ICT Update: The tools of fair trade

Buying fair trade goods is not about giving to a good cause. When consumers buy a fair trade product they are investing in someone who has a skill, but who may have no other source of income. For farmers, getting an honest price for their time, effort and money means they can invest more toward next season’s yield. They can buy books, send their children to school and pay for basic medical services. Technology has helped the spread of fair trade by promoting the concept to consumers and involving more small-scale producers.

ICTs, and mobile phones in particular, have also helped some fair trade organizations to increase efficiency in the supply and delivery of goods. The Alternative Trading Network in Nigeria reports that it has saved as much as 20% in transportation costs simply by using mobile phones to coordinate distribution efforts. Farmers give up-to-date information on the quantities of products to be picked up and the truck drivers can call ahead to report any delays they encounter on the road.

Linking Local Learners (LLL) uses mobile phones in a similar way as part of its marketing method in East Africa, and combines them with an information sharing network on the web. The system tries to include everyone involved in the process of taking goods from the farm to market, from the farmer to the buyer and transporter, up to the retailer, warehouser and distributor. This is the so-called supply chain, and LLL encourages all those who participate in it to share information on their role in bringing goods to the consumer. By disclosing details such as market prices, transport costs and retail value, the supply process becomes more transparent, promotes trust and creates mutual understanding among the traders.

An important aspect of LLL is that people from different networks, operating in other supply chains or even in neighbouring countries, can also share information. A farmer in Tanzania with information on improving the quality of grain supplies, for example, could give tips via the website to a wheat grower in Kenya. Through this exchange of information and ideas, everyone in the supply chain can learn from each other about new and efficient methods of working together. Some networks using the method have already made huge savings, in some cases up to 50% of their previous operating costs. The extra money is passed along the chain to give everyone a better and much fairer deal.

The next step for those using the LLL method is to use TradeNet to find new buyers and get better prices for their products. Farmers who already use the service can get current market prices sent to their mobile phones but, more importantly, buyers looking for a particular commodity can contact producers directly, wherever they are in the world. The website also has the latest market news and prices and has a facility to show price changes of products over the last year. Members can sign up for free to create an online network and can even build their own website.

But fair trade also helps communities, not just the individual producers. In Swaziland, artisans from Gone Rural have used their increased income from selling fair trade handicrafts to invest in local small-business ventures. One woman, Zodwa Ngcamphalala, used her profits to start a solar powered mobile phone charging system in an area of the country where there are no other electricity sources and where mobile phones are the only means of long distance communication. Her involvement in fair trade has now helped to expand the use of technology by the people in her village and the surrounding area.

The main purpose of fair trade is to give small-scale producers in developing countries a reasonable, honest price for their products. In 2007 global sales in fair trade merchandise increased by 47%, making it a US$3 billion a year industry. An estimated 1.5 million producers from more than 60 developing countries now benefit from this swiftly growing market. Technology is helping to transform the supply process, making further savings that can be passed on to producers. Hopefully, as internet and mobile phone coverage spreads throughout rural areas of ACP countries, more and more farmers will be able to get involved and finally get the fair deal they deserve.

ICT Update is published in English and French.

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