What is Fair Trade and how does it relate to the Eco market?
Generally speaking, Fair Trade refers to a set of initiatives taken by various parties in international trade to improve what is widely seen as an unfair balance between the producers of goods in developing countries and the major companies that import these goods.
In other words, the general consensus is that the producers and those working in commodities like coffee and sugar are not adequately compensated for their efforts.
This then leads to problems like unacceptably low standard of living as well as a myriad of socio-economic and environmental problems.
Fair trade and fair trade products have been gaining traction in formerly unknown areas as the industry continues to grow and develop. Yet, due to a lack of a unifying organization or network of organizations, they suffer from misconceptions about the nature of fair trade.
I want to share the basics of fair trade so you can understand the positives that come with a trade network that promotes community development and environmental sustainability in the developing world.
What exactly does fair trade mean?
- Fair trade centres on the idea of providing producers in developing countries the opportunity to sell their products in developed countries whilst promoting sustainability.
- Fair trade organizations provide labelling, marketing, and export methods to sell products in markets farmers from developing countries wouldn’t have access to.
- These fair trade organizations ensure that the products meet export quality and standards and that they were not produced in a manner harmful to the environment.
- You may pay a higher price for fair trade products but you are making sure your money will benefit the farmer who laboured for the materials in the field and not line the coffers of an international company that profits from exploiting poor farmers and workers.
Another factor that proponents of fair trade take into consideration is the negative ecological impact of certain industries in the exporting countries.
This negative impact takes a variety of forms that typically have to do with efforts being aimed at increasing productivity cheaply without taking into account the ecological effect and whether or not the methods being used are sustainable.
For example, coffee farmers may use hazardous chemicals as pesticides to kill insects and protect their crop without considering the consequences of the chemicals getting into the water supply or the long term effects on the soil itself.
Often, however, the farmers and companies involved are aware of the negative impact but the companies choose to act recklessly in favour of short term profits.
They are usually apathetic to the problems that these actions create and care only about making more money.
The farmers, in turn, typically have little or no bargaining power and must do whatever it takes to make ends meet. This perpetuates the irresponsible practices even as the resulting ecological damage continues to wreak havoc on the lives and livelihood of the local population.
To help solve this problem, many organizations aimed at promoting fair trade have sprung up in different regions over the years.
These include the World Fair Trade Organization and Fair Trade USA.
The organizations set standards that ensure better compensation for producers of commodities like coffee and sugar in developing countries while also examining the local situation in those countries for signs of reckless ecological damage as a result of irresponsible practices related the to commodity in question.
For example, if toxic chemicals are being used to kill pests in the soil and these chemicals are causing birth defects in children born in these areas, these organizations might mandate a ban on the chemicals in question if the importing company is to remain in good standing with the organization.
The significance of complying with the requests made by these organizations is that doing so allows the company to affix a sticker signifying that the commodity is a fair trade commodity and meets the criteria for being declared as such as specified by the accrediting organization.
This can have varying levels of impact depending on the market to which the product is being distributed.
Sometimes, consumers will prefer not to, or might even flat out refuse to buy products that do not fit this criteria especially if consumer awareness of the ill effects of unfair trading on developing countries is high as a result of campaigns or activism.
What are the goals of fair trade?
- The first goal of fair trade is to ensure a fair price for producers, farmers and workers.
- By guaranteeing a minimum price producers/farmers aren’t exploited by larger organizations working in the developing world.
- Farmers are even offered a premium for organic products.
- Fair trade organizations also work to ensure good working conditions for farm workers. Farmers or groups with poor labour conditions will not be approved for fair trade labels.
- Producers and farmers that offer fair labour conditions for their workers are then rewarded with more direct trade, fewer middle men, and the opportunity to decide how to invest the money as a co-op organization.
The intended result is improved community development and environmental sustainability.
The fair trade structure’s goal is to ensure that farmers receive revenue from their products and in turn value environmentally sustainable approaches.
What are fair trade products?
Common fair trade products are organic foods and produce although artisanal crafts in some countries may be certified as well.
Here are a list of some of the commonly certified fair trade products:
- Cocoa and chocolate
Fair trade products are certified by many different major fair trade organizations such as:
How can I purchase fair trade products?
Fair trade certified products can be sold by certified traders.
Developed countries that participate in fair trade have labelling initiatives that connect the producer network with local marketing organizations.
The majority of producer networks come from developing countries in Latin America, Africa, Asia, and the Pacific.
By researching the labelling initiative in your country you can find a certified trader near you.
Fair trade products attempt to bring sustainability and environmentalism to capitalism.
By protecting farmers, workers and producers in developing countries and putting market value into environmental sustainability fair trade organizations are sacrificing a marginal amount of the bottom line to promote a better future.
A system that chooses to improve the bottom line at the cost of exploiting developing countries damages everyone involved – not just the farmer labouring in a field in the developing world.