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What makes Fairtrade Premium: A minimum wage - and more - for tea producers

By Rachel Arthur contact

- Last updated on GMT

Related tags: Tea, Fair trade

What makes Fairtrade Premium: A minimum wage - and more - for tea producers
As the tea market evolves with RTD teas, herbal infusions, new markets and more: so must Fairtrade International’s activities in the industry.

The organisation - whose work is based around its mission of promoting fairer trading conditions and helping producers combat poverty - is working on improving the offer in domestic markets such as India and Kenya. 

Meanwhile, herbal infusions are attracting considerable interest from consumers, while the growth of the RTD market means practices behind both tea and sugar need to be considered. 

Malawi floods

Fairtrade goods have a minimum price for tea, which is set to cover the cost of sustainable production (according to each region). This acts as a ‘safety net’ for farmers, to protect them from fluctuations in market prices. 

A second part of standards is the Fairtrade Premium, an additional sum of money which goes into a communal fund. Workers then decide what to use this money for (for example, in 2013, tea plantation workers spent 11% of this money on education, while other projects could include improving infrastructure or healthcare). 

Lee Byers, global product manager for tea and coffee, Fairtrade International, told BeverageDaily.com that Malawi (one of the biggest producers of fair-trade tea) is a prime example where Fairtrade standards can make a big difference to workers and their families.

A Fairtrade report published last June showed the difference between the minimum wage and living wage for workers on tea plantations in the country was ‘substantial.’

The country was then hit by the worst floods for four decades earlier this year, leaving hundreds dead, 200,000 displaced, and tea plantations destroyed. 

“Malawi is a very poor place - it’s one of the poorest countries on the planet,” ​said Byers.”They had huge floods in January, and people are living in tents. It doesn’t take a huge amount of money to make a significant difference.”

Fairtrade is working with partners such as Oxfam and the Ethical Tea Partnership to address conditions in the country. 

“The idea is that no one company or NGO can fix this on their own,” ​Byers said. “The view is that there many be an opportunity to show what ‘good’ looks like with a concerted effort and investment in Malawi.”

Beyond Malawi: assessing the tea market

Fairtrade International reports there are 95 producer organisations with Fairtrade certification spread across 12 countries. Kenya, Malawi, Sri Lanka, Uganda and India (where more than half the organic production capacity of fair-trade tea is) are the biggest producers of fair-trade tea. Recent new origins include Nepal and Indonesia. 

“In each of our different consumer markets we will have a local team, who will be looking to work with local companies to develop products that are Fairtrade,” ​said Byers.

“We’re now looking at developing opportunities for Fairtrade in domestic markets. There is now an operation in Fairtrade Foundation in India - there’s a huge opportunity to sell under the Fairtrade mark there. It’s the same in Brazil, same in Kenya, and South Africa.”

Fairtrade does not just cover black tea; Byers sees growth in other varieties.  

“We have, in addition to black tea, Fairtrade herbal teas, the main ones being rooibos, hibiscus, peppermint and camomile,” ​said Byers.

“Generally speaking, we see a lot of growth in the infusions market. Herbal infusions have no caffeine, both men and women drink them but they appeal to women in particular.”

Related topics: Markets

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