Review Thethresholds of the Indicators for Spos in Banana in DR, Ecuador and Colombia

Review Thethresholds of the Indicators for Spos in Banana in DR, Ecuador and Colombia

Project Assignment
Stakeholders are invited to comment on this draft version until 14/March/2016by filling in the project assignment feedback form and sending it to the project manager listed below. Your comments will be considered before the final project assignment is agreed upon.
Management of plantationsandreview of indicators values : BananaSPOs in Ecuador, DomRep & Colombia
This project assignment contains the most important information about the project. For additional information on the project, please contact the project manager (contact details can be found below).
The project will be carried out according to the Standard Operating Procedures for the Development of Fairtrade Standards. More information on these procedures can be found on the website:
Rationale for and justification of need for the project:
The Fairtrade standard for Small Producer Organizations (SPO) is intended to facilitate trade from organized setups of small farmers and includes adefinition of ‘small producer’ based on use of labour, income from farming, time spent on farm and cultivated area. However, the standard provides possibility of upto 50% of the members in the organization composed of members who do not comply with this definition of a small producer. Some products under Fairtrade are restricted for Hired Labour (HL)setups and this provides protection to SPOs from competition from large farms (plantations). SPO standards are less stringent in comparison to the HL standards on the labour requirements, since it is generally acknowledged that SPOs have different economic and organization capacities, when compared with HL. Stakeholders have reported an increasing prevalence of plantations becoming members in an SPO taking advantage of the 50% rule. This is reported to more prevalent in the banana producing SPOs in Ecuador and Dominican Republic. This is perceived negatively by many SPOs formed exclusively of small producers (often referred as genuine SPOs) and other stakeholders, who believe that it creates undue competition to genuine small producers for the Fairtrade certified market, since the plantations have better resources than small farmers and take away the share of market for SPO, when these can be certified separately under HL standard. This is also perceived as a way of avoiding a stringent HL standard for labour requirements thus providing for less protection to workers, which would have otherwise provided by a HL certification.The workers of plantations, included in an SPO get lower benefits from the Fairtrade premium, when compared to those in the plantations certified as under HL standard. In an HL setup, the premium is owned by the workers, who handle it, while in SPO the premium belongs to the small farmers. This project is envisaged to understand the extend of the prevalence of plantations in SPO setups producingbananas in Ecuador and Dominican Republicas a test case and to propose way and means to manage the perceived risksto small producers and workers.
Fairtrade International took over the responsibility for determining the indicators for SPO from FLOCERT and published a set of revised indicators for average number of workers and farm size for Dominican Republic (DR), Colombia and Ecuador on 03.08.2015. The changes are applicable from the 1 Jan 2016. The land area threshold for a small farmer was fixed at below 8ha for mono culture in these three countries. The limit was set at 20 ha for agroforestry systems in Ecuador. The number of permanent workers per hectare, was set at 1.5 for DR and 0.9 workers/ha for Ecuador and Colombia.Stakeholders had recently expressed their apprehension on the effect on the profitability of the SPOs, with the reduction of the land area in the indicators (from 10 ha to 8 ha) and requested the suspension of the application of the revised indicators. However, it was decided to not suspend the changes and take a relook at the values of the indicators along with the issue of plantations in SPO and increase the scope of discussion and research and advice the SC for a suitable decision. Moreover, the decisions on plantations could potentially have an effect on the indicators and it is best to study these issues together in these countries.
Risk assessment:
The risks on this project are related to:
-There could be strong opposition from plantations or the SPOs to which they belong, to changes in their certification requirement.
-Plantations are legal members of SPO and the reluctance to exclude them would jeopardize the certification of the respective SPO.
-Difficulties in fixing the boundaries of definition between small, medium and large farms (plantations) due to large number of factors affecting the profitability of a small farm
-Changes in values of indicators or fixing boundaries for farms could increase the incidence of artificial splitting of ownership of farms for compliance to the standards. / Mitigation
-Consultation withaffected producers and their networks through the project
-Find solutions with minimum effect on legal status of existing organization and allow a transition phase for affected organizations
-Include into study the established and published reports of governments, national and international organizations on farm economics for determining farm size The issue of artificial splitting is a generic phenomenon in SPOs and needs a wider consultation and is proposed to be included in the full SPO standard revision planned later in 2016
Project startevent:
Publishing ofthe PA for feedback / Project start date:
29Feb 2016
Project end event:
Relevant requirements revised. / Project end date:
Project goal and objectives
  • To study the prevalence of plantations in banana SPOs and their competition to small producers and revise the fresh fruit standard (banana section) to deal with the competition
  • Determine the best approach to ensure workers in these plantations are covered under appropriate labour requirements under Fairtrade Standards
  • Review thethresholds of the indicators for SPOs in Banana in DR, Ecuador and Colombia.
Specific objectives
  • Quantify the extend of prevalence of plantations in Banana SPOs
  • Define the size or number of workers, for a banana producer to qualify as a “banana plantation”
  • Propose changes in the fresh fruit standard (banana section only) to reduce competition from plantations in SPO and ensure protection of the workers in these plantations in the three countries mentioned above
Determine the SPO indicators for Banana in Ecuador, DR and Colombia and propose changes if necessary.
Project scope
SPOs producing bananas in Latin America and the Caribbean (in particular Dominican Republic, Ecuadorand Colombia)
Out of project scope
Other products and other regions
Project timelines and information on opportunitiesto contribute:
Scoping : Feb 2016
Research : Feb - April2016
Consultation : May2016
Drafting Final proposal : July2016
SC decision : Sept2016
Publication : Sept2016
Training : Q42016
Implementation: To be decided by the SC. / Decision making process:
The final decision will be taken by the Standards Committee (SC), a body made up of stakeholder representatives. The SC will aim at making a decision based on consensus. They may reword the final proposal if needed to reach consensus. If consensus cannot be reached, the SC will resort to voting.In case of a split vote the SC may take the decision to the Board for active ratification.
Project owner:
Andreas Kratz (Standards & Pricing Director)
/ Project manager(contact point for the project):
Arayath Kooteri Sajindranath
Senior Project Manager
Standards & Pricing

Project team:
Fairtrade International Standards Team / Project environment (stakeholder groups not part of the project team):
-Gelkha Buitrago
-Ruth Fernández Audera
-Yun-Chu Chiu
-Martin Blaser
-Astacio Castor
-Esteban Badilla
Expert on Workers
-Wilbert Flinterman
Strategic inputs
-Ian Bretman,
Producer Networks
-Anneke Theunissen (CLAC)
-Mikael Tengroth (Fairtrade Sweden) / Labour unions, FI Communications Team, other NFOs, PNs, Traders


Project Assignment- Draft for Comment