Opportunities for agricultural exports are provided thanks to fair trade certification
Fair trade is an international certification managed by the Fair Trade Labeling Organizations International (FLO). This form is internationally recognized certification for tea, coffee, cocoa, spice and handicraft products.
According to the Vietnam Rural Industries Research and Development Institute (VIRI), nearly 95 percent of fair trade certified goods are used for exports. EU consumers are paying greater attention to fair trade certified goods as the European Parliament issued a resolution in order to promote the application of fair trade certification in the EU market back in 1998.
Purchasing power of fair trade certified goods has rapidly increased from US$815 million in 2004 to around US$3.4 billion a year in recent years. Fair trade certified cocoa has been present at more than 120 markets, while certified handicraft exports to the EU have increased by 13 percent a year on average.
An EU market survey revealed that three-quarters of those surveyed would buy fair trade certified goods and 30 percent of them would be prepared to pay 10 percent more for such products. To achieve certification, these products must follow environmentally-friendly and sustainable development standards and ensure no discrimination between manufacturers and workers, helping businesses improve transparency and meet export requirements.
Expert Do Xuan Hien from the Vietnam Coffee and Cocoa Association said that fair trade certification simplifies business activities since it has focused on controlling the production process rather than checking product quality. In addition, its registration fee is also less expensive than other certifications due to driving towards community benefits. This is a great opportunity for Vietnamese businesses to expand selling channels, especially export promotion.
Implementing fair trade into production
To overcome difficulties facing businesses, the project on promoting fair trade in Vietnam funded by the EU with the total budget of €504,288 running from June 2014 to May 2017 has been deployed focusing on tea, coffee, cocoa, spice and handicraft products, with the goal of strengthening business capability of fair trade certified goods in Vietnam.
Under the project’s support, as many as 13 cooperatives and two coffee export businesses have been granted fair trade certification. In addition, four tea businesses have received certification and two or three more cooperatives are making greater efforts to be certified, while five handicraft businesses have certification and seven other businesses are in the process.
Cong Bang Thuan An Cooperative Director Nguyen Huu Ha said that the cooperative currently has 900 hectares of fair trade certified coffee and engaged the interests of 132 households. Ensuring food safety and hygiene, no using harmful chemicals, no residue of plant protection drugs and the rate of mature beans of more than 85 percent are key requirements for fair trade certified coffee. To help farmers sell products, the FLO has undertaken to introduce certified coffee to units.
Nguyen Huy Hung Coffee Company Deputy Director Dao Duy Tung said that if foreign partners know about fair trade certified products, the possibility of signing contracts will be higher. In 2015, the company exported 20 tonnes of fair trade certified coffee for US$2,700 per tonne to the US and EU markets.
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