The financial impact of fairtrade certification on small-scale producers in Kenya: a case study of Changoi self-help group in Kericho
Koske, Pauline C
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This study addresses the question of whether Fairtrade - and in particular Fairtrade tea - has the potential to be used as a comprehensive tool for poverty reduction and, if so, whether it has had a positive financial impact on smallholder tea growers. To do so, this study assesses the perceived benefits of Fairtrade certification schemes in the Kenyan tea industry, and specifically in Kericho County. Fairtrade seeks to lessen the burden for poor fanners by securing them a stable income and a more friendly business environment. It does this by guaranteeing a fixed minimum price and a range of other benefits. In exchange for that and for compliance with a set of rules and standards, companies can use the Fairtrade label on their products. The study explores the challenges and opportunities on three levels: theory, literature and quantitative analysis of smallholder data through a survey of 100 respondents. The working of Fairtrade is studied in relation to a wide variety of theories on economic development. The data collected was analyzed using SPSS statistical program. Descriptive statistics was used to compare the responses of the Changoi small-scale fanners to a number of issues relevant to the study to identify the significance between Fairtrade certification and financial empowerment. The study fmds that Fairtrade certification has had a positive financial impact on the smallholder farmers in Changoi. My findings can be grouped into the following: The Fairtrade minimum price, access to credit, the social premium, economic and social stability and the benefits of organizing. In the case of the observed Kenyan farmers, the main conclusions are that Fairtrade affiliation seems to be associated with superior capabilities, economic and social wellbeing. In the project that was investigated, Fairtrade is definitely responsible for crop diversification, creation of an additional trade channel and higher price satisfaction of marginalized producers. Overall, the findings seem to indicate that FT works quite well in the static perspective and that its specific features directly contribute to the improvement of farmers' wellbeing. The recommendations made therefore are strengthening of farmer associations to improve participation, more focused marketing of Kenyan tea, improvement of farmers' welfare and sensitization to bring awareness of the benefits of Fairtrade.