Government’s Basket Needs More Fairtrade!

Irish General Election 2020 – Briefing Note: Fairtrade Ireland
Issues, Opportunities and Responsibilities: Irish Government support needed for fairer trade, sustainable development, climate mitigation and a just transition for marginalised producers.

24th January 2020
Introduction:
In the same way as for Irish citizens and companies, the Irish Government has responsibilities to ensure that it does not harm to the most vulnerable people on the planet.
And it should do a lot more to support vulnerable farmers and workers who are at the receiving end of both climate impacts, and global supply chain pressures, in many of the poorest communities in the world.
This responsibility to do no harm, and ideally to do a lot more than that includes areas like:
• how the Government earns money through its taxation policies;
• how our tax money is spent on day to day items like coffee and tea in fair and sustainable procurement policies.
• how the Government co-invests our overseas aid budget to ensure support for livelihood improvement, climate mitigation strategies and fairer trade.
• how the Government ensures powerful interests like commercial companies in Ireland are held accountable for safeguarding human rights and the environment in their global supply chains.

ISSUES and OPPORTUNITIES – 1)
How the Government earns money…
…And the need to review how the Irish Government imposes Levies and Taxes on products from marginalised producers?
Levies
In its consultation on environmental levies, the previous Government were proposing to bring in a levy on disposable cups at the rate of 0.10cent, 0.15cent or 0.25cent per disposable cup. According to the Government funded, Recycling List Ireland, there are over 200 million disposable cups used in a year. Income from the ‘Latte Levy’ was to be used for building re-cycling and composting infrastructural capacity around the country – and as a disincentive to mindless consumption creating non-degradable waste. They believed that with a suite of incentives, disincentives; cultural change and new facilities, we could significantly reduce the use of plastic cups – much as the plastic bag tax massively reduced the amount of plastic bags in use.

Using a conservative estimate of only 100 million of the 200 million disposable cups used a year being filled with coffee, the 0.15 cent Latte Levy per cup will earn the Government EUR15 million for work on improving the Irish environment.

We estimate that coffee farmers would earn about EUR3 million.

Taxation
Unlike many food stuffs sold at wholesale and retail, which are charged at zero VAT rates – hot beverages like coffee, are mostly charged at 13.5% VAT.

VAT adds no value or greater sustainability to coffee farming communities. It adds wealth to the Irish people. This tax needs to be looked at in the context of the Irish Government’s new and important overseas aid commitment, to helping the ‘poorest first’ and to ‘leaving no one behind’.

As a conservative estimate for example, the Government will earn EUR24 million just from the VAT on the sale of these 100 million cups of coffee.

If we add the Latte Levy of 0.15 cent on to the one hundred million cups, or EUR15 million, together they add up to EUR39 million in taxes and levies earned by the Government – and less than EUR3 million for the coffee farmers.

The Irish Government needs to develop policy coherence between its taxation, sustainable development and development policies to promote a just transition for poorer countries and their producers. If VAT and environmental levies are going to be imposed, this income should partly be used to support a new Sustainability Fund in Irish Aid as well as supporting work on Irish environmental issues.

ISSUES and OPPORTUNITIES – 2)
How the Government’s daily spend affects marginalised producers..
…And the Need For A Fair Environmental and Social Government Procurement Policy
In 2019 the previous Government instituted a public consultation in advance of issuing new Guidelines on Environmental and Social procurement. Irish Government procurement accounts for about 12% of GDP and can have a huge impact on sustainability issues as a result.
The rate of growth in consumer spending in Ireland on Fairtrade products was the highest in the world in 2017, In 2018 Fairtrade banana and coffee volumes again grew by over 17% and consumer spend in 2018 was worth over EUR380 million.
The Irish Government needs to follow the example of both Irish companies and people. When it talks about supporting the achievement of the UN Sustainable Development Goals, one measureable way of doing this is by having a fair trade procurement policy enshrined in Government procurement policy.
The Irish Government needs to ensure that Government Departments and agencies support fair trade in their tendering and contracts.
A guide to Fairtrade and public procurement in Ireland can be found here:
www.fairtrade.ie/wp-content/uploads/2015/01/Guide-For-Procurement-Professionals.pdf

ISSUES and OPPORTUNITIES – 3)
How Irish Aid co-invests in Climate Change mitigation and Livelihoods support for marginalised producers..
… And the need to align development support with fairer trade, and the sustainable development concerns of Irish citizens and companies.
Previous Irish Governments have made significant investments through the Irish Aid programme in promoting more sustainable and fairer trade. In the ten years between 2008 and 2016 Irish Aid invested about EUR20 million in four countries in East Africa; Ethiopia, Kenya, Tanzania and Uganda as well as in Central America. This programme was widely believed to have been very successful.
A review of the Irish Aid programme by the Natural Resources Institute in Greenwich University found:
‘The challenges of global food security, climate change and economic development, are significant and require rural transitions – with more than individual farm plot interventions, not least because so many smallholder plots are too small to be viable. Land ownership issues are sensitive, but rural transitions need to be supported so that they are equitable. Wider changes are needed: in the scale of production, farm organisation, processing, new technologies and supply chain development and the creation of employment with living wages for agricultural workers and participatory land use planning.’
‘Is funding of fair and ethical trade systems is still relevant?’
‘Yes. Fair and ethical trade systems (which we also term voluntary sustainability standards) are highly relevant to the Irish Aid policies of tackling poverty and hunger, improving productivity, supporting trade and economic growth. Support to fair and ethical trade should form one component of a coherent response to the global challenges facing agriculture (food security, climate change, environmental degradation, employment, urbanization and economic growth etc.).’
Future Irish Governments should ensure that support for fair trade is again an integral part of Irish Aid’s investments in sustainable development, climate mitigation, gender empowerment and more equitable trade.
A copy of Irish Aid’s external review of its last Fair and Ethical trade programme can be sent on request.

ISSUE 4) How the Government holds companies accountable for human rights in their supply chains…
.. and the need for Mandatory Reporting on Human Rights and the environment.
Fairtrade Ireland supports the development of a UN binding treaty on business and human rights to regulate, in international law, the activities of transnational corporations and other business enterprises. Within this we support calls for EU regulation of companies’ impact on human rights in their supply chains.
As a first step we are asking the Government to support the growing calls for the introduction of an EU regulatory framework for cocoa entering the EU market. and to support the Governments of cocoa producing countries, in a wide range of measures needed to make the cocoa industry sustainable.
In December 2019, Fairtrade International co-signed a joint position paper calling for the European Union to implement a regulatory approach to sustainable cocoa, along with many of the largest chocolate companies in the world; Barry Callebaut, Mars, Mondelez, as well as the Rainforest Alliance and the VOICE Network. The joint position paper calls for the EU to enact legislation that requires all companies placing cocoa or cocoa products on the EU market to enact mandatory due diligence on human rights, child labour and the effects of cocoa production on the environment.
We consider this joint statement as an important step to the stated ultimate aim of the signatories: a living income for cocoa farmers.

Contact Details:
Fairtrade Ireland
Peter Gaynor
Carmichael
North Brunswick Street
Dublin 7
Te: 01 475 35 15
Email: peter@fairtrade.ie