Dominic Hannigan (Labour)

I welcome the Minister of State to the House. World poverty and disadvantage is still one of the leading concerns in the world today. We are seeing an ever-widening gap between the rich northern hemisphere and the poor southern hemisphere, with many children born into the deepest levels of poverty imaginable. As a result, we see efforts by right-meaning people to try to narrow the wealth gap. In Ireland, we are pushing towards the goal of spending 0.7% of gross domestic product on overseas aid. We also see initiatives such as Fairtrade to try to assist local economies in the developing world.

Coffee production, to which other Senators referred, is one of the largest industries in the world. As demand for coffee has increased, so too has supply, leading to rock-bottom prices for coffee growers, many of whom can no longer make a living producing coffee. Fairtrade came along and created an opportunity for these producers who would otherwise be economically dead in the water. It enables them to develop a certain amount of market independence, allowing them to improve their farms and other assets and to diversify into other areas. The fair price paid for their produce covers the cost of production, ensures fair pay and conditions for individual workers and brings benefits to local facilities such as schools, health centres and so forth. Fairtrade also ensures the participation of women in the production process is adequately and properly rewarded.

The Fairtrade initiative has struck a chord with people across the world because, put simply, it makes sense. As a result, the market for Fairtrade products has grown enormously. In 2006, consumers around the world purchased €1.6 billion of Fairtrade products, representing a 42% increase on 2005. In Ireland in 2005 the retail value of Fairtrade products was €6.5 million. By the following year, that had almost doubled to €11.5 million. Last year, the figure almost doubled again, with Fairtrade sales reaching €20 million. Currently, the sale of Fairtrade products is growing rapidly across the world and in Ireland in particular. Combined with Irish increases in the level of overseas development aid, these figures demonstrate Irish people's willingness to try to counter the massive global poverty epidemic. They are choosing to make ethical purchases so as not to make matters worse.

The genius of the Fairtrade initiative is that it poses a simple ethical question to consumers in supermarkets, namely, "Am I part of the problem or part of the solution?" It enables people to lift themselves directly out of the cycle of keeping Third World farmers and producers in a thick web of poverty.

It must be noted that there are some concerns about the Fairtrade initiative. I have read complaints that Fairtrade seeks to create an artificial market price that will lead to dangerous market conditions. The concern is that if Fairtrade leads to an increased supply of tea, for example, the excess supply will lead to lower prices in the non-Fairtrade market which will then require a market correction. However, Fairtrade itself is the market correction we are seeking. The Fairtrade labelling organisation has asserted that farmers can only receive Fairtrade prices if they find a buyer willing to pay them. Furthermore, studies have shown that farmers use the additional income to improve their living conditions and the education of their children. They do not use the additional income to increase the production of crops. I have also read case studies comparing Fairtrade and non-Fairtrade farmers which show the former were more successful in diversifying their produce. Those in Fairtrade deals also saw a significant drop in child mortality, improvements in the food consumption of their households and received a better price for their crops.

Fairtrade is proven to work. In Ireland it has been very successful. We see the ethical choice being passed back to consumers who are reacting accordingly. There are already 30 Fairtrade towns in Ireland, with a further 30 actively seeking Fairtrade status. Dublin is now a Fairtrade capital, thanks to people like the Lord Mayor, Councillor Paddy Bourke, and Councillor Eric Byrne. The latter, in particular, has been working towards achieving Fairtrade status for the past few years. There is now a Fairtrade schools pack which details a syllabus for junior certificate students and uses the civics course for what it should be used for, namely, to enlighten young people about the world and provide them with an active opportunity to become part of the solution rather than part of the problem.