FAIR PRICES FAIR WAGES PLENARY SESSION FOR WFTO

FAIR PRICES FAIR WAGES PLENARY SESSION FOR WFTO EUROPE JUNE 24, 2014

My contribution • Quick summary of research • What has EFTA done so far • Relation EFTA - WFTO

WHY RESEARCH ON FAIR PRICES FAIR WAGES? • Crucial to fight poverty • Key principle of Fair Trade • Consumer expectations are living wages • Outcome EFTA assessments • Lack of clear definition • Credibility of Fair Trade

CONCLUSIONS DEFINITION LIVING / FAIR WAGE • Not re-invent the wheel • There is no single definition or benchmark • Use other benchmarks • Workers, artisans and farmers must be consulted • Step by step approach

WHAT DO ARTISANS RECEIVE CURRENTLY? • At or around local statutory minimum wage • Several sources of income needed • Regular orders needed

IMPACT OF FAIR WAGE ON PRICES • Lower than expected • Avoid escalation of price up value chain • Improve efficiency • Improve productivity • Transparent costing and pricing

CHALLENGES TO IMPLEMENTATION • Impact on prices • Commercial sustainability • How to avoid excluding poor informal workers

HOW TO IMPLEMENT FAIR WAGES? • Formalise policies • Commitment • Transparent and objective price-setting • Consultation artisans • Regular monitoring • Agreed plan for improvement

WHAT CAN BUYERS IN THE NORTH DO? • • Capacity building Control internal costs Reduce value chain costs Minimize price escalation from VAT and other • Increase efficiency • Identify mainstream markets

WHAT CAN SUPPLIERS IN THE SOUTH DO? • Recognize importance • Adopt recommendations of research • Consult artisans

RESOLUTION FOR AGM 1. Priority for coming years 2. Set up working group 3. Priority for regional bodies and conferences 4. Report to next biennial conference

WHAT HAVE EFTA AND ITS MEMBERS DONE SO FAR

EFTA ASSESSMENT ‘TRAFFIC LIGHTS” CLARIFIED Green – the organisation meets the standard = pays a living wage to all producers for all products they make Yellow – the organisation largely meets the standard - there are some minor gaps = minimum wage Orange - there are some major gaps = below minimum wage Red - the organisation does not meet the standard and has no willingness to change

EFTA’s TOOL ON LIVING WAGE • Used tool based on SA 8000 • Adopted simplified tool of DAWS • EFTA would prefer target of 2. 300 calories instead of 2. 100 calories

EFTA’s TOOL ON COST CALCULATION • EFTA uses cost calculation sheet for suppliers to calculate what producers earn • Working on questionnaire re extra payments like pension, transport allowance etc

EFTA MEMBER’s WORK • Various EFTA members do survey (Gepa, EZA, Tc) • Members share experiences • Consultant was invited • Managers and buyers of members are encouraged

EFTA’s POLICY • Living wage is the aim • Step by step approach • Focus on how to support producers and exporters to achieve living wages • Temporary until WFTO has clear tools

RELATION EFTA – WFTO ON FAIR PRICES FAIR WAGES • Welcomes WFTO WG • Member of EFTA Monitoring Group is in WFTO Group • Willing to share all experience, expertise, tools • Intends to adopt WFTO System when ready

EXPECTATIONS RE WFTO • Clear definition • Common tools • Database minimum wages and living wages

Thank you for your attention! EFTA efta@antenna. nl Tel: 0031 43 4591504