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Fairtrade practice - what does it mean and why should it matter for macadamia nut farmers?

Fairtrade has been built on key commodities like coffee, tea and sugar with brands like CafeDirect or Divine chocolate that you may be familiar with.  

Coffee and sugar have been flagship crops because they are predominantly grown by smallholders all around the world and have been traded as commodities.  

Coffee opened a window into the world of commodity trading and offered farmers a vision of a more level playing field where those who drink coffee care both about the quality of the coffee but also about the people who grow the crop.

Nuts came to Fairtrade quite late and are still a poor relative. The nut standards were introduced in 2004 and covered tree nuts and peanuts (a legume and not strictly a nut).  

With an increasing interest in healthy eating and the way our food is produced, where and who it comes from, and whether it has been ethically sourced is becoming more important to us all.  

In this week’s blog post we explore why Fairtrade practices matter to nut farmers and will focus on macadamia which has not yet broken into the Fairtrade market properly yet.

What is the purpose of Fairtrade? 

Ideally, Fairtrade should:

  1. Provide smallholder farmers and their cooperatives with access to value-added markets with links between the farmers and their customers.
  2. Put the farmers’ needs central to their farming, trading and marketing activities.
  3. Enable them to access finance during their growing and trading season rather than after harvest or when the crops are delivered to the market.
  4. Build trusting relationships along the value chain so that the chain as a whole benefits from the trade and the farmers are not marginalised.

The Fairtrade standards for macadamia were established in 2004 but apart from a few years following their first exports the farmers in Malawi have not been certified. 

The main reason is that with tree crops it takes time before there is enough crop for the farmers to sell and for their cooperatives to market.  The cost of certification is only viable when there is sufficient trade for the costs to be covered.  

Nutcellars is working with the farmers in Malawi to build up those volumes so that the full benefits of fair access to markets and trade finance through can be achieved.

Introducing nuts into the fairtrade world

This has shone a light on trading practices which were much more opaque than coffee, sugar or tea. 

For nuts, there are no equivalents of the coffee exchange or tea auctions. Smallholder nut farmers’ fair access to value-added markets was, therefore, more difficult to achieve. However, by trading, it is possible to identify market access constraints and ways to address these.

Fairtrade nuts

Each nut has its own characteristics and provenance.  

  • Brazil nuts grow in the Amazon and are high in Selenium – an important nutrient for men’s health.  
  • Cashews have been cultivated in hot, humid, and coastal areas of the world for centuries. 
  • Peanuts used to be a major export for smallholders in Africa but a lack of investment in quality to reduce the risk of aflatoxin led to the crop being dominated by the US, China and Argentina.
  • Macadamia is tiny by comparison accounting for 4% of nuts traded globally but is becoming increasingly important to smallholder farmers in countries like Malawi. 

Macadamia and Fairtrade

Macadamia from Malawi has been included in some UK retail Fairtrade nut products since 2008 but the costs of certification were not sustainable in those early days. Farmer cooperatives have formed in most regions of Malawi and they are members of a cooperative union, HIMACUL. There is hope that the volume of macadamia traded will become sufficient to cover the costs of certification and allow farmers access to value-added markets with premiums that can benefit the farmers and their communities.

What are the principles and practices of trading with nut farmers?

In striving to achieve Fairtrade status, HIMACUL and Nutcellars are working to ensure that fundamental principles are core to what we do. 

The cooperatives are provided with crop finance to allow the farmers to be paid as the crop is harvested between December and June each year. 

The last ten years has allowed the trading partners to build a trusting relationship where information about the production and market is shared.  

We have had a long-standing agreement with Thyolo Nut Company, who crack, sort, and grade the nuts to the highest international food standards.  

Finance for all trading activities in the value chain is secured in partnership with ETICO who have a similar working relationship with sesame and coffee farmers in Nicaragua.

Why do these practices and principles matter?

Trusting trading relationships take time and care to establish. Our approach is horizontal rather than vertical. 

Your care for what you eat and its provenance is mirrored by a desire by the farmers to produce the best quality macadamia nut in the most efficient way possible, in order that they may realise their hopes and aspirations for themselves and their families. 

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