Fairtrade Labelling Organizations International

GROWING STRONGER TOGETHER

Annual Report 200910

FAIRTRADES VISION
A world in which all producers can enjoy secure, sustainable liveli hoods, fulfil their potential and decide on their future.

FAIRTRADES MISSION
To connect disadvantaged produ cers and consumers, promote fairer trading conditions and empow er producers to combat poverty, strengthen their position and take more control over their lives.

TABLE OF CONTENTS
A Year of Growing Stronger ..............................23 A Stronger FLO Achievements of 2009 .........45 How We Are Governed ......................................67 Fairtrade and Partnerships ..................................8 The Fairtrade Chain ..............................................9 The Fairtrade Standards .....................................10 Fairtrade Certification .........................................11 Fairtrade Products................................................12 Fairtrade Prize Winning Products ......................13 Fairtrade Producers Around the World.............14 Sales in Volume per Fairtrade Product ............15 Our Producers in Africa & Middle East .......1617 Our Producers in Asia ....................................1819 Latin America & the Caribbean..................2021 Highlights from Our Markets ........................2223 FLOs Financials .............................................2425 Challenges and Expectations ...........................26 FLO Board and Partners......................................27

FLOS PURPOSE
To provide the leadership, tools and services to inspire and empower more people to achieve Fairtrades vision and mission.

At A GlAnCE...
FLO is a non-profit, multi-stakeholder organization responsible for the strategic direction of Fairtrade, setting the Fairtrade standards and supporting producers in the global south. Fairtrade strives for improved terms of trade and fair prices for farmers and workers in developing countries. Fairtrade History
1988 Dutch development agency Solidaridad launches Max Havelaar, the first Fairtrade label 1988 to 1997 Fairtrade grows to include 17 Labelling Initiatives worldwide 1997 FLO is founded to unite LIs under one umbrella 2002 FLO launches the FAIRTRADE Certification Mark 2004 FLO-CERT established to certify producers and traders independently 2007 FLOs Strategic Review 2008 FLO embarks on global strategy to Strengthen, Broaden and Deepen the impact of Fairtrade

2009 A yEAR OF GROWING STRONGER

Message from the Board Chairman
2009 was the first year of the implementation of our new strategy. The management of FLO did a fantastic job in setting up the new facilities and structures which will serve the Fairtrade movement and I would like to start this short statement by thanking them for their dedication and professionalism. With these new services in place, Fairtrade will continue to improve the impact of our activities on the welfare and efficiency of the producers in the South. FLO, Labelling Initiatives and Producer Networks are making progress in working together within a global system, sharing best practices, using local resources for the benefit of all. Strengthening the capacities of the Producer Networks in such a way that they will have the means and tools to fulfil their duties in the governance of Fairtrade and to assume an increasingly important role in the management of their organization is essential. I would also like to thank our funding partners. The Strategic Fairtrade Funding Programme is a key element of the success of the implementation of our strategy. The ambition of Fairtrade is captured in the objectives of this multi-partner programme and will be achieved thanks to their support. During this year of internal restructuring and facing the financial crisis, Fairtrade was able to continue to grow. The confidence of consumers in the promises of Fairtrade is such that even in an aggressive economic environment the sales of Fairtrade products grew. That is the result of the quality of the work of each part of the chain of Fairtrade services. 2010 is the new strategys year of delivery. New services in place, a more global approach to our system and an evolution of our governance will allow us to deliver our ambition to deepen our impact and broaden our scope by strengthening our system.

CEO Rob Cameron on a visit to Fairtrade rice producers in Kaithal, India

Message from CEO Rob Cameron

When I look back to the beginning of 2009, we were in the midst of the worst recession in 70 years and the situation looked bleak. With household budgets tightening, we worried that shoppers might buy fewer Fairtrade products and that businesses might falter. Instead, consumers across the globe bucked the trend and proved their deep commitment to giving producers a fair deal. All Labelling Initiatives report growth in 2009 and campaigners continue to promote Fairtrade in new and innovative ways. Thanks to this support, new brands have embraced Fairtrade and long-standing partners have deepened their commitment. More global brands have made 100% commitments than ever before: Cadbury Dairy Milk, Starbucks, Nestles Kit Kat, Green & Blacks, and Ben & Jerrys. But, the economic recession also highlighted the vulnerability Southern producers face in the current trade regime. Access to capital and credit, high costs remaining from the oil price spike, the impacts of climate change these and many other issues were our call to action to grow stronger as a Fairtrade system and to broaden and deepen our impact. In 2009 we began putting our new Strategic Model into action, implementing major change across our operations. To begin, we strengthened our senior leadership team to equip the organization with the management capacity it needs. We established vital new departments. Strategy and Policy offers direction on Fairtrades future developments to maximize our benefits to producers. Global Product Management provides information, tools and strategy on our key products so we can better support producers and the market. Market Development is working on a harmonized approach to Fairtrades brand and marketing activities. Global Account Management will strengthen relationships with global business partners. Existing departments are also being overhauled as Producer Services and Relations develops a new structure and new partnerships to extend both our reach and range of services to producers. We began work on the new empowerment model, one of the most ambitious programmes ever undertaken by FLO. At its heart is a major overhaul of existing Fairtrade Standards and the addition of new elements to strengthen and deepen producer impact. The empowerment model includes other elements led by FLO-CERT, PSR and our Strategy & Policy teams. These are important activities but only insofar as they support delivery for producers. Our ambition is to increase the number of producers in the Fairtrade system fivefold, while delivering ten times the Fairtrade Premium and increasing Fairtrade sales tenfold, by 2015. To achieve these ambitious targets, we need to work closely with our partners. We thank our funding partners for their ongoing support. Most important of all, our producer partners are gaining a stronger voice within the Fairtrade system. The Producer Networks now have greater capacity in terms of both finance and people. We have further capacity building planned and are working to strengthen producer representation in our decision-making and operations. The need for Fairtrade is greater and more urgent than ever. Global actors are struggling to take on the pressing financial, environmental and structural issues facing our planet. But equally, our opportunity has never been greater. As more companies engage with Fairtrade the easier it becomes for others to join. Recognition of the need for sustainable development increases almost daily and Fairtrade is a simple, practical tool in the pursuit of sustainability. We must be single minded in our determination to make the impact we know we can and achieve our 5-10-15 goals. We must focus on our role in the bigger context and start to shape the global conversations that will define all our futures. It is in our grasp to take a lead in creating a better world. We cannot afford to let this, the Fairtrade moment, pass us by. In closing, I should like to thank the FLO staff, their FLO-CERT colleagues, the Labelling Initiatives, our Licensees, our many funders and supporters and above all the Fairtrade producers in this most testing of years for their unwavering support, unfailing effort and amazing achievements.

Success in the South

827 Fairtrade certified farmer and worker organizations 60 countries where Fairtrade producers are present 11% increase in certified producer organizations 1.2 million farmers and workers benefit from Fairtrade sales

Success in the north

27,000 Fairtrade products worldwide Over 70 countries where Fairtrade products are sold 8% increase in number of licensees 2,849 total number of licensees

Rob Cameron, Chief Executive

Market Overview
19 Labelling Initiatives and 2 Marketing Organizations 26 countries where Fairtrade is marketed and promoted by national organizations 3.4 billion global Fairtrade retail sales 15% annual growth

Jean Louis Hom, Chair of the Board

2009 A Year of Growing Stronger

A Stronger FLO
Achievements of 2009
Fairtrades worldwide recognition gives us the opportunity, and responsibility, to set ambitious goals. Over the past year, the Board of Directors, staff and members got down to work on achieving the objectives of our Global Strategy. It is our aim to strengthen our operations, broaden Fairtrades reach and deepen its impact for producers. It has meant making bold decisions and taking ambitious steps to go forward as a stronger movement. The achievements of 2009 are testimony to how FLO is moving from strategy into action as we pursue new markets and opportunities for producers. Ambitious new Standards Framework
Fairtrades achievements in 2009 brought benefits to more producers of more products in more locations than ever before. Turning FLOs strategy into reality is the result of the combined efforts of the FLO Departments now in place to meet the development challenges facing disadvantaged producers. During 2009 we: Created a stronger leadership team with the skills and experience to drive Fairtrades ambitious plans forward Put the foundations in place for the New Standards Framework to simplify the standards, improve economic returns for producers and help them strengthen their position Began a complete overhaul of our Producer Services to improve producer support Established a Strategy and Policy unit, Global Product Management and Global Account Management Extended our range of product categories Developed an Information Management System to provide access to reliable high-quality, system-wide data Signed major licensing agreements that will make a difference to thousands of producers For the first time in its history, FLO is revamping its standards. Better cost-benefit ratio, simplified compliance criteria and ensuring that FLO meets the needs of Fairtrade farmers, workers and traders: these are the key goals of the New Standards Framework. The new framework has three pillars: Production, Trade, and Business & Development which cover economic tools unique to Fairtrade and help to reinforce the Fairtrade Minimum Price and Premium.

FlO Opens Door for new Products

FLOs Strategy & Policy Unit has developed a clear process for new product development. It enables the expansion of new product categories, thereby giving more options to producers to sell under Fairtrade conditions while growing existing product categories. FLO will ensure the integrity of the process and be the key contact for champions of new product ideas. New categories currently considered include marine products, rubber and silk, as well as many more agricultural food products.

Dual Certification Partnerships

FLO has launched two historic dual-certification partnerships. FLO and the Alliance for Responsible Mining (ARM) developed the first ever third-party independent certification for gold to bring social, environmental and economic development in artisanal and small-scale mining communities. The FLO Standards Committee also approved a pilot project for jointly labelled FSC/FLO timber products from small-scale community-based foresters.

new Markets for Fairtrade

FLO and Fairtrade Label South Africa took a historic step by signing the first Fairtrade Marketing Organization agreement. The Czech Fair Trade Association (Asociace Pro Fair Trade) soon followed as the first national Fairtrade organization in Eastern Europe. In new Fairtrade markets, FLO licenses the Mark on products while local organizations are responsible for marketing and promotion. As Fairtrade continues to grow, a new Market Development Unit is now in place to combine brand management and market research activities globally and in countries without national Labelling Initiatives.

Scaling Up Producer Support

With the help of 43 Liaison Officers in the field, Producer Services and Relations (PSR ) provided 856 certification advisory visits to Fairtrade producers and 536 to applicant organizations in 73 countries. PSR will also help producers to comply with the revised standards. This means working more closely with producers to design their own business and development plans, train them in key aspects and connect them to additional resources and partnerships to achieve the producers own vision for their members and communities.

Monitoring Impact
In July 2009, the Strategy and Policy Unit published the first Monitoring and Evaluation Report which provides insights ranging from how many producers are benefiting from Fairtrade to the volume of their Fairtrade sales. FLO will establish a comprehensive impact assessment system over three phases, with the ultimate aim to track and access timely analysis of Fairtrade impacts.

Global Product Management

GPM was established as a central point of product information providing expertise, tools and product specific strategic direction. This will help connect producers to market and identify areas for improvement. The team now has managers for the Big Six Fairtrade products: coffee, tea, cocoa, bananas, cotton and sugar. In 2009, the first Product Advisory Council brought together experts from across the tea supply chain to provide product insight and advice to FLO. Other Advisory Councils are in the planning.

Building Strong Business

Once companies meet pro ducers in the field, Fairtrade sells itself. How producers are improving their own lives through trade opportunities is convincing and contagious. FLO is here to introduce companies to producers and open doors for both.
Martin Hill, Director of Global Account Management The goal of the newly created Global Account Management Unit (GAM) is to leverage deeper commitment from global business partners by opening up opportunities, streamlining engagement with Fairtrade and negotiating as a single global system. One of the early achievements of GAM is Starbucks success at doubling its Fairtrade certified coffee purchases.

A Full Fairtrade Herb Shelf

Responding to more than one hundred requests from farmers to expand the existing range of 25 Fairtrade herbs and spices, FLO amended its existing standard. As a result, certified farmers are able to offer any type of seed, root, flower or leaf that meets the definition of herb or spice. Producers and traders of herbs and spices have welcomed this change, which also expands consumer choice.

The farmers I work with in Vietnam are really excited about the new standard. It means they can finally stabilize their incomes by diversifying their product range beyond tea into cinnamon and ginger.
Jaap Brands, founding member of Vietnamese Van Chan Bio Farmers Club.

4 A Stronger FLO

A Stronger FLO

How We Are Governed

Our Members
We often talk about Fairtrade in terms of what we do or why we do it; but how we go about our work is equally important. Fairtrade is one of the largest and most diverse multi-stakeholder initiatives in the world, with thousands of relationships in over 90 countries. As sales and recognition of Fairtrade grow, so does the number of people involved; from producers or funding partners right down the Fairtrade chain to consumers and grassroots campaigners.

3 Producer networks

Producer Networks represent the interest of producers in the Fairtrade system. They are associations, which Fairtrade certified cooperatives or plantations can join if they wish. Membership in these associations is not required for certification. The three regional networks in Africa, Asia & Latin America/Caribbean became full FLO members in 2006, recognizing the importance of producers being co-owners of the system.

& &
19 labelling Initiatives
Labelling Initiatives promote Fairtrade to businesses and consumers in their countries and license companies to use the FAIRTRADE Mark on consumer products. There are currently Labelling Initiatives in 15 European countries, the U.S., Canada, Japan, Australia and New Zealand. We also have two Associate Members: Mexico and South Africa.

2 Marketing Organizations

exercise their voice within ASSEMBlIES

In new Fairtrade markets, Fairtrade Marketing Organizations are responsible for marketing and promoting Fairtrade in their countries.

24 FlO Members

The Labelling Initiatives gather at least once a year at the LI Assembly, as do the three regional Producer Networks. The 24 members come together yearly to exercise their rights as owners of Fairtrade through the General Assembly. The General Assemblys role is to maintain the constitution and membership systems of the association and to approve the annual accounts.

It is very important that Fairtrades governance is participative, so that all members can contribute their knowledge and experience to Fairtrade; and that it is accountable to all stakeholders for Fairtrades performance and impact. Our current model dates back to 2006 and since then Fairtrade has grown almost four-fold, expanding into new products and regions. So now is a good time to review and update it. Ian Bretman, Vice Chair of FLO Board

appoint the BOARD

FLOs Board of Directors decides on the long-term strategy for Fairtrade. The Board is made up of 14 people: five are elected by the Labelling Initiatives, four by the Producer Networks and five by the Board based on recommendations from the Boards Nominations Committee. Of these five, two are nominees of certified traders and three are independent, appointed for their relevant knowledge and experience. The Board appoints sub-committees to provide expertise and oversight in key areas, such as finance, standards and audit.

are supported by FlOs lEADERSHIP tEAM

FLOs Leadership Team provides operational services and Fairtrades strategic direction. FLO is led by the CEO, COO and FLOs Unit Directors and Heads from: Finance and Central Services, Producer Services and Relations, Strategy and Policy, Standards, Global Account Management, Global Product Management, Market Development, Communications and Human Resources.

work with FlO-CERt

FLO-CERT is an independent certification organization responsible for certifying producers and traders against the Fairtrade Standards. It is the only ISO 65 accredited social certification body in the world.

6 How We Are Governed

How We Are Governed

Fairtrades Approach to Partnerships

the Strategic Fairtrade Funding Programme
One of the key messages emerging from FLOs Strategic Review was the need to strengthen existing partnerships and develop new ones. Our approach is based on the principle that what is done is more important than who does it. By working together with organizations who have other areas of expertise, or access to other resources, we can add value to Fairtrades work, that of our partners and, most importantly, deepen the impact of Fairtrade.

The Fairtrade Chain

From Producer to Consumer
A worker on a Fairtrade tea plantation in India. A cocoa farmer from the Caribbean. A shea butter cooperative in West Africa. How do their products reach consumers? How does the Fairtrade supply chain work? Standard-setting and certification represent the basic principles of the Fairtrade chain, which was set up to create fairness, transparency and accountability. There are seven major players involved in the supply chain who bring Fairtrade products to store shelves.

Through strategic partnerships we can ensure that disadvantaged producers have access to more benefits by engaging with Fairtrade, and that we will be able to deliver on our core objectives. Key to the success of strategic partnerships is the identification of mutual objectives. The Millennium Development Goals (MDGs) provide a focus both for Fairtrade and for many of the most significant players in international development. We are working with several of these organizations to enhance our contribution to achieving the MDGs and thereby addressing the worlds most pressing development challenges. FLOs commitment to the MDGs is articulated in the Strategic Fairtrade Funding Programme, Phase I of which was successfully concluded in 2009. The Programme aims to attract coordinated funding for Fairtrade, thereby enhancing the effectiveness of development assistance. During this phase, we worked with five strategic funding partners (see below) to enhance Fairtrades development impact. Phase II of the Programme runs from 2010-2013 and embodies our core strategic objectives: strengthening the global Fairtrade system; broadening the scope of Fairtrade; and deepening the impact of Fairtrade. Phase II of the Programme has already attracted significant support. One of its aims is to double the number of Fairtrade producers; another goal is a three-fold increase in the total value of the Fairtrade Premium paid to producers. Our intention to bring more of the benefits of Fairtrade to the poorest producers and producers in fragile states is also explicitly articulated. As part of this Programme, and with funding partners who support specific projects, our relationships extend beyond a simple financial transaction and recognize the variety of ways in which organizations can work together to achieve mutual objectives. This approach extends to the many other important development actors with whom we are building relationships, including major international development banks, partly in the context of our new activities in the field of improving access to finance for Fairtrade certified producers.

Fairtrade labelling Organizations International

In consultation with producers, traders and development experts, FLO sets and reviews the Fairtrade Standards. There are standards for small producers, hired labour, contract production and trade standards. FLO also provides business support to help producers strengthen their businesses and seize new market opportunities. There are 18 product-specific standards for small producers and eight for Hired Labour covering 20 product groups.

PRODUCERS
Hired Labour Small Producer Organizations Contract Production

FlO-CERt
FLO-CERT is the only ISO 65 accredited certification body for a social label. Before sales can begin, FLO-CERT inspects, audits and certifies producers and traders. Producers are certified against social, economic and environmental standards and traders are certified against trade standards. The Fairtrade Minimum Price and Premium are paid to the producer by whoever buys the product first, whether it is an importer, exporter or processor. The certification system makes sure that the Fairtrade Minimum Price and Premium reach the producers by providing credibility, trust and transparency. There are now roughly 2,000 trader and producer organizations certified by FLO-CERT in 73 countries.

tRADERS
Importer Exporter Processor Manufacturer

labelling Initiatives
LIs are the consumer-facing organizations that promote and market Fairtrade in their country or region. If a company wants to put the FAIRTRADE Mark on their product, a Labelling Initiative must license its use. Only then are Licensees permitted to use the FAIRTRADE Mark on their products. Labelling Initiatives can also conduct licensee trade audits. In non-LI countries, FLO is responsible for licensing. Retailers, wholesalers or distributors can sell consumer-ready Fairtrade labelled and licensed products and do not have to register with FLO or a national organization. By the time a consumer product bears the FAIRTRADE Mark, it has been checked all along the Fairtrade supply chain. When consumers see the Mark, they know that Fairtrade Standards have been met and because of their purchasing choice, the individual producers are receiving the benefits of Fairtrade.

lICEnSEE
Packaging, labelling Sale of consumer products with the FAIRTRADE Mark

Strategic Funding Partnerships

UK Department for International Development ICCO Inter-Church Organization for Development Cooperation, Netherlands Irish Aid NORAD Norwegian Agency for Development Cooperation SECO Swiss State Secretariat for Economic Affairs

Project Funding Partnerships

Comic Relief, UK Friedrich Ebert Stiftung, Germany EED Church Development Service, Germany ICCO Inter-Church Organization for Development Cooperation, Netherlands MISEREOR The German Catholic Bishops' Organization for Development Cooperation, Germany HIVOS Humanist Institute for Development Cooperation, Netherlands Roskilde Music Festival, Denmark SNV The Netherlands Development Organization

DIStRIBUtORS/REtAIlERS
Distribution or sale of Fairtrade labelled consumer products

COnSUMER

8 Fairtrades Approach to Partnerships

The Fairtrade Chain

The Fairtrade Standards

Socially and Economically Fair, Environmentally Responsible
In order to be a part of the Fairtrade system, traders and producers have to meet certain criteria. FLO is responsible for developing and maintaining the Fairtrade Standards. They are designed to tackle poverty and support sustainable livelihoods for farmers and workers in the worlds poorest countries. They also serve to foster mutually beneficial and longer-term relationships between producers and traders.

Our standards apply to producers and their buyers in the supply chain. They include producer standards for workers/ Hired Labour and small-scale farmers organized in Small Producer Organizations or who sell through external bodies, which is known as Contract Production. There are also standards for the importer, exporter or processor who buys directly from the producer group.

the FAIRtRADE Certification Mark

Fairness. Empowerment. Progress. Hope. A small Mark that says and does a lot. When the FAIRTRADE Certification Mark was launched in 2002, there were questions: What does the symbol represent? Is that a person in the middle? Is that an elephant under a setting sun? Does the blue symbolize loyalty?. Whatever people may interpret, what the Mark does and what it stands for is not left to the imagination. The FAIRTRADE Certification Mark is now the most widely recognised ethical label in the world. When a consumer product bears the Mark it ensures that the product has been traded according to FLOS international Fairtrade Standards. There are roughly 27,000 products on store shelves around the world bearing the FAIRTRADE Mark. When consumers choose to buy a product labelled with the FAIRTRADE Mark, they are helping to reduce poverty and encouraging companies around the world to trade fairly. The FAIRTRADE Mark is a registered trademark of FLO certifying that products meet the social, economic and environmental Fairtrade Standards. These standards are set in accordance with the ISEAL Code of Good Practice.

Fairtrade Certification
Certification for Development
Millions of people around the world count on the FAIRTRADE Mark and the ethical value it adds to a product. All along the trade chain, from producer to consumer, cocoa bean to chocolate bar, all Fairtrade labelled products must be certified. It starts with a written application and ends with certification for a specific period of time. But in a globalized market that is growing ever more complex, how can people be sure that the FAIRTRADE Mark really is fair ?

Unique to Fairtrade
Minimum Price: The first buyer of Fairtrade certified products has to pay producers the Fairtrade Minimum Price for their products or the market price; whichever is higher. This means it can serve as a safety net for farmers when world markets fall below a sustainable level. Minimum price only sets the minimum trading price; producers and traders can also negotiate a higher price, for example on the basis of quality, and for some products, FLO also sets different prices for organic crops, or for particular grades of produce. Fairtrade Premium: An additional sum of money is paid on top of the agreed Fairtrade price. It is usually invested in social, environmental or economic development projects that are decided upon democratically by producers within the farmers organization or by workers on a plantation. For example, education and healthcare, farm improvements to increase yield and quality, or processing facilities to add more value to the products. Even if the producer is paid more than the Minimum Price, the Fairtrade Premium remains the same.

People need Reassurance

A producer wants to know that when his products are Fairtrade certified he will receive a fair price and premium to be able to improve his community and business. A trader wants to assure her buyers that her product was ethically produced. Consumers want to be certain that when they buy Fairtrade they are making a contribution to a better world. That is why Fairtrade has robust standards and a rigorous certification process that makes sure these principles are upheld. FLO-CERT works to ensure that producers and traders comply with the Fairtrade Standards and that producers receive the Fairtrade Minimum Price and Premium. Certification has three basic steps: reporting, auditing and certification. A full Fairtrade audit can last a few days for a small organization or up to several weeks for the largest ones. Certification is financed through fees paid by producers and traders. The amount depends on the size of the organization, its complexity and the number of certified products it is seeking to sell. Many industrial and business sectors certify the quality or technical standards of their products, or their services. Fairtrade Certification goes beyond that, also ensuring the ethical and social value of a product. It is the only certification scheme set up to tackle poverty and to enable the empowerment of farmers and workers in developing countries. Consumers can be assured that the international FAIRTRADE Mark can only be used when producers and traders have met the Fairtrade standards.

ISO 65 CERtIFICAtIOn
FLO-CERT is the only ISO 65 accredited social certification body in the world and follows the ISO norm in all its certification operations. ISO 65 is the leading, internationally recognized quality norm for bodies operating a product certification system. ISO 65 accreditation means that:
A quality management

BEnEFItS tO PRODUCERS:
Long-term trading

relationships
Producers have greater

control over the selling process

Access to pre-financing The Fairtrade

system is in place
Transparency in all

processes
Independence in the

Minimum Price
The Fairtrade Premium

certification decision making

10 The Fairtrade Standards

Fairtrade Certification

11

Fairtrade Products
Retail Sales Around the World
2009 was another year of positive growth for Fairtrade, as sales continued to increase across all LI countries. Its estimated that roughly 27,000 Fairtrade products are now sold in over 70 countries. According to recent surveys, consumer awareness of the FAIRTRADE Mark has exceeded 80% in some countries. And, despite the economic downturn, Fairtrade has achieved a 15% increase in global retail value, with estimated sales amounting to 3.4 billion.

Fairtrade Prize Winning Products

Excellence in taste and Quality

Country AUS/NZ Austria Belgium Canada Czech Republic Denmark Estonia Finland FLO** / Rest of World France Germany Ireland Italy Japan Latvia Lithuania Luxembourg Netherlands Norway South Africa Spain Sweden Switzerland UK USA GRAND TOTAL

2008 (in ) 18,567,280 65,200,000 45,780,141 123,797,132 51,220,106 54,445,645 130,722 255,570,000 212,798,451 94,429,586 41,284,198 9,567,132 4,249,301 60,913,968 30,961,160 5,483,106 72,830,302 168,766,526 880,620,304 757,753,382 2,954,368,443

2009 (in ) 28,733,986 72,000,000 56,431,496 201,978,074 556,540 54,436,609 295,045 86,865,284 18,099,255 287,742,792 267,473,584 118,574,416 43,382,860 11,283,451 153,500 315,380 5,327,122 85,818,400 34,689,522 458,075 8,030,724 82,662,331 180,160,263 897,315,061 851,403,590 3,394,187,360

Growth Rate 58 %* 10 % 23 % 66 %* 6% 60 % 13 % 26 % 26 % 5% 2 %* 25 % 41 % 19 %* 46 % 25 %* 7% 14 %* 7 %* 15 %
The rest of the countries do not separate the Out of Home sales from Retail Sales. Out of Home retail price often has a higher value per volume sold than the Retail Sale price found on products in stores. Therefore, the countries that use the Out of Home retail price for their calculation may have higher growth rates. Out of Home sales make up approximately 19% of the total global estimated Retail Sales value. * Growth rate is based on the percentage increase as reported in the local currency and not on the value converted into Euro. ** The FLO sales figure from 2008 did not represent the total retail values due to the unavailability of data, so the growth rate is omitted here. New market sales figures from Czech Republic, Estonia, Latvia, Lithuania and South Africa were only introduced this year, so we cannot calculate growth rate for 2009.

Alter Ecos Noir Intense Force Brute Prou Top place, Que Choisir Origin: Peru

Hampstead Teas Earl Grey Leaf Tea Non Alcoholic Beverages Award, Soil Associations Food Awards Origin: India

Rishi Tea 28 awards including 11 First Place, World Tea Championship Origin: China, India, Egypt

AWARD-WINNING FAIRTRADE PRODUCTS

Fairtrade products are gaining recognition not only for ethical leadership but for excellence in taste and quality thanks to producers superior Fairtrade ingredients carefully crafted by partner businesses into award-winning products.

The Fair Trade Spirits Companys FAIR.Vodka Worlds Best Unflavored Vodka, New York Spirits Awards Origin: Bolivia

Ethiquables Spicy Banana Plantain Chips Golden Archer Best Ethical Product, Belgian Committee of Distribution Origin: Ecuador

FLO calculates the total estimated Retail Sales value based on both Out of Home sales and Retail Sales since this more accurately reflects what consumers spend on Fairtrade products. Out of Home sales come from products consumed outside of the home; for example in restaurants and cafs. Retail Sales come from consumer products bought in stores and supermarkets.

In 2009, the following countries calculated the Out of Home sales value using the average Out of Home retail price; for example, the average price of a cup of coffee at a caf: Canada, Finland, FLO, Germany, Ireland, Spain, USA. The countries listed below calculated the Out of Home sales value using the average Retail price for consumer products bought in stores and supermarkets: Belgium, France, Italy, Japan, Sweden, Switzerland.

Belvass Chocolate Truffles Palm, Quality Food Awards Origin: Dominican Republic, Paraguay

Migros Basmati Rice Top rated, TESTBESTE Origin: India

Gepas Bio Cocoba Chocolate Spread Very Good, KOTEST Origin: Latin America

12 Fairtrade Products

Fairtrade Prize Winning Products

13

Fairtrade Producers Around the World

More Members and Steady Growth
Different continents have different opportunities and challenges. In order to be more effective in helping producers, it became clear that a more regional approach was needed. The three Producer Networks joined FLO in 2006. A major focus of FLOs global strategy is to significantly increase their role in Fairtrade. Membership is voluntary and many small producers are not part of a network. There are now 827 producer organizations in 60 countries; an 11% increase over 2008.

Sales in Volume per Fairtrade Product

Upward trend for Most Products
Fairtrade Standards now cover 20 product groups as the number of consumer products made from Fairtrade certified goods continues to grow. Cocoa and sugar saw strong leaps in sales thanks in part to 100% commitments by global chocolate and confectionary brands including Cadbury Dairy Milk, Nestl UKs Kit Kat, Ben & Jerrys and Green & Blacks. Coffee, the pioneering Fairtrade product, also experienced steady growth.

Product Flowers and plants Bananas Sugar (cane sugar) Coffee (roasted, instant) Fruit juices Cotton Fresh fruit Cocoa (cocoa beans) Wine Tea

Unit 1,000 stems MT MT MT MT 1,000 items MT MT 1,000 litres MT MT MT MT MT MT MT 1,000 items

Conventional | Organic

Total 2009 335,893 311,465 89,628 73,781 45,582 23,346 20,091 13,898 11,908 11,524 5,052 2,065 859 578 556 541 118

Growth Rate 8% 4% 57% 12% 62% -15% -24% 35% 33% 1% 8% 0% 13% 266% 1% -24% -16%

Africa & Middle East

Producer Organizations: 231 Members & workers: 760,000 28 Producer Countries: Benin, Burkina Faso, Cameroon, Comoros Islands, Cte dIvoire, Democratic Rep. of Congo, Egypt, Ethiopia, Ghana, Kenya, Madagascar, Malawi, Mali, Mauritius, Morocco, Mozambique, Palestine, Rwanda, Senegal, Sierra Leone, South Africa, Swaziland, Tanzania, Togo, Tunisia, Uganda, Zambia, Zimbabwe

Asia
Producer Organizations: 120 Members & workers: 189,000 12 Producer Countries: China, India, Indonesia, Kyrgyzstan, Laos, Pakistan, Papua New Guinea, Philippines, Sri Lanka, Thailand, Timor-Leste, Vietnam

latin America & Caribbean

Producer Organizations: 476 Members & workers: 280,000 20 Producer Countries: Argentina, Belize, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Dominican Republic, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Paraguay, Peru, Windward Islands

Rice Honey Nuts and oilseeds Herbs and spices Quinoa Dried fruit Sports balls

Evolution of certified producer organizations 20052009

number of certified producer organizations 900 800 700 600 500 400 300 200 100 0 2005 2006 2007 2008 2009 508 632 569 827 745

14 Fairtrade Producers Around the World

Sales in Volume per Fairtrade Product

15

A United Voice
Our Producers in Africa
An expanding Producer Network, better information for producers on new market opportunities and an increase in South-South trade are all part of the exciting work going on in Africa. In 2009, the first Fairtrade Marketing Agreement was signed by FLO and Fairtrade Label South Africa. Awareness is on the rise, and producers across the continent are investing their Fairtrade Premium in innovative projects, improving their business and the local community.

Dates from tunisia: Building on Success

Its five years since the Groupement de Developpement de lAgriculture BioDynamique (GDABD) decided to go for Fairtrade certification, motivated by the desire for sustainable production methods, better environmental practices and increased export sales. Since then the Tunisian farmers have formed long-term trading relationships with European partners, improved the quality of their produce and have increased their exports, meaning that 75% of members income now comes from overseas sales of their Fairtrade organic dates. The cooperative is keen to build upon this success. Its vision is to increase Fairtrade sales further and to diversify into other markets such as North America and the UK.

Premium Use 2009

AFRICA

Total Fairtrade Premium ......... 12.6 million Community ............................................... 22% Education .................................................. 16% Environment............................................. 0.2% Health ........................................................... 6% Business & Production.............................. 46% Womens Programmes .............................. 3% Other / Not yet spent ........................... 3% / 4%

African Fairtrade network

The AFN has a mission: to promote Fairtrade in Africa, facilitate regional trade and increase opportunities for its members to sell their products. There are 231 certified producer organizations in 28 African countries and this figure continues to grow. There are four regional offices in East, West and Southern Africa and an office in Northern Africa is planned for later this year.

A Partnership in Zimbabwe
FLO and the Netherlands Development Organization (SNV) have been working together on trade and development issues since 2006. According to Lawrence Attipoe, Country Director for the organization in Zimbabwe, the relationship is an important one: A significant outcome of the partnership is the new support model to small producers and FLOs move towards a more market oriented pricing system. FLOs focus on developing capacities of producer groups is very commendable and appreciated by clients and partners. Also, the move to identify and jointly develop value chains with SNV rather than concentration on certification, will ensure more sustainable supply chains in the future. Attipoe adds that the future of Fairtrade in Africa depends, among other things, on the development of local producer capacity, leading to the development of integrated value chains that enable processing of primary products for both the domestic and international Fairtrade markets. Our expectation is that FLO, within the boundaries of confidentiality, can share reasonable amounts of its market intelligence with us as a tool for developing strong value chains linked to existing and potential market opportunities. Up until now, FLO has not been very responsive in this rather important area of the partnership. In addition to working with partners such as SNV, FLO can also play a major role in ascertaining the capacity needs of identified producer networks, such as the AFN. SNV appreciates FLOs passion for improving producer group capacity for sustainable business, but Attipoe adds they have been less impressed with the pace and cost of the certification process, especially for smallholders.

Bridging the Gap and Dealing with Drought

The Waridi Flower Farm is located close to the Kenyan village of Kinanir. Many of its workers and their families live there. What separates the farm from the village is the Athi River, a waterway that is subject to flooding in rainy season but can also dry up for months at a time. Both these situations have proven problematic for the local community - in rainy season they cant cross the river to get to work or to access other local services, whereas in periods of drought there isnt enough water for cooking and cleaning, or for feeding their livestock. Waridi Flower Farm already carried out a project to build a footbridge over the river in 1999, and Fairtrade Premium money helped fund essential repair work to the bridge when it was severely damaged by flood. Local communities now have yearround access to local trading centres. Last year, the company undertook another project to tackle the problem of drought and water shortage. Fairtrade Premium money was used to construct two weirs across the river. The weirs act as a dam, allowing water to be stored during drought time so the community has access to water during the dry season. Work on the two weirs started in February last year and by the end of April both reservoirs were full with rainwater. Its now much easier for the villagers to get the water they need, and as problems of drought and water shortages continue to increase, Waridi Farm expects the weirs will be invaluable to the local community in the months and years to come.

With Fairtrade, we have a Minimum Price which is a useful tool to protect us from market price fluctuations. Last year we used the Premium to purchase netting to prevent damage to the crop from pests and the summer rains. Thats why we are now pro ducing better quality dates.
Abdella Mesbah, President of the Cooperative

Here, FLO can, and should do more to simplify the certifica tion process, while maintain ing its quality and credibility. Given the scope of work on the ground and the increasing wave of Fairtrade worldwide, FLO must increase the num bers and capacities of Liaison Officers to support integra tion of Fairtrade thinking into effective and integrated value chains. SNV remains commit ted to partnership with FLO to achieve these objectives.
Lawrence Attipoe, Country Director, Zimbabwe / SNV Netherlands Development Organization

16 Our Producers in Africa

Our Producers in Africa

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Premium Use 2009

ASIA

Total Fairtrade Premium ........... 5.6 million Community ............................................... 25% Education .................................................. 12% Environment................................................ 0% Health ......................................................... 18% Business & Production.............................. 20% Womens Programmes .............................. 4% Other / Not yet spent ......................... 14% / 7%

A United Voice
Our Producers in Asia
network of Asian Producers
Representation, coordination, exchange and collaboration for the empowerment of small scale farmers and workers organizations. That is the self-proclaimed mission of NAP, the Network of Asian Producers, which now has 96 member producer organizations in 12 countries. Since its founding in 2005, NAP has been working to help even more Asian producers join the Fairtrade movement. It also works to ensure that Asian realities and conditions are taken into account when Fairtrade Standards are set without compromising on the basic principles of Fairtrade.

Producers often lose track of changes happening around them. These changes can be in the form of fluctuating mar ket demand, in the quality of their product and of course to the economy in general. NAP is an important tool for information dissemination and building awareness. The relationship between FLO and the NAP has always been strong and we continue to co operate in many areas such as producer support, infor mation sharing and building strategic partnerships that share our cause across the globe.
Binod Mohan, NAP Chairman

Coffee in Papua new Guinea

Some of the worlds best coffee comes from the small country of Papua New Guinea. Yha Hauka Kopi Pty Ltd. is one of four Fairtrade certified producers in the country. It is a small farmers cooperative with 670 members that sells to traders in the U.S. and Australia. Papua New Guinea is divided by a spine of mountains and a rugged rainforest region. The lack of basic infrastructure means that farmers spend a large part of their earnings on shipping by plane or boat. Others must often carry their harvest to the nearest road, sometimes walking half the day. Yha Hauka Kopi was founded in 1986 to help the farmers market their coffee. It became Fairtrade certified in 2004. Since then, the Fairtrade Premium has helped the coop to achieve its vision of improving the livelihoods of its members and the people of the community.

Small Producers in China

The first Chinese producer organization to join Fairtrade was Da Zhang Shan, an organic tea producer certified in 2001. Today, there are four small producer organizations for tea. However, one of FLOs newest members from China is a group of small farmers from Inner Mongolia who grow soybeans, peanut kernels and pulses. The Jurihe/Zhaluteqi Nature Village Farmers Association was certified in 2009. Its 39 members farm 21 hectares of land near the small village of Jurihe/Zhaluteqi, near Tongliao City in Inner Mongolia. Inner Mongolia is the third-largest subdivision of China and one of Chinas poorest rural areas. It has long, cold winters and short, warm summers. In Jurihe, poverty is widespread. Children cannot get basic education. Schools are old and in need of repair. Children have to walk more than one hour to reach the school. In winter, temperatures drop below -20 degrees, adding to already difficult living conditions. The Fairtrade Premium can be used by the Association to address these problems and help improve the lives of its workers and their families. The Association sells its products to the DunHua Dewei Organic Products Co. Ltd, a Fairtrade certified exporter in the City of DunHua, which is about 600 kilometres from Tongliao.

Premium Investments
Education: The Yha Hauka Cooperative offers partial and full scholarships to cover school fees of the members children. Health: Yha Hauka assists with hospital transportation and medical evacuation in case of emergencies. It also provides free transportation services for teachers, school and medical supplies, as well as transportation of patients. Productive Investment: Cooperative members are offered extension services, including advice on field practices. The cooperative also uses Fairtrade sales revenue to help pay the cost of airlifting coffee from growers in remote regions of the district. The coffee of these farmers had previously gone unsold due to the drop in coffee prices and the increase in airfreight costs.

Our farmers group is located in the poorest rural area of China with rough geographi cal conditions and wicked weather. Some of them are still worrying about their sur vival and basic education of their children. Although we are already solving these pro blems actively, our farmers group is young and faces a lack of capital support. So, we still have more to do, to change, to improve. And we are very happy that the Fairtrade certification is helping us to make that change together.
DunHua Dewei Organic Products

18 Our Producers in Asia

Our Producers in Asia

19

A United Voice
latin America and the Caribbean
The devastating earthquakes that hit Haiti and Chile in early 2010 mean that many producers in this region need Fairtrade more than ever. If there could be a positive aspect of the horrendous natural disasters, perhaps it would be the sight of Fairtrade producers and the wider Fairtrade family rallying together to help their neighbours in need. It is a great example of what is typical for the Latin America & Caribbean region: small producers working together to improve their lives.

Premium Use 2009

LATIN AMERICA & THE CARIBBEAN

Total Fairtrade Premium ......... 33.8 million Community ............................................... 24% Education .................................................... 4% Environment................................................ 1% Health ........................................................... 3% Business & Production.............................. 36% Womens Programmes .............................. 2% Other / Not yet spent ....................... 18% / 12%

Coordinator of Fairtrade Small Producers in latin America and the Caribbean

CLAC is the network of small producers representing roughly 300 organizations in 20 countries in the region. CLAC offers its members representation, coordination, exchange and collaboration, all with the aim of strengthening the regions small producer organizations within the framework of Fairtrade.

I believe there are two ways to see things. One way is to see Fairtrade only as a mar ket tool to improve producers income and strengthen our organizations through access to market, financing, and other forms of cooperation. The other equally important way is to see Fairtrade as a movement of which we are a part and to which we have contributed to change the attitude of the market and of consumers, creating more just relationships between producers and consumers, respect for human rights, quality production, respect for the environment and involving ourselves in demo cratic institutions.
Ral del guila, President, CLAC

CORA Cooperative: the futures bright & fertile!

Organic sugar cane farmers in Tebicuarym, Paraguay had three things in mind when setting up the Caeros Orgnicos Asociados (CORA) cooperative: improving the quality of life for farmers and their families, organizing the production and sale of their crops and improving the fertility and condition of the land. Now, just one year after obtaining Fairtrade certification, the cooperative has already come a long way in meeting its objectives, and the whole community is reaping the benefits. In Tebicuarym, good soil preparation and fertilizer are essential for farmers to yield a good crop. Yet the harvest is the only real source of income for most farmers, meaning they have virtually no money beforehand to invest. Recognizing this problem, the cooperative decided to use some of its first Fairtrade Premium to help producers get out of this quandary. They bought special machinery that farmers can use to prepare the soil, and are also providing them with subsidized fertilizers, which do not have to be paid for until the harvest is over. Whats more, by hiring workers to help the farmers with the fertilizing and planting, CORA is not only helping its own producers but also the local community, since many men normally have to migrate for work or rely on fishing to sustain their families before harvest-time. The local school children are also feeling the benefit of the Fairtrade Premium. Until recently the school didnt have electric lighting: fine on a sunny day, but the first sign of clouds led to hardly any light coming through the small classroom windows. So, CORA used some of its Premium money to buy electric lights for the school, with some of its members going to the school themselves to install them.

Fairtrade Ends Washing Day Woes

For most of us, the thought of just one week without a washing machine is unbearable. Across the globe in Apartad, Columbia, washing clothes by hand is a daily reality for most. But since last year an ingenious Fairtrade Premium project at the CORPONUI banana cooperative is helping to bring an end to the hard manual work of doing laundry, and is generating an additional source of income for its workers in the process. Last year, the cooperatives Joint Body started using part of the Fairtrade Premium to give loans to workers for income generating projects. One such project is a washing machine rental service. The micro-enterprise consists of a series of portable washing machines that are rented out by the hour to housewives. The worker earns some extra money to support his family, the women are spared the arduous work of washing by hand and the whole community benefits from clean clothing.

20 Latin America and the Caribbean

Latin America and the Caribbean

21

Fairtrade Around the World

news and Highlights from Our Markets
Our national Labelling Initiatives and Marketing Organizations are the pillars of the Fairtrade system. Although Fairtrade depends on partnerships and collaborations with individual organizations to realise our goals, it continues to be a grass-roots social movement. Fairtrade would not enjoy the success it has today without the commitment and the support of hundreds of thousands of people around the world: ongoing proof of how we are truly growing stronger together.

Fairtrade Campaigns
Fairtrade campaigners have been out in full force again. Highlights include: A world record in Fairtrade coffee drinking in Germany: 120,556 cups in just one hour A cross-border Nordic Fairtrade Challenge, in which 289,678 participants in Finland, Sweden, Norway and Denmark used Fairtrade products at 3,800 events A triumph for Fairtrade bananas in Luxembourg: 75,000 bananas were bought, distributed and eaten on Fairtrade Banana Day, almost double the original target of 40,000 A fair boost for Boston commuters, as Fairtrade supporters in the U.S. distributed thousands of coupons for free Fairtrade beverages.

Social networking
Over the past 12 months there has been a flurry of web and social networking activity, boosting awareness of Fairtrade and the need for a better deal for producers and their families. In The Big Swap campaign, UK consumers exchanged their conventional products for Fairtrade ones and registered each swap on an interactive webpage. This led to over a million and one Fairtrade swaps being made, and countless Fairtrade events being registered and documented. 2009 saw the launch of the awardwinning international Fairtrade Towns website (www.fairtradetowns.org), combining the best resources, case studies and reports from the international movement. Since the launch in June, the site has been visited by people from 81 countries and 580 members have joined the online community network. In the online campaign Cut It Out For Change! Max Havelaar France asked people to cut the label off their clothing, sign an online video petition and in so doing encourage top brands to include Fairtrade cotton in their collections. Over 10,700 people have signed the petition so far. This years Fairtrade Breakfast was the largest ever. Over 110,000 participants joined Fairtrade Breakfasts in 21 countries around the world. Many Fairtrade Labelling Initiatives have Facebook pages with thousands of people subscribed as fans.

Accolades & Distinctions

TransFair USA was named one of Entrepreneur Magazines 100 Brilliant Companies for the second year in a row. Fairtrade was listed as one of the words of the decade by the BBC. November 2009: TransFair Germany was awarded the German Sustainability Prize, Deutscher Nachhaltigkeitspreis, in the category Germanys most sustainable products / services. In July 2009, Fairtrade Sweden was awarded Strongest Brand by two major PR agencies, Hill & Knowlton and Westander.

Exceptional growth demands innovative approaches to fight poverty and to contri bute to sustainable economic development. We believe that cooperation and collaborative efforts will create synergies and support each others efforts. The challenge lies in how to manage growth and the quality of the Fairtrade Standards, as well as consu mer demand and producers capacity building. We believe FLO provides appropriate responses to these issues but will probably have to get even better to correspond properly to market growth.
Carsten Schmitz-Hoffmann, GTZ Deutsche Gesellschaft fr Technische Zusammenarbeit GmbH

Conferences
Our national organizations held conferences worldwide, showing Fairtrades unique role in bringing people involved at all stages of the global trade chain together to talk about issues and opportunities. At the Fairtrade Foundations Commercial Conference, banana farmer Cornelius Lynch spoke on the same platform as the Managing Director of Waitrose, one of the supermarket chains to stock his bananas. TransFair Germany held its second Fairtrade Conference in Berlin, alongside its first Fairtrade Awards ceremony, which honoured people and companies who demonstrate an outstanding commitment to Fairtrade. Max Havelaar Belgiums conference brought together producers, retailers and economic experts to discuss the global crisis and Fairtrade.

Governments Show Support for Fairtrade

Not only the general public, but governments and public figures are also increasing their support for Fairtrade. Over the past year: The Czech Parliaments cafs started serving Fairtrade coffee. In Denmark, 12 master chefs wrote recipes based on Fairtrade ingredients for a Fair Food cookbook, with all proceeds going to Fairtrade. In Switzerland, two famous chefs became Fairtrade Ambassadors. 440 candidates running for the European Parliament elections pledged to support Fair Trade if elected and to ensure that the needs of marginalized producers and workers in the South are reflected across all European Union policy areas. The U.S. Secretary of State, Hillary Clinton, stopped at a Dublin caf during Fairtrade Fortnight to enjoy a cup of Fairtrade coffee.

22 Fairtrade Around the World

Fairtrade Around the World

23

FLOs Financials
Statement of Accounts
The summarized key financial figures outlined below have been extracted from internal management reports and from the audited financial statements 2009. The latter, as in previous years, received an unqualified opinion (Deloitte). FLOs accounting practices comply with generally accepted accounting practices and relevant German legislation (KStG and HGB). The full audited financial statements are available on request from FLOs office in Bonn.

InCOME StAtEMEnt 2009 INCOME

2009 (000) 2008 (000)

Membership fees ....................................................................................... 4,859 .................... 3,381 Grants restricted ..................................................................................... 3,612 .................... 2,108 Grants unrestricted ................................................................................. 2,358 .......................624 Interest & other income ................................................................................ 386 .......................366 TOTAL INCOME....................................................................................... 11,215 .................... 6,479

BAlAnCE SHEEt 31 December 2009

31.12.09 31.12.08 FIXED ASSETS ................................ 186 ..........116 Intangible fixed assets..................... 12 ............17 Tangible fixed assets ..................... 145 ............70 Financial assets ............................... 29 ............29

(000) 31.12.09 31.12.08 EQUITY ....................................... 1,066 ......... 514 Restricted & designated reserves ... 249 ......... 483 General reserve ............................. 817 ............. 0 Surplus brought forward .................. 0 ........... 31 DEFERRED INCOME....................... 611 ...... 1,595

EXPENDITURE PER BUSINESS UNIT

Producer Services & Relations ................................................................... 4,377 .................... 2,850 Standards development & maintenance ................................................. 1,218 .......................725 Strategy & Policy .......................................................................................... 565 .......................537 Communications, brand and product management .............................. 1,728 .......................996 Governance & Central Support Services .................................................. 2,776 .................... 1,135 TOTAL EXPENDITURE.............................................................................. 10,664 .................... 6,243 Change in reserves .......................................................................................... 551 .......................235

CURRENT ASSETS ....................... 2,587 .......2,590 Outstanding accounts for services ..................................... 878 ..........466 Other assets ................................... 830 ..........208 Liquid funds................................... 879 .......1,916

PROVISIONS .................................. 317 ......... 102 LIABILITIES .................................... 779 ......... 495 For supplies & services .................. 655 ......... 415 Other liabilities and accruals ......... 124 ........... 80

SURPlUS

2,773
Tangible fixed assets relates to office equipment.

2,706

2,773 2,706
Restricted & designated reserves comprise the Producer Certification Fund ( 249,000) through which, under specified criteria, certification costs can be subsidized in part for producers. The General reserve was introduced in 2009 and replaces the former Surplus Brought Forward and the Operational Reserve, which was a designated reserve. Deferred income consists of grants from funding partners for 2010, already received in 2009. Provisions are for possible and foreseeable costs that have not materialized by the year-end. Liabilities are outstanding bills and other regular costs for 2009, paid in 2010. All liabilities are short term and are settled in the first few months of 2010.

Membership fees: As a membership association, FLO receives membership fees from the national Labelling Initiatives. The membership fee is unrestricted funding and is calculated as a percentage of the licence fee income of the Labelling Initiative. Grants were received from the funding partners mentioned on page eight. An amount of 3.6 million is restricted funding: these funds can only be

used for specific purposes indicated by the funding partner. The remaining 2.35 million is unrestricted funding. Expenditures are presented per Business Unit. Governance & Central Support activities include coordination of a global multi-stakeholder governance system and services for our members, existing and potential funding partners and other stakeholders.

Change in reserves comprises: Net decrease of Producer Certification Fund of 11,000 (being annual contributions of 100,000 less payments of 111,000 from the Fund to producer organizations). Net increase in other reserves of 562,000 being the 2009 surplus, and transfers from the surplus brought forward and the operational reserve to a new general reserve.

Outstanding accounts for services comprises outstanding membership fees. Other assets relates to activities and expenses made in 2009 which are still to be reimbursed by funding partners ( 665,000), as well as activities, accruals and costs related to 2010 already paid in 2009 ( 165,000).

24 FLOs Financials

FLOs Financials

25

Challenges and Expectations

An External Perspective
As we embark on fulfilling our goal to strengthen, broaden and deepen the impact of Fairtrade, we feel the need to reach out to our partners and supporters for their insight into FLOs performance. Our intention is to gain valuable insight for ourselves, create a more outward-looking culture and to give our readers some external personal perspectives on challenges and expectations ahead.

FLO BOARD AND PARTNERS

the FlO Board is made up of:
Representatives from the Fairtrade Labelling Initiatives (LIs) Mr Ian Bretman is Vice Chair of FLO Board and represents Fairtrade Foundation UK. Mr Martin Rohner is CEO of Max Havelaar Foundation Switzerland. Mr Steve Knapp is Director of Fairtrade Labelling Australia and New Zealand. Mr Thomas Bullock is a board member of TransFair USA. Ms Judith Kyst is Secretary General of Fairtrade Mark Denmark. She is also co-founder and head of the board of the Danish Initiative for Ethical Trading and has a seat in the Consumer Counsel in Denmark. Representatives from Fairtrade certified producer organizations (at least one from each of the regional Producer Networks) Mr Binod Mohan represents producer organizations in Asia and is also Chairman of the NAP (Network of Asian Producers) and the Managing Director of Tea Promoters India, a Fairtrade certified tea estate. Mr Carlos Eugenio Vargas represents producer organizations in Latin America. Mr Vargas works for a Fairtrade certified banana cooperative in Costa Rica as co-ordinator for the compliance with Fairtrade standards and for commercial relations. Mr Ral del guila represents coffee producers in Latin America and is President of the CLAC, Coordina dora Latinoamericana y del Caribe de Pequeos Productores de Comercio Justo and the Managing Director of COCLA, a Fairtrade certified coffee cooperative in Peru. Mr Noel Oettle joined the Board in February 2010. He is a Board member of the African Fairtrade Network and represents producer organizations in Africa. Representatives from Fairtrade certified traders Mr Leo Ghysels is the Director of the Department of Producer Research at Oxfam Wereldwinkels Belgium. Ms Liz Jarman joined the Board in February 2010. She is Head of Grocery Product Development and Fairtrade at Sainsbury's, a UK supermarket chain. Independent experts: Mr Jean-Louis Hom is Chair of the Board of Directors. Mr Hom was Heinekens Director for African and Middle East operations from 1993 to 2002. Ms Molly Harris Olson is a Director of Eco Futures Pty Ltd, an Australian-based international policy firm working on building sustainable strategies with business, government and civil leaders. Ms Esther Guluma joined the Board in late 2009. She has over 30 years experience in the aid and development sector in Asia and Africa. Most recently Ms Guluma worked as the Regional Director for UNICEF in West and Central Africa. Our thanks also go to: Mr Yorokamu K. Abaine Abainenama and Mr Rick Peyser, who stepped down as Board members last year as their terms of office expired.

Mark lee, Executive Director, SustainAbility

FLOs new strategy embraces a more flexible approach to ethical sourcing and is better positioned to mainstream its ambitions and engage more consumers and ultimately have more impact as a result. Recent market share gains for Fairtrade products and the expansion of product lines deeply impress. Yet amidst the array of competing certification schemes, FLO would benefit from stating more definitively the impact and outcomes that Fairtrade certification delivers. How much poverty has been alleviated and how exactly have producers been empowered? To what extent are consumers more aware of the impact of their purchases? We would be delighted also to see FLO do more to build consumer awareness and demand for sustainably sourced products. This will be accomplished not only through improved marketing of the Fairtrade label itself, but by working with partners, especially manufacturers and retailers and with other certification schemes to identify and pursue shared goals.

The FLO strategy identifies the major challenges and identifies how theyll be tackled. Within that, to reduce the entry costs for a producer going Fairtrade, its important to collaborate with various partners other agencies providing technical expertise and market development; other Fair Trade efforts supporting producers and helping grow demand and consumer awareness; other sustainability and ethical labels where mutual recognition could help reduce the inspection burden on producers.

Hans Peter Egler, SECO

FLO must remain among the leading initiatives for sustainable trade. We are at a cutting edge where it is going to be decisive on how sustainable trade in niche and mass markets will evolve. FLO needs to communicate its unique selling position to distinguish Fairtrade from other initiatives in a positive rather than in a defensive manner. FLO also needs to look beyond agriculture. Looking at Africa, we see a bigger potential in other services, manufacturing for example. We know this is a big challenge but the wider Fairtrade impact would be tremendous.

Sasha Courville, Executive Director, ISEAl

FLO has done a brilliant job of bringing its core stakeholders together around a cohesive and proactive strategic plan. As a work that is constantly in progress, FLO needs to strengthen its verification system. As ISEAL starts the process of developing its Verification Code, we welcome FLOs experiences and those of other ISEAL members in teasing out the challenges and opportunities to develop cost-effective and accessible certifications systems that meet the needs of supply chain companies and consumers in terms of acceptable and credible levels of assurance. There is no such thing as a perfect certification system it is a question of identifying the priorities, managing stakeholder expectations and delivering to same. FLO needs to reach out to those outside of its traditional stakeholder base of producers, business and civil society organizations. FLO has the opportunity to make real inroads, given that it now has a solid base to build from. The Fairtrade community must recognise that part of its future success will depend on how well it can collaborate with the rest of the sustainability standards movement to achieve common sustainable development objectives and overcome common challenges, while at the same time preserving what is unique to Fairtrade.

Patricia Francis, Executive Director, International trade Centre

FLO possesses excellent organizational and technical skills for the Fairtrade certification process. However, producer groups most often lack the managerial, operational, as well as marketing and sales skills to run as efficient businesses. ITC has engaged in a dialogue with FLO to capacity build its Producer Networks so that they are able to manage and grow their business independently and sustainably. This is an area where ITCs enterprise competitiveness programmes can ideally complement FLO, in the field of export management, export value chain, export marketing and branding as well as e-solutions. ITC is looking forward to starting a joint pilot programme that will demonstrate the synergies and added value of a joint approach.

Deborah McGurk, trade Policy Unit, UK Dept. for International Development

I expect FLO to energetically pursue the ambitious targets it has set itself. This includes supporting many more producers into Fairtrade in poorer and more difficult, conflict-affected countries; striving for gender equality in Fairtrade; and widening the range of standards. The stronger global Fairtrade Information Management System being developed will help inform work on how and where Fairtrade is achieving development impacts.

Other Partners
FLO collaborates with the following organizations who share common principles on Fair Trade: FTAO Fair Trade Advocacy Office WFTO World Fair Trade Organization EFTA European Fair Trade Association ISEAL The International Social and Environmental Accreditation and Labelling Alliance IFOAM The International Federation of Organic Agriculture Movements

labelling Initiatives
There are Fairtrade Labelling Initiatives or Marketing Organizations covering the following countries: Australia/New Zealand, Austria, Belgium, Canada, Czech Republic, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Japan, Latvia, Lithuania, Luxembourg, Mexico, Netherlands, Norway, South Africa, Spain, Sweden, Switzerland, UK, USA. For full contact details please visit our website: www.fairtrade.net

Challenges Mark 26 FAIRTRADEand Expectations

IN 2010 WE WILL:

CREDITS
EDItORIAl tEAM: Laura Zonka, Vicky Pauschert, Reykia Fick, Jennifer Stapper, Miyako Takahashi and Christine Knickelbein COnCEPt & lAyOUt: AGENTUR 21, Kln www.agentur21.de PRInt: in puncto druck + medien gmbh, Bonn www.inpunctobonn.de
This report has been printed by an FSC Certified Printing Company using paper that meets the internationally recognized FSC Principles and Criteria of Forest Stewardship.

Streamline and revise Fairtrade Standards and Certification Launch our new Producer Services and Relations strategy Strengthen the Producer Networks Facilitate new financial opportunities for producers Identify new types of producer setups Invest in new partnerships Implement new Information Management System Review our governance & finance model

Come join us on our journey to make a difference!

Photo Credits by Photographer

Eduardo Bluhm: Page 11 | Andrew Cameron: Waridi Flower Farm, Page 17 | Jasper Carlberg: Page 15, 21, centre | Fairtrade Media: Page 6, 25, Outer Back Cover Fold | Nicolas Gauthy: Page 8 | Didier Gentilhomme: Front Cover; Page 4, 7, 18, 19, 20, Inner Back Cover Fold | Linus Hallgren: Outer Front Cover Fold, Page 14, right | Kennet Havgaard: Page 5, bottom right, Page 14, centre | Frdric Raevens: Page 10, Page 14, left | Steven Livingston: Page 3 | ric St Pierre, from his book Fair Trade A Human Journey: Back Cover; Page 16

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FaIRTRaDE LaBELLINg ORgaNIzaTIONS INTERNaTIONaL

Bonner Talweg 177 53129 Bonn Germany Telephone +49 (0)228 94 92 30 Telefax +49 (0)228 24 21 713 [email protected] www.fairtrade.net