A new study commissioned by the Fairtrade Foundation and conducted by Impactloop sheds light on the economic benefits that flower workers in Kenya receive through the Fairtrade Premium, with education, healthcare, and housing emerging as key areas of impact. The Fairtrade Premium is an additional sum of money that flower workers can use - as they see fit - to improve their social, economic, and environmental conditions.
The report highlights that Fairtrade flower workers in Kenya receive around EUR 107 worth of economic benefits per year through the Fairtrade Premium, which includes the provision of educational subsidies, housing support, healthcare, and other in-kind benefits. These benefits are economic support, particularly for women workers, who often have lower wages than men. With flower workers' salaries averaging around EUR 895 per year, this Premium seeks to support workers who earn below the living wage benchmark of EUR 2,808.
The study finds that Fairtrade Premium payments can reduce the pressure on workers' wages. Fairtrade flower workers are also able to access loans through the Fairtrade Premium: "although not usually recognized in living wage frameworks, these are crucial to helping workers access essentials like education, housing, and household items. For many workers, loans have become an invaluable resource, particularly as the cost of living continues to rise. When loans are included in the analysis of the Fairtrade Premium, the total additional Fairtrade economic benefit rises to EUR 464 per person annually."
Mahsa Yeganeh, Senior Sustainable Sourcing Manager for Flowers at Fairtrade Foundation said: "There remains an urgent need to achieve living wages in the flower sector, and sourcing flowers on Fairtrade terms can provide much-needed and critical financial support for flower workers. This study demonstrates that Fairtrade Premium can also act as a cushion against some of the hardships of working in the flower industry. This study also highlights the ongoing need for Fairtrade to support workers in more holistic ways, combining essential in-kind and loan-based benefits through the Fairtrade Premium with direct wage improvements through collective bargaining."
The study, carried out by Impactloop, combines data from 76 Fairtrade-certified flower farms in Kenya on the use of Premium payments, along with research about the use of Fairtrade Premium and loans from three Kenyan flower farms.
According to the Fairtrade Foundation, one of the most significant impacts is in education, with 43% of workers accessing bursaries and education loans. This support ensures that workers' children can attend secondary and tertiary schools, with bursaries being prioritized for orphans and vulnerable children.
The study also found that healthcare and housing benefits from Premium were significant, with 10% of workers surveyed accessing plot loans and 35% benefiting from housing item loans, such as clean energy stoves and gas cylinders, the latter being taken up predominantly by women.
Whilst wages are low, the important role of in-kind benefits in supporting workers, especially women, was noted. With lower wages than men and high loan repayments, many women preferred in-kind support over cash, particularly when it came to items like household goods and housing improvements. These benefits were often cited as a way to ease intra-household financial pressures and improve overall living conditions.
However, the study points out that there is room for improvement, recommending ongoing financial education to help poorer workers better manage their loans and maximize the benefits of the Fairtrade Premium. It also found that workers were more satisfied when they were more involved in the decision-making process regarding how the Premium is used, with training and greater independence for Fairtrade Premium Committees (FPCs) identified as key areas for ongoing development.
The study suggests that alongside ongoing financial education, there should be continued support for trade unions and worker committees, helping to improve workers' representation in decision-making processes. This, the study suggests, could lead to greater worker satisfaction and productivity, alongside further improvements in wages and working conditions.
The study, 'Exploring individual economic benefits of Fairtrade Premium in the Kenyan flower sector' (October 2024) is available to download on the Fairtrade Foundation website.
For more information:
Fairtrade Foundation
www.fairtrade.org.uk