Why Fair Trade?
Fair Trade means giving producers in developing countries a fair price for their products we buy in our stores, and ensures that they enjoy better working and living conditions.
Under the current free trade system, small scale producers in developing countries get very little of what we pay for tropical agricultural products such as coffee, tea and bananas.
It guarantees a 'Code of Practice', which has been subscribed to by the members of the International Federation for Alternative Trade (IFAT), and aims to provide a forum for Southern producers and Northern importers.
The standards for fair trade prices and working conditions are set by the Fair Trade Labelling Organization (FLO) - the international body that inspects producer cooperatives, importers, and retailers; and ensure that they meet fair trade standards.
Four principles of Fair Trade
- Trading directly with democratically run co-operatives
Producer co-operatives are formed to market collectively, export independently of mid-level traders, and have a say in their future. Co-ops also pool resources for the good of their communities - e.g., building schools and health care centers from their increased revenues. - Pay a fair price for the product
Prices are negotiated based on the real costs of production and need, and not on obtaining the lowest possible price. - Offer affordable credit
Access to affordable credit is a huge problem for small scale producers. Often the only credit available is from mid-level traders who charge exploitative rates of interest. - Develop long-term relationships based on trust and respect
Co-operatives can count on Alternative Trade Organizations to buy their products on a long-term basis, thus allowing them to make longer term operating plans.
Criteria endorsed by Fair Trade Organizations
- An equitable partnership based on mutual respect between producers and consumers.
- A guaranteed minimum price to be paid to producers, which may involve a "surcharge" or premium over and above the world price
- No intermediaries and direct buying from the producers
- Control of production by the producers
- A commitment to improve social conditions for producers
- Care for the environment by encouraging organic methods for growing crops
- A long-term commitment to purchase