You have probably heard the term ‘fair trade’ before, but you may or may not be completely certain of its meaning, the system itself, nor the far-reaching impact fair trade has around the world.
In simple terms, fair trade is a social movement in which the primary objective is to secure fair trading conditions for farmers and producers in developing countries. Additionally, the movement is focused-on promoting sustainable farming practices as it relates to commodities such as chocolate, coffee, cocoa, flowers, fresh fruit, handcrafts, sugar, and wine.
There are a number of for-profit and non-profit organizations that establish the standards and provide certification for fair trade suppliers such as the World Fair Trade Organization (WFTO), Fair Trade USA, the Fair Trade Federation, and Fairtrade International. Although each organization has their own set of criteria, and their philosophies may differ in the allowance of corporations into the system; however, there are certain principles that are universally required and accepted by all parties involved in fair trade.
PRINCIPLE #1: DIRECT TRADE
The key factor and central focus of every fair trade organization is to reduce poverty in developing countries by creating opportunities for economically disadvantaged producers. This is accomplished by establishing avenues of direct trade between importers and producers. By removing the middleman from the process, the importer is then able to provide a larger share of the profits made from the products sold on the shelves to the producer of said products. Importers often conduct business with cooperatives that run their own farms with little to no hired labor. In order to remain compliant, these collectives must be democratically-run, with each worker receiving a vote, and their profits must be split equally among all members of the cooperative.
PRINCIPLE #2: FAIR PRICE
Regardless of how the market may be performing, the fair trade system ensures farmers receive a reasonable minimum price for their crops. Moreover, importers are obliged to compensate producers in an expedited manner. Fair trade products are typically sold at a higher mark-up than their traditional trade counterparts; however, dealers guarantee producers a fair wage for their products, and in return, the producers commit to providing decent working conditions for employees and to conduct their operation in a sustainable manner. Importers often provide producers with an extended-line of credit to ensure they have all the resources needed to produce a successful yield on-time.
PRINCIPLE #3: DECENT CONDITIONS
Fair trade requires that producers provide and maintain a safe and healthy working environment for their employees. Furthermore, the use of child labor, forced labor, and worker abuse is banned, along with all forms of harassment and discrimination – including discrimination based-on political affiliation or union membership.
PRINCIPLE #4: RESPECTFUL RELATIONSHIPS
The fair trade movement promotes open-dialogue, full-transparency, mutual-respect and accountability among producers, importers, and consumers. Producers are required to be transparent in their management practices and commercial relations, in addition to being entirely accountable to their stakeholders, partners, and/or members – respecting the sensitivity of the information supplied. Furthermore, producers must find appropriate, interactive ways to involve employees and members in their decision-making processes. In turn, importers provide producers with the most relevant, up-to-date information and market analysis, provide insight into the most sustainable practices, and provide technical assistance when applicable.
PRINCIPLE #5: COMMUNITY DEVELOPMENT
As it was said earlier, fair trade products tend to cost more than their traditional counterparts. In addition to the regular price for their goods, producers earn a premium to invest in their communities. Projects such as building new schools, providing scholarships, improving nutrition and healthcare, and developing better water distribution services are some of the things that these funds go toward. Producers can also dedicate a portion of these funds to their business, by investing in irrigation equipment or on organic certification, which enables them to earn higher prices from future transactions.
PRINCIPLE #6: ENVIRONMENTAL SUSTAINABILITY
Not all fair trade products are organic; however, all producers involved in fair trade are required to maintain a sustainable operation that protects natural resources such as water, soil, and general vegetation. Any use of harmful pesticides and fertilizers is restricted, and the use of genetically modified organisms (GMOs) is specifically banned for all fair trade products. (Energy Use/Consumption) …
PRINCIPLE #7: RESPECT FOR LOCAL CULTURE
Fair trade importers commit to preserving and respecting the cultural heritage of the producers with which they work. Rather than forcing them to adopt and implement the most recent, efficient methods for producing goods, producers are able to utilize traditional practices, in addition to learning about the newest techniques. This allows producers to keep with their traditions while still increasing their production to meet the market’s demands.
Ultimately, the purpose of fair trade is to ensure small farmers remain an active part of the international marketplace and aims to empower consumers to make purchases that support their values. Although there might not be the wide selection of items outside of handcrafts and commodities, the products that are available are most often high quality items. And, while fair trade products may cost a little more at checkout, the extra money goes directly to the farmer and/or producer who created it, it assists with building and empowering communities, and the system is focused on promoting sustainable methods to preserve natural resources. Given these points about the system of fair trade and the benefits that come from it, people should make an effort to purchase fair trade products to support our international friends in need of the support.