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Best Practices voor een duurzame toekomst
09 januari 2009

Dutch say it with fairtrade flowers in times of crisis

The flowers carry the independent Max Havelaar label and come from three certified nurseries in Tanzania and Kenya which comply with international Fairtrade directives covering social, ecological and economic development. The nurseries will be regularly checked by the independent Fairtrade certifier FLO-CERT in order to ensure that they continue to comply with the Fairtrade standards and that working and environmental conditions continue to improve.

“There is a growing demand for fair products, despite the shrinking economy”, says general manager Coen de Ruiter of the Max Havelaar foundation. He calls the initiative of the three “unprecedentedly positive”. According to him this demonstrates that market and consumers “believe that sustainability is the future.”

Nevertheless the Dutch Association of World Shops (DAWS) fears that the income of Fairtrade producers could fall as a result of exchange fluctuations. According to Erika Spil of DAWS the value of products sold has dropped by a quarter in only three months. In the magazine Wereldzaken she explains: “International trade is paid in dollars, euro or British pounds. Currencies are always changing, but due to the credit crises the differences have become so large, that it becomes difficult to run a company.”

Payment in advance, one of the pillars of Fairtrade, can soften the pain for producers. Fairtrade importers pay 50 percent of the ordered goods in advance. They also pay the interest charged on this capital and full shipment costs. In a global market still trending down, this can help protect vulnerable producers in developing countries: they first earn the money and deliver the goods later, so the negative impacts of currency fluctuations are softened.

But payment in advance is becoming more difficult, as most importers have to borrow funds from increasingly reluctant banks. As the credit crunch develops into a full-blown crisis, it is becoming clear that importers will have to rethink their role. For example, planning is key: some producers are able to work on smaller deposits and produce faster. This reduces the capital requirements. Ways to shorten delivery times are also welcome. Importers could order less and more frequently. Producers on the other hand need to take a deeper interest in the financial security of importers.

The partnership between importers and their producers remains crucial. Fairtrade would be seriously damaged if payment defaults meant that the pain of the crisis was felt primarily by producers.

P+ webtip: PDF of Max Havelaar in Dutch

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