The Impact of Fairtrade in Africa: A Case Study of Iria-Ini Tea Factory in Othaya, Nyeri

In today’s globalized world trade is one of the most powerful forces linking our lives. International trade has proved to be a source of immense wealth, yet millions of the world’s poorest populations are getting poorer every day. Increased prosperity among developed countries and multi-national corporations has occurred as poverty in developing countries has increased. The already obscene gap between the rich in the global north and the poor in the global south has widened. According to Oxfam, the problem is not that the international trade system is inherently opposed to the interests of poor developing countries, but rather that the rules governing the trade are skewed in favor of the rich. These disadvantageous rules include tariff barriers as well as non-tariff barriers such as lack or limited access of raw material products from the developing world into developed world markets, and declining prices of agricultural products from the developing world. Even after several Doha Rounds and numerous declarations in favor of the developing world by the World Trade Organization, agreements such as AGOA and GATT (General Agreements on Tariffs and Trade) access to markets has continued to be a challenge for producers. Prices of these products have continually plummeted over the last 25 years. Today tea, coffee cotton farmers in Africa earn a fraction of what they earned 20 years ago for the same quantity and quality of produce. Worse still, prices of manufactured products such as farm inputs and farm machinery which are necessary for production of these crops have more than quadrupled in the very same period of time. It is clear that international trade today is a doodle of unfair interactions in favor of the global north. The study focuses on fairtrade as a system of trade different from the conventional as it is governed by rules which support poor producers in the global south. It will look at fairtrade and the benefits farmers in Iria-ini tea factory in Nyeri are enjoying as a result of their involvement in it. It will analyze both economic and social benefits as well as some of the hurdles faced by these farmers. The study analyzes foreign aid as a tap which has not run dry ever since it was opened in the early forties, yet it has, on the overall, failed to achieve its goal of poverty reduction and development in the global south. The study compares foreign aid to fairtrade and concludes that it is time Kenya considered taking up fairtrade as a poverty reduction strategy and relied less on foreign aid. Results of this study reveal that fair-trade has been of immense economic benefit to Iria-ini tea farmers as they are able to earn more money from the very same quality and quantity of tea in comparison to amounts they earned when they sold their tea through the Mombasa auction system. Social benefits accrue as result of community development projects which are funded through fair trade premiums. Further findings show that fairtrade is not all rosy for farmers at the factory; there are several challenges faced by the farmers; recommended solutions for these will also be discussed.