Impact Assessment of Fairtrade in the Banana Sector by mifei


									    Assessing the Impact of Fairtrade on Workers in Indian Tea

                                       Terms of Reference
This document is intended to outline the scope and objectives of the Fairtrade
Labelling Organizations International (FLO) study of the impact of Fairtrade
certification on tea plantations in Asia. This document will be circulated to a wide
range of stakeholders for comment and then be revised accordingly.

FLO refers to impact assessment as describing an assessment at a specific point in
time. It verifies whether the intended objectives are being achieved and what
difference this is having for the people involved. Impact assessment studies are
usually undertaken after a long enough period for the results of interventions to be
evident – typically 3-5 years.

The final Terms of Reference (ToR) will be used by our chosen research partners,
[…], as the basis for developing a detailed methodology and implementation
schedule. These documents will be circulated to all interested stakeholders for their

1. Background and Rationale
Fairtrade labelling‟s strategic review process, which is nearing completion, has
highlighted several issues that need to be addressed if it is going to achieve its
development objectives. One such issue is the need to improve strategies aimed at
addressing the needs of workers on Fairtrade-certified plantations. This is a key
component of Fairtrade labelling‟s stated intention of being more responsive to the
needs of „producers‟, a generic terms encompassing farmers, workers and their
organisations in the context of Fairtrade‟s development goals. Please see „Making
the difference‟ which is annexed to this proposal for a summary of the Fairtrade
labelling strategic review.

Another area highlighted by the strategic review was that FLO cannot achieve its
development goals in isolation and must build stronger partnerships in order to
deliver on its commitments to its beneficiaries. In the context of workers in hired
labour situations, Fairtrade labelling and trade unions share the same goals; namely
to strengthen workers‟ rights, improve their working conditions and increase their
participation in decision-making processes. The FLO strategic review states that ‘We
need to change the way we engage with employing businesses and their workers
ensuring that we complement and support the work of other organisations seeking to
improve labour rights, ensuring particularly that we support and complement the work
of independent trade unions.’
FLO has recognised the importance of establishing strong links with trade unions in
order to achieve these goals and, together with other relevant organisations like IUF,
has undertaken several initiatives aimed at strengthening the linkages between
Fairtrade Labelling and trade unions1.

  For instance, a FES sponsored conference between the IUF and FLO in Bonn in June 2007 prompted a number
of important initiatives which have been undertaken by and between the two organisations. FLO established a
Fairtrade Labelling Initiatives Trade Union Working Group (TUWG) which has a mandate to improve relationships
between FLO and the international trade union movement. The FES sponsored conference also led to the
appointment of a part-time Trade Union Liaison Officer at FLO and there are plans to create a full-time position in
2009. Recently, two additional conferences have taken place, both of which were supported financially by the Irish

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                         1
As part of a larger project that is funded by FES and that aims to strengthen the
dialogue between FLO and trade unions in Asia, FLO is commissioning an impact
study on the effects of Fairtrade certification on workers in tea plantations in India.
The impact assessment should contribute to a more accurate understanding of the
challenges facing workers in securing their rights.

For the IUF, as the international trade union representing workers throughout the
food chain, this assessment is both needed and timely. Our affiliates need to engage
with FLO at national level from an informed basis – the impact assessment will serve
as both an information input and a tool to help develop constructive engagement with
FLO. It will give IUF the chance to ensure key issues are addressed in particular the
application of the criteria on freedom of association and the right to bargain
collectively and the impact of premium funds and joint bodies on trade union

The outcomes from the impact assessment study will contribute to policy discussions
between trade unions and the FLO and to the future review of the standard for Hired
Labour situations.

As the volume and value of Fairtrade sales grows across the world there is
increasing demand to measure and demonstrate the difference that engagement with
Fairtrade has had on participating producers and workers (and their families) in
developing countries, the producer organisation (PO), as well as the wider
community – in other words the impact that Fairtrade has had. This demand comes
from a variety of stakeholders:
    - Producers and producer networks
    - Traders and retailers
    - Consumers
    - Strategic partners: trade unions, funding donors
    - The media, academic institutions, political parties, etc

All stakeholders have a legitimate interest in learning whether the Fairtrade labelling
system is meeting its aims and objectives and improving the situation of plantation
workers and smallholder producers.

There is also a need to understand and communicate about the effectiveness of the
tools and processes used to achieve the objectives of Fairtrade labelling. Impact
assessment therefore also provides a useful and systematic way for producers to
work in partnership with the FLO and share knowledge of what has gone right and
wrong in the past and why, and to ensure that lessons are learnt and positive change
is effected.

Measuring Impact
In order to progress this work, an Impact Assessment Working Group coordinated by
FLO and comprising representatives from a number of labelling initiatives with a
particular interest in impact assessment has been convened. The Fairtrade
Foundation, Max-Havelaar France, Max-Havelaar Belgium and Max-Havelaar
Switzerland are involved in the workgroup and discussions have focused on

Fair Trade Network. The first was between FLO, FLO Cert and the IUF to address issues to do with freedom of
association, Fairtrade standards and certification, and issues relating to the role of Joint Bodies on Fairtrade-
certified plantations and the use of the Fairtrade Premium. The second was an internal ICTU/IUF trade union
conference held in Dublin with trade union representatives from Africa, Asia, Latin America and Europe as well as
a number of FLO representatives.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                       2
developing a shared approach and vision to conducting impact assessments such
that a FLO-wide strategy and methodology can be elaborated.

The Methodological Guide for Assessing the Impact of Fairtrade provides the basic
framework for designing the research methodology. It will be the responsibility of our
chosen research partners […] to further elaborate on the research approach and
develop the detailed methodology.

2. Aims and Objectives of Study
Fairtrade‟s vision is of a world in which all producers can enjoy secure and
sustainable livelihoods, fulfil their potential and decide on their future.

Our mission is to connect consumers and producers via a label which promotes
fairer trading conditions through which producers who are disadvantaged by
conventional trade can combat poverty, strengthen their position and take
more control over their lives

As stated in the summary documents of FLO‟s strategic review 2007/ 2008, Fairtrade
Labelling is committed to “strengthen its hired labour model to ensure that it
complements the work of others seeking to secure and enhance labour rights in the
Global South. In particular FLO shall develop a stronger partnership with
independent trade unions that are the best means by which workers can be
empowered to negotiate on a more equal footing with their employers.”

   1) This impact assessment has a specific focus on issues that directly impact
      the sustainable development and long-term benefits of workers, including, but
      not limited to, Freedom of Association, FLO Joint Bodies and Fairtrade
      Premium use, minimum prices2 and wages.
   2) The impact assessment will test the following hypothesis: the main Fairtrade
      tools (Fairtrade standards, Fairtrade Minimum Prices and Fairtrade
      Premiums, Organisational Support) have a positive impact on workers
      organizing themselves, on strengthening the position of local trade unions
      and on labour and living conditions of workers in tea plantations in India.

Therefore the overall objectives of the study are as follows.

    1) To understand the aims and objectives of workers in terms of living and
       working conditions, taking into account gender, seasonal and migration
       workers, occupational health and safety and the application of the Plantation
       labour Act.
    2) To assess the role that Fairtrade has played in helping workers progress
       towards their development goals and analyse how FLO can support workers
       more effectively to achieve their goals in the future
    3) To assess the impact that being part of Fairtrade (e.g. Joint Bodies, Workers
       Committees and Liaison Officers) has had on the role of trade unions within
       the organisation and in the region, on Freedom of Association and on
       Collective Bargaining capacities and outcomes.
    4) To analyse how the Fairtrade labelling system can best work with actors
       (trade unions, local government, NGOs, traders, etc) in the tea sector and
       along the supply chain to improve the impact of Fairtrade certification

  Although the impact study will also assess the effects of the Fairtrade Minimum Price on
living conditions of workers, it should be noted that in tea the minimum prices have only been
in 1 year ago and only for some tea varieties.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                     3
    5) To understand the aims and objectives of management in terms of
       sustainable development of the organisation and the workers, and to assess
       the role that Fairtrade has played in helping them progress towards these

3. Scope
Areas of impact

Considering the specific focus of the impact study, it is expected that all research
questions listed in the sections 1, 2 and 3 of annex 2 will be reviewed, that additional
questions are included as far as necessary and that answers are provided in as
much detail as possible.
The list of questions will be a starting point for discussions with workers and
management, in order to try and get a deeper understanding of the areas of impact
which are particularly important for them.

Although the impact study does not attempt to provide a complete analysis of every
single issue that is addressed in the Hired Labour standard (e.g. on the
environment), the researchers are expected to provide an overview of:
    1) The main changes in local and national development (see section 4 of annex
    2) The main changes in the management of natural resources (see section 5 of
       annex 2)

A gender and diversity perspective (e.g. seasonal and migration workers) will cut
across all levels of analysis and categories of impact to ensure that the viewpoint of
all socio-economic groupings comes through.

Improving impact
Because of the central importance of the learning and improving aspects of the study
it is very important that any impacts which are captured (positive and negative) are,
where appropriate, attributed to specific tools of the Fairtrade system. There are four
generic avenues of impact which should be explored3:

1. Producer standards - this looks at how the FLO hired labour standard has made
   an impact through the process of meeting compliance with the minimum
   standards for certification and the progress standards for continuous
2. Trade Standards - looks at how the key trading aspects of FT – premium,
   minimum price (as far as applicable), long-term trading relationship, advance
   payment – have impacted.
3. Organisational support and business development - this examines how support
   activities of FT organizations (e.g. FLO, Labelling Initiatives, ATOs) and other
   stakeholders (trade unions, NGOs and commercial actors) have impacted upon
   the development and strengthening of the workers and the organisation‟s
   capacity, skills and trade. It also looks at whether FT certification has helped the
   organisation facilitate contact with new buyers, attract new business and retain
   existing clients.
4. Networking - looks at how the development of the FT producer networks (i.e.
   NAP) and links with other network organisations has impacted upon workers and

  This builds on methodology developed in Ronchi, L. (2002) „The impact of Fairtrade on producers and
their organizations: A case study with Coocafe in Costa Rica‟, PRUS Working Paper 11, University of
Sussex: UK.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                            4
    the organisation, for example though sharing knowledge and experiences, and
    increasing their political influence.

Annex 1 provides some more information about the boundaries of the impact study.

It is anticipated that the study will broadly be delivered through three phases of work:

Phase 1: Desk Research
Prior to fieldwork a literature review will be carried out to gather background
information on India. This should include relevant details relating to the tea sector,
agrarian systems, labour and sustainable development.

Also during this phase, a desk review of documentation on each producer (including
pre-certification questionnaire completed by the producers, each inspection/social
audit report on the producers, minutes of certification committee decisions on the
producers and any other reports/profiles on the producers from FLO or ATOs) will be
conducted to ensure that there is a clear understanding of the financial, trading and
certification aspects of the producer‟s involvement with Fairtrade (as far as the
available information allows) including:
 The amount of product sold annually and the additional revenue received each
 The amount of FT premium received each year and how it has been used
 Wages/price received by producers and how they compare to market wage/prices
    in the country for that product area

From this work, we anticipate that background research will be developed which
 The country and tea sector context for each producer
 Changes over time in the numbers and types of workers involved in the producer
 Specific changes by the producer to meet the certification standard/s
 Information that describes what the organisation was like when first certified e.g.
   management structure, worker conditions etc.

This profile can then be expanded upon during the field research.

Phase 2: In-country field study
It is expected that the in-country studies will be conducted in collaboration with
appropriate researchers with a good local knowledge of relevant local issues and the
appropriate research skills. It is anticipated that the case studies with each producer
will be primarily qualitative in nature, based on a mix of semi-structured interviews
and focus group discussions with:
 A cross section of workers and their families
 Representatives of the producer organisation‟s management and board
 Trade union representatives
 Buyers/exporters that work with the producer
 Local FLO staff
 Other key informants (possibly including but not limited to village elders,
    community leaders, NGOs, government bodies, local academics and donor

6477f50b-0666-43e1-a7d9-a742689af187.doc                                               5
For qualitative data, it is expected that triangulation will be used to ensure robustness
of findings. However, for certain areas of impact the research team will, where
appropriate, supplement this qualitative data with quantitative approaches and
numerical data, e.g. surveys with a sample of the population in question (for example
to establish cost of living, wages, etc).

The study will also incorporate an examination of the livelihood opportunities (wages,
living costs, etc) available to workers who are not involved in Fairtrade and/or the tea
industry in order to get a greater understanding of the comparative impact that
Fairtrade has had upon participants.

The research team will be expected to draft an internal report for each producer
organisation. These will be circulated to the producer and the members of FLO‟s
Trade Union Working Group. The producer reports will not be made publicly

Phase 3: Aggregation of findings
During this stage of the study, the researchers will be expected to analyse and
aggregate the findings from the tea plantations.

A draft overview report will be prepared and shared with key stakeholders for
comment and revised accordingly before being disseminated more widely.

The final overview report will be anonymised, so that individual producers cannot be
identified. The final report will be made public following consultation and consent of

5. Expected Outputs
The researchers will be expected to deliver a range of specific outputs:
 Detailed methodology for the producer studies and the regional sector analysis
 Reports on findings from each producer study (details to be decided together
    with the researcher partners)
 Final overview report with an executive summary. The report should clearly
    describe the researcher‟s conclusions as to the impact of Fairtrade on the tea
    plantations and the regional tea sector and make recommendations to the
    Fairtrade labelling system and its stakeholders on how learnings from the study
    can be incorporated into the Fairtrade labelling system
 The research partners will provide an update every 2 weeks to the project
    coordinator to clarify the status of the project: activities carried out, activities
    planned, timelines, etc.
 Present the research methodology during the stakeholder workshop in India in
    week 47 of 2009.
 Present the draft report at a stakeholder conference in India during the Spring in

In addition to the deliverables mentioned above the final report shall also include
the following items:
       Description of tasks
       Description of approach
       Listing of consulted stakeholders
       Executive summary of the proposed solution(s)
       Evaluation of stakeholders‟ acceptance and possible concerns

6477f50b-0666-43e1-a7d9-a742689af187.doc                                               6
Invoices shall be sufficiently detailed to check against the budget agreements
and against actual expenses.

6. Timeline
It is difficult to give a detailed timeline at his stage but it is anticipated that the tea
plantations will have been selected by October and that the field work can start in
December with delivery of the draft report expected by April or May 2010. A final
report that is signed off by the producers is submitted by July 2010.
A more detailed timeline will be set out alongside the methodology. The research
partners finalize the research methodology by 30 October 2009 and present it during
the stakeholder workshop in week 47 of 2009.

7. Confidentiality
The success of the study depends upon the trust built between the researcher, the
FLO system the workers and managers within plantations. Many potential informants
will not be willing to release information unless they feel confident that the risk of that
information subsequently being used against them is reduced to an absolute

For these reasons, the research partner will be required to adhere to the following
confidentiality rules:
 In all cases, the safety, integrity and interests of individuals, and the commercial
  interests of companies, shall be protected.
 To ensure this, no information which is attributable to a particular individual or
  company shall be made available beyond the immediate research team and the
  FLO system (including the Trade Union Working Group).
 All individual members of the research team will be required to sign a
  confidentiality agreement. Further details about FLO‟s confidentiality policy are
  specified in the contract to be agreed between the researchers and FLO.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                 7
Annex 1

1. Boundaries of the Impact Study

Given the complex nature of the tea sector and inevitable resource constraints it is important to have clear boundaries about what will and won‟t
be included in the study. Some of the issues that fall outside of the scope of this study:
 Although the study will look at other livelihood opportunities it will not provide an exhaustive comparative analysis of Fairtrade versus other
   livelihood options. Nevertheless, the researchers are expected to explore different possibilities for comparing Fairtrade versus non-Fairtrade
   livelihoods, e.g. visiting Fairtrade applicants, review pre-assessment data, analyzing the findings of studies that focus on non-Fairtrade
 While the study will seek to capture information regarding other inputs available at the local level for example aid funding and support
   programmes it will not attempt to provide a detailed comparative analysis of the benefits of Fairtrade versus these other inputs
 While the study will describe the local tea sector in detail, in particular on wages, local prices, the creation of jobs, working conditions on
   other estates, and so forth, the study will not extensively assess the impact of Fairtrade on the local tea sector.
 While the study will explore how the practices and behaviour of stakeholders along the tea value chain (e.g. retailers and exporters) impact
   upon workers and the organisation, the study will not seek to provide a comprehensive comparison of Fairtrade and conventional supply
   chains over time
 National level impacts will be assessed but largely through key informant interviews rather than empirical data
 While the study will assess producer development over time, it will not seek to be a longitudinal assessment of impact or to measure impact
   in relation to a baseline assessment.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                                       8
    ANNEX 2 Guiding framework of research questions for Hired Labour Situations

    This Annex includes a non-exhaustive list of questions for workers which will be used as an aide memoire by the researchers. It will help guide
    discussions but does not prescribe the areas of enquiry.
Research Questions for Hired Labour situations                                    Relevant data

1. Changes in the social structure
   What type of households benefit from Fairtrade in the region?                                                        Type of households involved in
      What types of workers participate in Fairtrade (permanent, seasonal, casual, migrants, etc)? What are the         Fairtrade
         socio-economic demographics of their households?
      How do Fairtrade workers/households compare with other producers/households in the region and country?
   Is Fairtrade beneficial for all social categories (e.g. men and women, young and old, ethnic minorities, etc)        Social status of household members
    equitably? Does Fairtrade reduce, replicate or increase social inequalities?
2. Changes in the socio-economic situation of workers and their households
   Does the guaranteed minimum price (where it exists) and other Fairtrade trading standards permit a better            Profitability of estate
    profitability for the estate? Does Fairtrade guarantee access to preferential markets? What influence does this
    have on the motivation of owners to participate in Fairtrade?
   Does Fairtrade help improve the economic situation of workers through improved salaries and/or other financial       Worker income
    work-related benefits (e.g. bonuses, maternity or sick pay, etc)?
   Does the income earned by Fairtrade workers allow their households to:
    — Meet their basic needs (food, clothing, housing, healthcare and education)?
     Save money and make additional investments?
   Does Fairtrade help improve working conditions (contracts, social security, working hours, fair treatment etc)?      Working conditions
   Does Fairtrade improve the health of workers as a result of promoting occupational health and safety?                Worker health
   Do the Fairtrade standards and/or Premium use contribute to improvements in the standard of living of workers        Standard of living
    and their households (housing, health, education etc)?
   Does Fairtrade help stabilise workers‟ employment and income? As a result, does it allow greater investments in      Security and vulnerability
    education, health and pensions for workers and their households?
   Does Fairtrade allow workers‟ households to make investments in other economic activities?
   Does Fairtrade help maintain young people in rural areas and avoid long-term migration? If migration occurs, is it
    linked to processes of capitalisation supported by Fairtrade (e.g. investments in education, savings etc)            Levels of migration

    6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                                                  9
3. Changes in the organisation of workers
   Does Fairtrade help to structure or strengthen trade unions?                                                      Structure and legitimacy of trade
   Does Fairtrade help to improve the legitimacy of trade unions with management and others stakeholders?            unions
   Does Fairtrade encourage the formation of alternative forms of worker organisation (i.e. parallel means), other
    than Joint Bodies? Does this support or undermine the position of trade unions in the region?
   Does Fairtrade help improve workers' negotiation power? With regards management? At a local level?                Worker organisation negotiation
   Does Fairtrade contribute to strengthen workers’ negotiation capacity for collective bargaining?                  capabilities
   Do workers have access to FLO standards and inspection reports? Do they use them in their negotiations with
    management? Do they participate in addressing corrective actions?
   Is access to means of production (land, water etc) part of worker demands in their negotiations with
   Does Fairtrade improve the management capacity of worker representatives to be able to participate actively in    Worker organisation management
    a Joint Body? In a trade union? In other forms of worker organisation?                                            capabilities
   Does Fairtrade contribute to strengthen workers’ ability to participate and request transparent decision-making
    processes from their representatives in the Joint Body or trade union?
   What legitimacy does the Joint Body have with workers?                                                            Legitimacy of Joint Body
   Does Fairtrade help to develop a common perception among workers on priority needs of different social groups
    living in their area?
   What legitimacy does the Joint Body have with the communities affected by expenditure of the Fairtrade
   Does Fairtrade contribute to the active cooperation of worker representatives with other local stakeholders for
    the realisation of projects to improve community services?
4. Changes in local and national development
   Does Fairtrade contribute to maintaining or even creating jobs in the local area (temporary labour, new services Employment opportunities at local
    etc.)? Are these jobs attractive for local residents?                                                            and national levels
   Does Fairtrade influence wages paid by other employers in the region? Does it influence working conditions on
    other estates outside Fairtrade?
   Is Fairtrade used as an income complement for smallholders in the area (as temporary or seasonal workers)?

    6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                                              10
   Does Fairtrade contribute to the creation, maintenance or strengthening of public and community services in       Access to services at local and
    the local or regional area?                                                                                       national levels
     Does Fairtrade improve the participation of individual workers in the decision making processes in their
        villages and living area (as citizens, parents of students, members of churches etc)?
     Does Fairtrade encourage national or decentralized public institutions and private organisations to support
        local activities and services?
     Are activities and services financed by Fairtrade supplementary or complementary to public sector support?
   Does Fairtrade contribute to the development of new economic activities and initiatives at the local level        Economic initiatives at local and
    (individual or collective)?                                                                                       national levels
   Are workers organisations in contact with others organisations? Does Fairtrade facilitate the exchange of         Political influence of worker
    experience and best practice among worker representatives (in trade unions and Joint Bodies)? Are networks        organisations
   Does Fairtrade help to strengthen trade unions and workers’ leaders in their ability to defend the interests of
    the rural workers at national or even international levels and to influence public support policies?
   Does Fairtrade help restructure the distribution of value and power in international trade?                       Restructuring of global trade
      Does it promote long term and mutually supportive relations between actors in international trading chains?
      Does it allow a higher proportion of value added to remain in producer countries?
   Does the development of estates take into account agricultural policy issues in terms of food self-sufficiency,   Food sovereignty
    access to resources for small producers and local development?
5. Changes in the management of natural resources
    Does Fairtrade contribute to the production of high quality products, reflecting standards and norms for Quality and sustainable agriculture
     sustainable agriculture?
   Does Fairtrade make more sustainable management of natural resources possible? Limiting soil erosion? Good  Soil and water management
    management of soil fertility? Good management of water resources?
    Does Fairtrade limit over-use of chemical products?                                                        Fertiliser and pesticide use
    Does Fairtrade help promote the use of biological control mechanisms (e.g. farmer trials, best practice
     exchanges between producer organisations etc)?
    Does Fairtrade contribute to the development of more environmentally respectful and autonomous production Environmentally friendly
     methods?                                                                                                  management

    6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                                              11
Annex 3

1. Background

In 2008 more than 11,000 MT of tea were purchased under Fairtrade conditions from certified producers and more than 80% was bought by
importers from the UK. The Fairtrade market is doubling every year, with the UK, Canada and Australia/ New Zealand as the biggest
growers. 11% of the Fairtrade Teas are double-certified: i.e. Organic and Fairtrade. In the Uk this is considerably less (below 4%).

Product          Unit            Conventional       Organic     Total 2008 Growth Ratio
Tea              MT                    9,515          1,952        11,467        112%

Product         Unit       LI            Conventional Organic         LI Total           Growth Rate
Tea             MT         AUS/NZ                  25           98                 123          514%
Tea             MT         Austria                              12                  12          -24%
Tea             MT         Belgium                 29                               29           45%
Tea             MT         Canada                  68           203                271          215%
Tea             MT         Denmark                  2            31                 33           63%
Tea             MT         Finland                 20                               20            6%
Tea             MT         France                  65           367                432           33%
Tea             MT         Germany                 66           136                202            2%
Tea             MT         Ireland                171             7                178           23%
Tea             MT         Italy                    8            11                 19          -13%
Tea             MT         Japan                    0            21                 21           61%
Tea             MT         Luxemburg                0             1                  1          -24%
Tea             MT         Netherlands             44            33                 77           11%
Tea             MT         Norway                   0            13                 13           57%
Tea             MT         Spain                    3             3                  6           18%
Tea             MT         Sweden                  27            36                 63           74%
Tea             MT         Switzerland             15            25                 40          -82%
Tea             MT         UK                   8,972           358              9,330          149%
Tea             MT         USA                      2           598                600           33%

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Grand Total        MT                                         9,515            1,952          11,467            112%

According to FAO China and India are the largest producers of tea in the world: together they count for more than 50% of the world tea
production(non-Fairtrade and Fairtrade).

Rank                               Area                               Production (in 1000 USD) Production (in MT)
1                                  China                              1281153                  1183502
2                                  India                              1027540                  949220
3                                  Kenya                              400095                   369600
4                                  Sri Lanka                          330403                   305220
5                                  Turkey                             223170                   206160
6                                  Vietnam                            177531                   164000
7                                  Indonesia                          162619                   150224
8                                  Japan                              101864                   94100
9                                  Argentina                          77940                    72000
10                                 Iran                               64950                    60000
11                                 Bangladesh                         63326                    58500
12                                 Malawi                             49795                    46000
13                                 Uganda                             37887                    35000
14                                 Tanzania                           33882                    31300
15                                 Myanmar                            29227                    27000
16                                 Zimbabwe                           24139                    22300
17                                 Rwanda                             20567                    19000
18                                 Mozambique                         17597                    16256
19                                 Nepal                              16419                    15168
20                                 Papua New Guinea                   9742                     9000

Currently FLO has certified 78 Tea producers4; 46 of them are certified according to the Hired Labour standard. In India, 16 of the 18 tea
producers that hold a Fairtrade certificate are registered as a Hired Labour set up (either as Multi-estate or as a single plantation).

    71 producers are certified exclusively for tea. The other 7 producers are also certified for 1 or 2 additional products.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                               13
Number of tea producers certified per country
                Number of Producer
Country         organisations
Burkina Faso                     2
China                            4
Egypt                            3
India                           18
Kenya                           16
Laos                             1
Malawi                           4
Rwanda                           1
South Africa                     4
Sri Lanka                       12
Tanzania                         7
Uganda                           4
Vietnam                          2
Grand Total                     78

Number of certified producers per Set UP in All Regions
                                     1st          2nd         multi-                 Grand
Product                              grade        grade       estate      plantation Total
Grand Total                                  31           1            12         34         78

Number of certified producers per Set Up in India
                          multi-                 Grand
Product        1st grade estate     plantation Total
Tea                    2          6          10        18

The following figures are based on tentative results of the Monitoring and Evaluation (M&E)study that took place in April/ May 2009:

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                               14
In 2007 almost 50% of all workers employed on Fairtrade plantations were working on tea plantation: mostly in Southern Asia and Eastern
Africa. 14,000 of the 49,000 tea employees are working on plantations in India. In India almost 60% of the employees are women; this is
significantly more than on tea plantations in other countries (average of 41% women).

In 2007 Fairtrade tea producers (both Hired Labour and Small Producer Organisations) sold 10,000 MT of tea under Fairtrade conditions. In
total the tea producers recorded a production capacity of more than 95,000 MT, of which 45,000 MT were produced by Hired Labour
organizations. Of the 45,000 MT, approximately 7,200 MT, were sold under Fairtrade conditions (Small Producer Organisations sold less than
3,000 MT as Fairtrade). The tentative results of the M&E study suggest that the average plantation was able to sell 16% of its total
production volume as Fairtrade. The average price that plantations received for Fairtrade certified tea was approximately 2,600 EUR per MT
or 500 EUR more than the small tea producers. Indian tea plantations received on average 2,300 EUR per MT (prices differ considerably
because the qualities of tea are very different).

Employees of tea plantations received 940,000 EUR in Fairtrade Premium in 2007. 270,000 EUR was received by people working on tea
plantations in India. Most of the Fairtrade Premium was spent on projects benefitting the broader community. Other popular premium
projects included education and career development.

Selection of producer partners
It is assumed that it takes time for producers/workers and their organisations to see any significant impact of participation in Fairtrade. For
this reason only those tea plantations that have been FLO-certified for three years or more will be invited to volunteer to participate in this
impact assessment.

Further analysis and consultation is required, particularly with the FLO Producer Business Unit and the Asian Producer Network in order to
identify appropriate producer organisations which wish to, and are suitable to, participate in this study.

The FLO is aware that the Fairtrade Foundation (a partner organisation of FLO) is also doing an impact study on tea in Malawi. DFID, a
British aid agency, has commissioned an impact study on tea producers in Africa, comparing Fairtrade production with that of other ethical
Finally, the Trade Union Working Group, which is closely involved in the designing of this project, is planning on organizing additional Hired
Labour impact studies in both Africa and Latin America. Although all projects are managed independently, it is expected that some linkages
between the different researchers shall be established, especially with researchers who work on projects that are initiated by the Trade
Union Working Group. Upon agreement with the project coordinator, learnings should be shared with the other researchers.

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                                    15
Further information about the producer organizations that participate in this study will be provided after signing a confidentiality
agreement. Internal documents about the Fairtrade system, e.g. concerning the tea price review, will also be made available in due time.

General Information about the Fairtrade system, includingprinciples of Fairtrade and how they are applied in practice, are available on
the FLO website:

6477f50b-0666-43e1-a7d9-a742689af187.doc                                                                                             16

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