Fairtrade Labelling Organizations International

Consultation Document: Draft Trade Standard for Fairtrade Flowers and Plants (part C), version March 2008

Explanatory note:

The here presented Draft Standard (version March 2008) only contains the Trade-Specific Part (C) of the Flower and Plant Standard. The Social, Economic, Environmental Standards for Flowers and Plants (Part B) were already reviewed in 2006.

The main changes presented in the draft standard concern:

-A new section that is called product description and that should help to clarify the scope, product groups and composite rules;

-A new Fairtrade Premium level for all product groups;

-Adoption of the Flower and Plant standards as a result of the draft Generic Trade Standard

To be able to answer some of the questions that are listed in this document you should consult the Draft Generic Trade Standards (separate document). Please note that the Draft Generic Trade Standards are for information only; you are not expected to comments on those standards.

This document is divided in 3 columns: The left-hand column contains the current Trade Standards on Flowers and Plants (version 01.03.2007) and the centre-column contains the draft Trade Standards on Flowers and Plants. The right-hand column explains why certain changes have been proposed, it lists a number of questions and it offers space for comments.

You are invited to comment on all suggested standards. We encourage you to give explanations and examples underlying your statements.

Following the consultation round we will prepare a paper compiling the comments made. All the information we receive from respondents will be treated with care and kept confidential. Results of this consultation will only be communicated in aggregated form.

The deadline for submitting your comments is April 30th 2008. If you plan to participate in this consultation round but foresee difficulties to meet the deadline, please let us know in advance.

Please submit your comments to the project coordinator Rob van Hout (FLO Standards Officer) at: If you have any questions regarding the Draft Standard or the Consultation process, please contact the project coordinator by email or call: 0049-228-94923-263

Current standard, version 01.03.2007 / Draft standard, version March 2008 / Your Comments:
PART C Trade Standards for Fairtrade Flowers and Plants
1 Product description

1.Chain of supply

Purchases from registered sources: all flowers and plants to be sold with the FLO mark must have been produced by FLO certified farms only. Sales of flowers or plants produced outside the grower’s estate and not FLO certified are prohibited. / 1.1Scope
The Fairtrade Flowers and Plants standard applies to cut flowers, cut foliage and pot plants only.
Cut flowers, cut foliage and pot plants are part of the wider floricultural sector, which also includes bulbs and other live plants that are not potted (e.g. trees).
FT cut flowers, cut foliage and pot plants are cultivated in greenhouses/ plantations or are harvested in the wild. Certified producers ensure that all FT standards are adhered to (if applicable, also by subcontracted parties) and in case of wild harvesting, especially environmental standards 3.1.1.2 and 3.1.2.1 are closely observed.
Fairtrade cut flowersinclude flower buds and fresh flowers with stems and leaves harvested for decorative purposes that cannot be readily propagated. It does not include the roots, fruit or soil that may be associated with cut flowers.
Types: Cut flowers and flower buds of a kind suitable for bouquets or for ornamental purposes can be Roses, Carnations, Gypsophilas, Lisianthus, Cathamus, Hypericums, Statices, Chrysanthemums, cut lilies, Gerbera, Alstroemeria, and others.
Conditions: FT Cut flowers can be fresh, dried, dyed, bleached, impregnated or otherwise prepared.
Fairtrade cut foliage (sometimes called greens or fillers) can be leaves, twigs, branches and other decorative material from plants. Although cut foliage might have some flowers or flower buds the main difference with cut flowers is that cut foliage is usually not sold on its own, but is used as a decorative supplement in a bouquet/ flower arrangement. Cut foliage is usually derived from ornamental plants that are cultivated for repeated harvesting. Examples include philodendron, ferns, miscanthus green (china grass), dracaena, dieffenbachia, cordyline and ficus.
Conditions: Cut foliage can be fresh, dried, dyed, bleached, impregnated or otherwise prepared.
Fairtrade pot plants are cultivated for decorative purposes and maintained as live plants with roots kept in a pot and traded in this form.
Types: For marketing purposes pot plants are sometimes subdivided into flowering and ornamental plants[1]. Flowering pot plants are sold because of the decorative value of their flowers, for example orchids and potted roses. Ornamental pot plants are sold because of the decorative value of the leaves and stems, for example ornamental palms (e.g. livistona rotundifolia), aglaonema, cycads, succulent plants (e.g. cactuses), etc.
Conditions: FT Pot plants can be in a propagation stage (rooted or un-rooted cuttings), in a semi-finished stage or in a finished stage (ready-to-be-sold).
Dormant bulbs, tubers, tuberous roots, corms, crowns and rhizomes are not covered by the FT Flowers and Plants standard.
Other live plants that are not potted, such as trees, are not covered by the Fairtrade Flowers and Plants standard. / Rationale:
The scope of the standard explains which products can be Fairtrade-certified and which cannot. FLO Standards Unit decided to include these definitions, because many stakeholders have asked FLO about the scope of the standard, in particular regarding the type and conditions of flowers. It is proposed that some plant products (bulbs and trees) are excluded from certification, because It is not clear if the production methods of these products are very different from cut flowers, foliage and pot plants and if the premium levels need to be set differently. There does not seem to be a need for this kind of research now, as there has not been any interest in marketing these kinds of products.
Question:
1) Do you agree with the description of FT cut flowers, cut foliage and pot plants?
Yes
No
If not, please explain:
2) Do you agree that the Fairtrade standard should not be open for bulbs and trees?
Yes
No
If not, please explain:
Other comments:
1.2Product Groups(FT products for which a FT premium has to be paid)
Single stem cut flowers are cut flowers that are sold in the destination country either per piece or as part of a bouquet that is prepared in the destination country. For transportation purposes single stem cut flowers are usually packed together (“bunched”).
If they are used for bouquets, the flowers are re-arranged (if applicable), sleeved, labelled and have plant food added by the importer or a specialised company in the destination country. If they are sold per piece, they are usually labelled individually by the producer.
Ready-to-be-sold bouquets consist of cut flowers (of the same or of different kinds) and possibly cut foliage that are decoratively arranged in the producing country and sold unchanged in the destination country. The bouquets are arranged, sleeved, labelled and have plant food added by the producer.
Cut foliage is sold at the Point of Sale (POS) by the florist (i.e. in the destination country) when arranging a bouquet according to the clients fancy.[2] For transportation purposes cut foliage is bunched.
Pot plants are sold by the piece in the destination country. For transportation purposes pot plants are usually not packed individually. / Rationale:
Based on a preliminary consultation with key stakeholders, the Standards Unit has defined 4 product groups for which a FT premium has to be paid. Since a definition of “cut flowers, bouquets and ornamental plants” (these are the names currently used in the standard) did not exist in the standard, there has been some misunderstanding about some of these products, especially bouquets.
Question:
3) Do you agree with the definitions of single stem cut flowers, ready-to-be-sold bouquets, cut foliage and pot plants?
Yes
No
If not, please explain:
Other comments:
1.3Composition of bouquets
Bouquets that are arranged in the consuming country at the Point of Sale by the florist may contain non-certified ingredients. However, each type of flower in a bouquet must either be Fairtrade or non-Fairtrade. For example, a rose is a type of flower. If one rose in the bouquet is Fairtrade, then all roses must be Fairtrade even if the roses are different in colour. When Fairtrade flowers have been used in a bouquet, the florist must use a special sticker, declaring that the flowers are Fairtrade certified. These rules do not apply to cut foliage; it does not need to be declared and the florist may decide to mix Fairtrade and non-Fairtrade cut foliage freely.
In all other cases, all flowers and, if applicable, all cut foliage used in bouquets (e.g. bouquets that are arranged by the producer or the importer) must be Fairtrade certified.
/ Rationale:
The composition rules for bouquets are not mentioned in the existing standards. Labelling Initiatives have implemented their own rules for bouquets that are prepared by florists in the destination country. FLO Cert has developed a Trade Policy that reflects the rules that have been applied by Labelling Initiatives. Since the rules may differ per country FLO Standards Unit is proposing a more unified rule on the composition of bouquets.
Question:
4) Do you agree with the composition rules for bouquets that are prepared by the florist in the destination country?
Yes
No
If not, please explain:
5) Do you agree with the composition rule for bouquets that are prepared by the producer or the importer:
Yes
No
If not, please explain:
Other comments:
3. Certification
There are no additional requirements specific to Flowers and plants. / Rationale:
See section 1 of the draft Generic Trade Standards.
Comments:
4.Traceability
There are no additional requirements specific to flowers and plants. / Rationale:
See section 2 of the draft Generic Trade Standards.
Comments:
2. All Fairtrade contracts shall specify at least: minimum and maximum volumes, quality specifications, price and payment conditions. / 5. Contracts
There are no additional requirements specific to Flowers and Plants . / Rationale:
See section 3 of the draft Generic Trade Standards.
Question:
6) With regard to the generic rule on contracts, is there a need to include some additional requirements for the flower industry?
Yes
No
If yes, please explain which additional requirements and why:
7) With regard to the generic rule on contracts, is there a need to make some adjustments specifically for the flower industry?
Yes
No
If yes, please explain which adjustments you would suggest and why:
Other comments:

2.Long Term and Stable Relationship

Buyers and sellers will undertake to establish a long term and stable relationship in which the rights and interests of both parties are mutually respected; to this effect a written letter of intent for a standing order shall be worked out, specifying:
  • the volumes and varieties the buyer expects to be bought under Fairtrade conditions for a period not shorter than 6 months.
FLO expects the parties to trade 75 % of the Fairtrade volumes under conditions of such a standing order. / 6. Sustaining Trade
For Flowers and Plants the sourcing plan shall specify:
The volumes and varieties the FT Payer expects to be bought under Fairtrade conditions for a period not shorter than 6 months. FT Payers must purchase 75 % of the Fairtrade volumes under conditions of such a standing order.
Renewals must be given as a minimum three months before the expiry of the previous sourcing plan. / Rationale:
See also section 4 of the Generic Trade Standards. The product specific rule on sustaining trade has been included in the Fairtrade standards since 2004.
Question:
8) Is there a need to change the product-specific rule on Sustaining Trade?
Yes
No
If yes, please explain which changes you would suggest and why:
Other comments:
7. Prefinance / Credit
On request from the producer, the FT payer must make available upto 60% of the value of the contract in favour of the producer at any time after signing the contract. As a minimum the pre-finance must be made available at least six weeks prior to shipment. / Rationale:
The proposed rule on Pre-financing is based on section 5 of the Generic Trade Standard.
Producers’ access to pre-finance is considered as one of the core benefits of Fairtrade. Stakeholders and the Standards Committee confirmed that pre-finance should in principle be available to all types of producers regardless what type of product they produce, where appropriate. This means that also for flowers the provision of pre-finance should be applicable.
As in general hired labour situations tend to have more capital pre-finance is more likely to be requested from small producers’ organisations or smaller plantations.
For products that are open to both small producer organisations and hired labour situations it is argued that restricting pre-finance to Small producers’ organisations could create a trade barrier, since it may be more attractive for traders to source from Hired Labour producers instead of Small producer organisations. For flowers this will soon be the case as it is intended to extent the scope to Small Producer Organisations.
Question:
Taking into account the trade practices customary tothe flower industry, Standards Unit assumes that it might be difficult to apply the general rule on pre-financing in the flower trade.
9)With regard to the generic rule on pre-financing, is there a need to make some adjustments specifically for the flower industry?
Yes
No
If yes, please explain which adjustments you would suggest and why:
Other comments:

3. Prices and Premium

3.1The Fairtrade price is set as a contract price and shall be fixed with regard to the expected market developments and in the common interest of a stable price level.
3.1On top of the contract price a Fairtrade Premium shall be paid based on the FOB-value as paid by the importer.
3.2The Fairtrade Premium for single stem flowers from all Fairtrade certified producers is set globally at 12%of FOB-value.
3.3The Fairtrade Premium for bouquet flowers produced in Kenya is set at 8% of FOB value.
3.4The Fairtrade Premium for Ornamental Plants is set at 12% of FOB value
3.5The Fairtrade premium shall be paid directly to the account of the Joint Body of certified producer organisations. / 8. Prices and Premium
The Fairtrade price is set as a negotiated price or market price (where it exists) and shall be fixed with regard to the expected market developments and in the common interest of a stable price level.
On top of the negotiated price or market price a Fairtrade Premium shall be paid based on the FOB-value as paid by the importer.
The Fairtrade Premium for single stem cut flowers is set globally at 10%of FOB-value.
The Fairtrade Premium for ready-to-be-sold bouquets is set globally at 10% of FOB value.
The Fairtrade Premium for cut foliage is set globally at 10% of FOB value.
The Fairtrade Premium for ready-to-be-sold pot plants is set globally at 10% of FOB value
The Fairtrade premium shall be paid directly to the account of the Joint Body of certified producer organisations. / Rationale:
For the Rationale on Fairtrade Premiums please consultappendix 1 of this document!
Question:
10) Do you agree with the proposed Fairtrade premiums?
Yes
No
If not, please explain why:
Other comments:
9. Payment Terms
Payment shall be net cash against a full set of documents on first presentation. The documents to be presented will be those stipulated in the contract and the ones customary in the flowers and plant trade
For direct contracts involving fairtrade payers and producers, payment must be made according to the
international customary conditions, but as a minimum no later than 15 days after the receipt of the
documents transfering ownership.
For Contracts involving fairtrade producers and Exporters, payment must be made no later than 15 days
after receipt of the payment from Fairtrade payers / Rationale:
The rule on Payment Terms has been proposed by the consultant who is developing the Generic Trade Standard. The proposal takes into account the results of a preliminary consultation with FLO Cert and FLO PBU on this topic.
Question:
11) Is there a need to change the product-specific rule on Payment Terms?
Yes
No
If yes, please explain which changes you would suggest and why:
Other comments:

4.Information rights and obligations

FLO establishes a system of control of the Flow of goods for Fairtrade products, which make certification possible that Fairtrade flowers or plants bought by consumers are actually produced by Fairtrade certified farms, and traded under Fairtrade conditions. All growers and traders will periodically supply FLO with information about volumes bought and sold. All trading actors allow FLO to inspect their books. / Rationale:
It is proposed that section 4 of the existing Flower and Plant standard is deleted, because the new Generic Trade Standards will be covering these issues, as far as necessary.

Appendix 1