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Fair Trade is Big Business

Fair trade is all about making sure third world farmers get paid a fair price for the crops they produce.

It sounds worthy - and it is - but it's also turning into a huge business opportunity for companies with an eye for untapped markets.

Erica Adutwumaa Kyere is a cocoa farmer from Ghana.

In New Zealand a block of chocolate made from her product costs $5.80, compared to $3 for a relative block from a big company.

The farmers who grow the cocoa that goes into the cheaper block of chocolate make between $44 and $158 per year. In comparison farmers who grow the cocoa for the fair trade block of chocolate make $600 a year

And that $600 goes a long way

"We've been able to invest in bore holes, that is the provision of portable water, because in our part of the world most of the villages do not have portable water.

"We've also been able to build school... there are eight schools to our credit...we've been able to attract teachers to these schools, because it's always very difficult getting teachers who are educated to go into the villages," says Erica

She says fair trade takes into consideration all the toils and efforts the farmers in the third world actually put into producing the raw material.

Research carried out by Moxie Design Group shows that 25% of New Zealanders are what are called "solution seekers", that is we want to feel environmentally and socially responsible about the products we buy..

We don't want to compromise on quality and are prepared to pay a premium, within reason.

New Zealanders are not however the first to latch on to the fairtrade concept.

In the United Kingdom 59% of consumers buy fair trade products and supermarkets have embraced the concept wholeheartedly

The Co-op chain switched its entire range of chocolate and coffee over to fair trade in 2003 and within six months sales had jumped by as much as 25%.

Even British stalwart Marks and Spencers is in on the act. This year it removed all of its tea and coffee products to replace them with fair trade versions.

In New Zealand it is largely small businesses that are offering fair trade products.

But some bigger companies have jumped on the band wagon.

Esquires, an international coffee chain with 18 stores across New Zealand, only uses fairtrade coffee

"When Esquires was founded in 2002 we weren't fairtrade certified...we made a conscious decision to move to that at the end of 2002," says general manager of Esquires New Zealand operation Chris King. "Every business decision we make has to stack up from our business case point of view, but the fantastic thing about this branding exercise is that it does both for us... it is a great quality product and it is a product that we have built into our business as a viable business alternative."

Starbucks has also got in on the act, though not in such a big way. Four percent of the coffee sold at the chain is fair trade certified.

"For us to grow the way we are the coffee industry has to grow with us and if you don't take care of the coffee farmers and their families, they'll switch what crops they're growing or they'll abandon the farm to go work in the cities," says Starbucks spokesman Christine Day. "Fair trade represents only about 1% of the world coffee supply... it doesn't certify the mid and larger farms who we also buy for us the reality is that we can't purchase enough."

Whatever the case both Starbucks and Esquires are tapping into a potentially lucrative market.

More than a million dollars worth of fairtrade products were sold in New Zealand last year, a huge increase from only $2000 three years ago.