An analysis of the effects of Fairtrade’s financial regulations and other Fairtrade interventions on deforestation at the producer level.

Programme background

Fairtrade’s new Theory of Change assumes that its interventions – standard requirements and tools, pricing tools, producer support including climate academies and deforestation data and intelligence – will contribute to building climate resilient practices of Fairtrade producer organisations. Currently, there are only two recently introduced criteria for deforestation in the new Theory of Change. And deforestation data is insufficient.

A series of internal and external factors will drive Fairtrade producers’ adoption of deforestation monitoring tools and investments in tackling deforestation risks:

• The climate and biodiversity crisis affects ever more small-scale farmers and needs urgent action.
• Companies are expected to demonstrate climate action, including on their scope 3 emissions, which includes Fairtrade production – e.g. coffee or cocoa – at the beginning of the supply chain.
• Ever more national and international legislations address the crises mentioned above, including the matter of deforestation and food systems as drivers of the climate and biodiversity crisis, e.g. the EU Green Deal.
• The recently passed EU Deforestation Regulation (EU DR) is only one such example. It will profoundly affect agricultural commodities within its scope, including the crops most important for Fairtrade producers: cocoa and coffee from small-scale producer organisations.
• Fairtrade standards include more & ambitious environmental criteria that have to follow the legislative evolution that generally shows trends to stricter environmental protection and HREDD (e.g. EU regulation, national member states regulations, regional regulations).

Objectives

KIT Royal Tropical Institute, together with The Chain Collaborative, Expressing Origin and local, origin-based researchers, are performing a quantitative and qualitative assessment on the effects of the Fairtrade system on deforestation at the producer level. The objective of this study is to assess if and how Fairtrade incentivises or de-incentivises deforestation by means of its standards and tools including the Fairtrade Pricing and Premium Regulations its engagement on the ground with producer organisations and farmers.

The main research question is:

• Whether and if so, to what extent does Fairtrade production in the cocoa and coffee sectors provide incentives or disincentives for deforestation?

The geographic focus of this research was limited to countries with a high number of Fairtrade producer organisations engaged in cocoa and/or coffee production: Ghana, Ivory Coast, Colombia, Peru and Honduras. The timeline is June 2023 – February 2024.

Approach and Methods

KIT designed a mixed-methods approach rooted in Realist Evaluation which is used to a) identify which factors lead to achieving (or not) certain results, and b) clarify how certain interventions cause (and/or contribute to) outcomes and impacts. This further enables Outcome Harvesting which leads to an understanding of what has changed (including unintended and indirect changes) as a result of interventions.

KIT also applied an innovative technological change framework proposed by Glover et. al. (2019) which  breaks down Fairtrade’s newest interventions (e.g. SPOs’ monitoring systems and data on deforestation) into technology change processes with four aspects: propositions, encounters, dispositions and responses (PEDR).

Three main types of data collection methods are used in the study: a comprehensive desk review; semi-structured interviews and focus group discussions with Fairtrade stakeholders (e.g., National Fairtrade Organizations, Fairtrade Producer Networks, the Fairtrade Center of Excellence Climate & Environment); and a survey of cocoa and coffee farmers and managers of cooperatives and associations. The “Lot Quality Assurance Survey” included small, random samples of 19 members from target producer organisations (three per country).

Results and Recommendations

The findings will be used to inform Fairtrade and its key stakeholders on effective ways to curb deforestation, better protect forests, biodiversity and climate (e.g., update of standards, pricing & economic tools).

This will be available in the first quarter of 2024.