farmers, workers, and their communities, while also establishing a foundation for longer-term economic recovery efforts.

Through the Fairtrade Relief Fund a total of 699759.40 EUR was distributed to 273 producer groups across 21 countries in Asia and Pacific thereby supporting 219666 beneficiaries (farmers and workers) to mitigate the impact of COVID-19.

Note: This report is as per the analysis of data collected from the individual reports submitted by producer organisations across 21 countries

Fairtrade Relief Fund helps over 200 Fairtrade producer organisations to retain their businesses amidst the pandemic

More than 80% of the producer organisations were able to pay their certification fee for 2020. This helped them to retain their businesses during the economically challenging time. Generally, the certification fees are paid by SPOs by utilising a part of their Premium fund generated through the Fairtrade Sales. However, due to the lockdown, there were no new orders and Fairtrade sales of most products were significantly reduced. The entire supply chain was disrupted, and the impact was felt across different stages of production: from field to processing. The earlier contracts that specified trans-shipments in the initial phase of the pandemic i.e., April and May were delayed as the shipments were stuck due to the sudden closure of shipping ports.

Majority of our producers were able to work only on the sales orders placed before the pandemic. Due to the uncertainty of the market trend or forecast, the buyers were skeptical about committing to any volumes and refrained from purchasing. There also have been instances of cancellation of contracts and delayed off-take for many products. The exports continue to take a hit due to the closing down of shipping ports both in the producer countries and destination marketing countries.

Post the announcement of the relaxation in the use of Fairtrade Premium by Fairtrade International in 2020 to help the producers respond to the pandemic, the majority of the organisations had already utilised the Fairtrade premium at their disposal for conducting awareness programs and distributing medical and food essentials to their farmers and workers to combat the effect of COVID 19.

PRODUCERS QUOTE

”The cooperative had a challenging year in 2019 because many of our key customers who are green coffee bean buyers were also facing challenges which were reflected in the amount of coffee they had already procured from us, and the financial support they had provided to the Coop. As such it was difficult than usual for us to pay the annual certification fee because we had very little money left with us. To be unable to find the required fund to pay the certification fee would mean to risk losing our certification which would have serious consequences for the Cooperative. Our buyer's minimum demand is that we have a valid Fairtrade certification to be able to trade. We received 1585 EUR through the Relief fund which helped in ensuring business continuity for 37 farmer households. In addition, it also allowed us to channelise our resources to other important projects such as replenishing emergency medical funds for the cooperative. Before we had only one buyer and any problem for them also meant a problem for us. In the past year, we have 03 new buyers from Germany and Pacific and more clients mean reduced risk in the future because it is likely that some will be less affected by adverse events as compared to others. In addition, having large buyers who are more stable with a steady customer base reduces our risk.

Sinthasath Thengsombat-Cooperative of Sustainable Eco Coffee, Laos

”Since the COVID-19 crisis emerged suddenly, it severely affected our business and landed the organization in a difficult financial position. It subsequently affected our Fairtrade sales since most of the orders were cancelled or reduced considerably. We had to renew our certification with the Fairtrade Relief support of Euro 2090 which was an enormous help and encouragement for our organization and for our workers during this challenging time. It helped us to continue our business and carry out the ongoing Fairtrade programs without any conflict or interruption. We assure you that we will continue our commitments towards the successes of Fairtrade activities for enhancing the Social, Environmental, and Economic Development of our workers, their families, and Society. We have taken all the possible steps to avoid or minimize the risk of COVID pandemic infection and spread in the company. Good health practices are being continued in both the Flower farms of Tropiflora.

G.K.K. Priyantha - Tropiflora (Pvt) Limited, Sri Lanka

”While the business slowed down, the drop in vanilla production resulted in a reduced income for our farmer members and lesser Fairtrade premium for the association. The Fairtrade Relief fund will allow the association to meet the certification cost for 2021, and the premium received for 2020 will be utilized to meet other needs of the association. By remaining in certification, Vanilla Growers Association’ will be able to trade under Fairtrade conditions, allowing the association to receive the premiums to meet the additional sustainable needs of the association.

Loisi Halaliku, Vanilla Growers Association, Tonga

”With a bad coffee season in the 2020 coffee year, accompanied by the global pandemic, our income from coffee sales was relatively lower than in previous years. The general restrictions placed on the movement of the people and the transportation of coffee greatly affected HOAC, respectively. The Covid-19 fund has relieved the organization from the financial pressure to pay the Fairtrade annual registration fee. By remaining in the Fairtrade system, HOAC can meet it's business and organizational obligation and address any risks that may arise in the future.

Daniel Kinne- Highlands Organic Agriculture Cooperative Society (HOAC), Papua New Guinea

”During the pandemic, most of the hotels, restaurants, and offices were under lockdown for a long period in Bangladesh. Due to the travel restrictions, the export orders from foreign buyers were also very few. As a result of less consumption along with a lower tea price in the local auction market, we were facing serious pressure in maintaining the cash flow of our business. In the meantime, we received the Fairtrade Relief fund which indirectly helped in mitigating the financial crisis. We were able to pay the Certification fee and other audit support. We have enhanced the awareness among our employees and communities on safety and health issues to mitigate such kind of risks in the future.

Munshi Al-Imran Hasan; Representative of Kazi and Kazi Tea Estate Ltd, Bangladesh

”We have used the relief fund for the payment of the 2020 Fairtrade certification annual fee in order to maintain the certification, 971 farmer members will still be able to conduct trading in the Fairtrade system during the pandemic and the farmers can still get the benefit from Fairtrade.

NIRFAN NURIANSYAH/ABDULLAH ALI; KOPERASI PRODUSEN GAYO HIGHLAND; Indonesia

”Due to the impact of COVID-19, there are almost no Fairtrade sales for the cooperatives. We used the received funding for the payment of certification fees in 2020. We will strengthen the unity and cooperation between cooperatives and try to develop new Fairtrade coffee consumers in the domestic market and explore possibilities for opening the domestic Fairtrade coffee market. We appreciate the funding assistance and will make efforts to persist in doing FAIRTRADE.

Gao Mei; Puer Coffee Specialized Cooperative Network, China; FLO ID 32281

”The Cooperative members organised a meeting and jointly took the decision to use the fund to make the payment for the annual certification fee. This has alleviated the financial pressure on the cooperative. We are aiming at diversifying our product and income means to ensure our members can overcome difficulties from similar risks in the future.

Duong Van Thanh; La Grai Cashew Producer Cooperative, Vietnam

”During a time when the tea industry is already engulfed in a crisis, the COVID 19 pandemic made the situation more alarming across the globe. As such every support either by way of subsidy or allowance goes a long way in helping us fulfill some of the goals which we aim to achieve as a Fairtrade team. We had carried out several activities such as providing free ration, medical, PPE etc to our workforce. We look forward to working together as a team to achieve the goals and follow the core principles of Fairtrade.

H. S. Kapoor; G.M-Plantations- Singampatti Group; Bombay Burmah Trading Corporation Limited, South India

”We faced low sales and accumulated stocks. All the worker's payments were made on time and their entitlement benefits were provided by the company. The Relief Fund helped us to settle the FLO-CERT Certification Fee. We have invested in providing medical essentials for workers and the community has been well trained with precautionary measures. We will continue with the awareness training.

N. M. A. Gaffar –Director; Stassen Natural foods (Pvt) Ltd; Sri Lanka

”This funding is invaluable for us since we currently face financial distress due to the impact of COVID 19 pandemic and this has helped us to settle the 2020 Fairtrade certification annual fee.

Mawardiyanto; Koperasi Buana Mandiri, Indonesia

”COVID-19 Relief Fund helped us to pay the annual certification fees which give us a sense of being cared for like a family. We are thankful for this extended help during this difficult time of trial and turbulence.

Muhammad Usman; Masoom Support Foundation, Pakistan

”Thank you so much for the generosity shown by Fairtrade! It has helped us to manage our expenses efficiently. We are happy to share that from the saved certification cost we could invest in providing Personal Protective Equipment to rural hospitals that are currently working as COVID centers. The satisfaction of helping the ones who are in need is priceless.’’

Sudhakar Mengane; Chairman- Freshyard Farmer Producer Company Limited

”We all went through Financial stress during the COVID 19 lockout. We however paid all our workers during this time. The Fairtrade support has helped the Company mitigate the financial stress without affecting the workers.

Gerard; Chamraj, UNTE, South India

”With our orders getting canceled, it was difficult/next to impossible to pay the fee. The one-year relief through the certification subsidy has helped us greatly in this needy situation.

Manoj Kawale, Fairtrade Officer- N.D. SMALL FARMER PRODUCER CO.LTD

”I take this opportunity to thank Fairtrade International for this kind gesture of supporting us and hand-holding during the Covid crisis.

Sanjay V George, Senior Manager – Operations; Neelamalai Agro Industries Ltd, India

”We are very thankful to Fairtrade for the support in such a difficult time. This means a lot to the farmers’ society.

Om Anand Sharma; President on behalf of the entire farmer’s society; Pratibha-Vasudha Jaivik Krishi Kalyan Samiti - FLO ID - 4531

”The Covid Relief Fund is as sweet as our Organic Sugar and it has given us confidence in FI togetherness in this unpredicted crisis.

Muniraju K.S behalf of 4 sugar SPOs in Karnataka.

”We are growing strong economically and environmentally. Thanks to Fair Trade for being part of our lives.

The Small & Marginal Tribal Farmers Mutually Aided Cooperative Society Limited (FLOID- 6095)