The Impact of Fair Trade on Smallholders' Capacity to Adapt to Climate Change

Abstract

The aim of this paper is to assess to what extent producers' participation in fair trade can increase their adaptive capacity and make them more resilient to climate change. Based on the adaptation deficit framework of Fankhauser and McDermott (2014) and an expert interview with 39 producer organizations from Latin America, Asia and Africa, we first determine the perception and the impacts of climate change on fair trade producers' organizations. We then analyze how fair trade is helping producers to increase their adaptive capacity. Our results suggest that fair trade affects the adaptive capacity of smallholder farmers in developing countries in two ways. First, it can work as a growth policy and affects the disposable income, which is then partly spent on adaptation measures. Second, by increased knowledge exchange, a higher degree of social capital and a better access to the international community, it makes the supply of adaptation more efficient.

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