Date:11/01/2006 URL: http://www.thehindubusinessline.com/2006/01/11/stories/2006011102510800.htm

Back `Fair trade movement gaining momentum'

Priyanka Jayashankar

Chennai , Jan. 10

INSPIRED by the motto `Trade not aid,' more NGOs are promoting fair trade products made by marginalised groups, targeting mainly European and North American buyers.

Chennai-based International Foundation for Fairtrade and Development (IFFAD) has tied up with several cooperatives and traditional artisans across the country. IFFAD is a not-for-profit and registered fair trade organisation.

From a cotton hammock woven by a poor artisan to jute bags produced by disabled women, each lifestyle product at IFFAD has a story of economic struggle to tell.

As Mr S.C. Raghunathan, Programme Co-ordinator, puts it, "Fair trade players are the conscience keepers of the commercial world." IFFAD levies a 25 per cent service charge to cover shipping and logistics costs. It gives greater thrust to products made by NGOs and charity groups. SEWA (Self-employed Women's Association) of Gujarat, Auro Pooja (a unit run by fishermen in Pondicherry) and a sister organisation of Gandhigram are among its partners. The organisation mostly deals with made-ups, home furnishing and handicrafts.

"Many of our foreign clients prefer traditional Kalamkari motifs," says Dr V. Purushothamam, Director, IFFAD. While its food products have got Fairtrade Labelling Organizations International (FLO) certification, IFFAD is in the process of getting it for its other lifestyle products.

IFFAD's suppliers, most of whom are inexperienced in running a business, participate in the product development and design workshops it organises. Capacity building, cost reduction, marketing and entrepreneurship programmes are also conducted at a grassroots level. Overseas clients usually send in designs of their choice and most of the products are made to order. IFFAD plans to supply its lifestyle products to corporates and home furnishings to five-star hotels. It is hopeful of doubling its revenues from $100,000 to $200,000 this year.

The organisation is also collaborating with importers such as 10,000 Villages (backed by the Mennonite Church) and SERRV International (a Catholic group) in the US. "These groups run retail units on a non-profit basis and they are promoting fair trade goods across university campuses," says Dr Purushothamam.

Major online retailers in the US such as Novica have also started selling fair trade products. Fair trade businesses have to adhere to higher standards of wage payment and environmental protection. With the `social premium' factored in, the prices of fair trade goods are higher than the market rate.

But many `trade justice' enthusiasts abroad are willing to foot bigger bills for a good cause.. `Third world shops' selling fair trade goods are a draw in the UK, adds Dr Purushothamam.And that's not all. The fair trade market worldwide is estimated at $1 billion, which is a 1 per cent share of world trade. Though the market share of fair trade products is minuscule in India, some big department stores in Mumbai have started to stock such goods.