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Effects of Fairtrade on the livelihoods of poor rural workers

Abstract

Workers in rural areas in developing countries often face precarious working conditions, low wages and poverty. Sustainability standards—such as Fairtrade—could potentially improve the situation. Although many studies have analysed the impact of Fairtrade on smallholder farmers, few focus on wage workers beyond those employed by large companies despite most workers being employed by small farms and cooperatives. We analyse the effect of Fairtrade on workers’ wages and working conditions in the small farm sector. We conducted a survey among workers in the cocoa sector in Cote d’Ivoire and their employers, distinguishing between farm workers and cooperative workers. Fairtrade improves wages and reduces poverty among cooperative workers, but not among farm workers, even though the latter are particularly deprived. At the cooperative level, labour standards are regularly monitored by Fairtrade. Certification also helps cooperatives increase the services offered to their members, which leads to more and better-paid employment at the cooperative level. At the farm level, inspections of labour standards are more costly, difficult and rare. Thus, Fairtrade hardly affects traditional employment modalities at the farm level even when farmers themselves benefit from certification. Ensuring that labour standards are met at all levels may require innovative and more efficient monitoring approaches.

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Data availability

The data are available from the corresponding author upon request.

Code availability

Data were analysed using Stata14 and pre-installed codes.

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Acknowledgements

This research was funded by the German Research Foundation (DFG) through the GlobalFood Programme (No. RTG 1666) and a DFG-fellowship (No. ME 5179/1-1). Additional financial support was received from the foundation Fiat Panis.

Author information

E.-M.M. developed the research idea. E.-M.M., J.S. and M.Q. designed the study. E.-M.M. and J.S. collected the data with support from C.N.K. E.-M.M. conducted the data analysis and wrote the paper. M.Q. edited the paper. M.Q., J.S. and C.N.K. commented at the various stages of the research. All authors approved the final version of the paper.

Correspondence to Eva-Marie Meemken.

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Further reading

Fig. 1: Total household income and wage income by type of worker and certification status of the employer (in 1000 CFA per month).