The global financial meltdown underlines an urgent need for greater support for small-scale agriculture to battle rising hunger and help farmers in developing countries weather stormy times, fair trade activists say.

Farmers who belong to the fair trade movement - which advocates fair prices and sustainable agriculture - say they get some protection from wild market fluctuations exacerbated by the economic crisis.

But hundreds of millions remain acutely vulnerable.

"The fertiliser that we use for tea has gone up almost three times," Silver Kasoro-Atwoki, a tea grower from Uganda, told AlertNet. "The cost of fuel has also gone up so high, so the cost of transport and fertiliser have gone up significantly as a result of the economic crisis. It is biting us hard."

Kasoro-Atwoki was in London to represent small farmers at a conference on the human impact of the global food crisis and the business case for supporting small farmers.

Fair trade farmers in the developing world receive a premium for crops that can be invested back into their own communities. The system ensures farmers receive a price sufficient to cover the cost of producing their goods.

Some 450 million small farms around the world are home to 2 billion people, a third of all humanity, and are therefore important in increasing the production of food for both local and national consumption, international trade activists say.

But these farms are also home to half the world's hungry people.

Experts say small farmers must be at the centre of any strategy to tackle hunger. This would reduce poverty and increase food production. It would also help protect the environment as the fair trade movement insists farmers meet certain standards.

VOLATILE PRICES

Before the economic downturn, things were already bad enough for small farmers as they worked on ever shrinking plots, often with poor irrigation and limited infrastructure, and struggled against the ravishes of climate change. Many, particularly in sub-Saharan Africa, were also up against the impact of HIV/AIDS.

Spiralling food, fuel and fertiliser prices have now compounded their problems with many families having to spend up to 80 percent of their household budget on basic food items, a Fairtrade Foundation report shows. That means they buy more food than they sell. Even a small price fluctuation can have a terrible impact.

Global food prices have been driven up by factors including growing demand for biofuels, an increasing appetite for meat as India and China become wealthier, high fuel prices and market speculation.

But it is the retailers and middlemen, not the producers, who stand to gain from high prices. For most farmers, price increases simply push them further into poverty. Activists say it's now vital to ensure small producers also receive their fair share when prices go up.

"With the high prices of food, the people who ought to have benefitted ought to have been the farmers, but our reality shows that it is not so," said Renwick Rose, from the Windward Islands' Farmers Association.

While the economic downturn has pushed prices down since they peaked last June they remain generally very high in developing countries. And there is evidence to suggest they will rise again, according to the Fairtrade Foundation.

SMALL POTATOES

In an increasingly hostile climate, where ten food retailers control around a quarter of the $3.5 trillion world food market, small farmers are finding it difficult to get a fair slice of the pie.

"Small scale agriculture is complicated to run in a world that is dominated by agribusiness," said Rosie Boycott from the London Food Board, a partnership of food experts and organisations including the British government.

"It is astonishing that three companies own roughly 90 percent of the world's wheat. That is actually disgusting in my view."

Mark Curtis, an author and food crisis consultant, says talking about global agriculture without addressing corporate power "is like talking about malaria without mosquitoes".

Global consumer spending on Fairtrade products was 1.1 billion pounds ($1.57 billion) in 2006 - a 42 percent increase on the previous year, according to FLO International, an agency that develops and reviews fair trade standards.

A report from The Fairtrade Foundation shows sales of fair trade products rose by 43 percent, to an estimated 700 million pounds ($1 billion), in Britain in 2008 and this figure is expected to double in the next two years.

But farmers can only sell a fraction of their produce to fair trade because the market is still minuscule compared to the general commodity market and there is growing competition from small producers across the globe trying to get into the fair trade market.

Tea grower Kasoro-Atwoki only sells 3 percent of his total produce through the fair trade movement. But even so, the benefits are substantial, he says.

The money goes into social improvements and can also be used to increase farmers' ability to grow products that can compete in conventional commodity markets, Kasoro-Atwoki explains.

Some 7.5 million farmers have placed their trust in the fair trade movement since it took off in the late 1980s.

Tomy Mathew, a cashew farmer from Kerala in India, says it's now time to repay that trust. "You have the advantage that you have made the farmers immune from this massive wave of fluctuations, we now need to leverage on that and move it a step further to expand it to trade in general," Mathew adds.

"Fairtrade needs to be seen as a platform as one of the small battle fronts in the wider war for trade justice to try and prove that alternate trade is possible."

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