Fair Trade and sustainable rural development: case studies on the role of producer companies in India
Sustainable development has acquired a new thrust with the focus on the Sustainable Development Goals (SDGs) by the United Nations. At the same time, there are many public and private sustainability standards in the food and fibre sector which address sustainability, such as organic, ethical, and Fair Trade as market-based systems. This paper assesses the impact of Fair Trade on the SDGs at the local level in terms of income of the producers by considering both Fair Trade and Non-Fair Trade farmers in the specific context of the producer companies involved in Fairtrade-Certified peanut production and its marketing in Gujarat, India. It was found that Fairtrade provided an alternative outlet for farmer produce though it had poor impact in terms of uptake of Fairtrade-Certified produce and prices delivered were low compared with those in existing channels. On the other hand, worker issues were not addressed due to the prevalence of labour tenancy in the study area.
Agricultural marketing reforms are central to changing the agricultural/agribusiness sector. The Amended APMC Act in India, which permitted contract farming, direct purchase from farmers, and setting up of private wholesale markets, was seen as the way forward to kick start the process of modernizing markets and giving better market access and choice to primary producers. The practice of contract farming, which is one of the new institutions as a result of the policy reforms, leaves much to be desired in India's smallholder context as there is exclusion of small farmers who make up most of the farming population. In this context, this paper examines the extent and nature of small producer exclusion, reasons thereof, and various policy options to encourage more inclusive and effective contract farming so that these mechanisms could be leveraged for inclusive and market-oriented sustainable agricultural development.