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FAIR
TRADE 101
Reprinted
with permission of Fair
Trade Resource Network.
Featuring
some of the most frequently asked questions about Fair Trade.
The basics
* What is Fair Trade?
* What does “fair” really mean?
* What Fair Trade products are available?
Shopping
Fair Trade
* How do I know that a product is Fair Trade?
* Do Fair Trade goods cost more than comparable non-Fair Trade
goods?
* In the case of agricultural goods, is the quality comparable
to commercial products?
The
impact for producers
* What is a fair wage?
* How much money (percent of sale price) do the artisans make?
* Because Fair Trade sales are still low compared to other sectors
in northern markets, is Fair Trade’s impact significant?
* Products sold by Fair Trade Orgnizations are often items like
crafts. How can Fair Trade provide stability to producers if it’s
based on non-essential items?
* Why do Fair Trade Organizations support cooperative workplaces?
* How do Fair Trade Organizations offer financial support to producers?
* How do Fair Trade Organizations offer technical support to producers?
The
basics
What
is Fair Trade?
Fair Trade is an alternative way of doing business - one that
builds equitable, long-term partnerships between consumers in
North America and producers in developing regions. Fair Trade
businesses commit to:
* Paying a fair wage in the local context.
* Offering employees opportunities for advancement.
* Providing equal opportunities for all people, particularly the
most disadvantaged.
* Engaging in environmentally sustainable practices.
* Being open to public accountability.
* Building long-term trade relationships.
* Providing healthy and safe working conditions within the local
context.
* Providing financial and technical assistance to producers whenever
possible.
These
Fair Trade criteria were established by the Fair Trade Federation.
What
does “fair” really mean?
The word "fair" can mean a lot of different things to
different people. In alternative trade organizations, "Fair
Trade" is about more than just paying a fair wage. It means
that trading partnerships are based on reciprocal benefits and
mutual respect; that prices paid to producers reflect the work
they do; that workers have the right to organize; that national
health, safety, and wage laws are enforced; and that products
are environmentally sustainable and conserve natural resources.
What
Fair Trade products are available?
In North America, there are many Fair Trade craft products available--decorative
home accessories, jewelry, textiles, etc. Fairly traded coffee,
tea, and chocolate are also widely available, and we are starting
to see an influx in fair trade produce, most notably bananas.
Items, such as Fair Trade sports balls and apparel, are also starting
to appear.
Shopping Fair Trade
How
do I know that a product is Fair Trade?
Some Fair Trade products, like coffee and chocolate, are Fair
Trade Certified (tm) and carry a label or "seal." For
other products, like handcrafts, there is not a certification
system. The following concepts are helpful in understanding the
difference between certified and non-certified products. It is
important to know that the goal of Fair Trade is to empower low-income
artisans and farmers to better their lives. This mission drives
Fair Trade. Although a label can be an important indicator of
this aspiration for farmers, looking beyond a label leads to a
vibrant world of Fair Trade artisans and craftspeople.
Fair
Trade Certified* The TransFair label is currently only for
food products. The Fair Trade Certified (tm) logo is an independent
certification that adheres to monitoring criteria and standards
set out by the Fairtrade
Labeling Organization. Since 1997, FLO has established common
principles, procedures and specific certification requirements
for Fair Trade. Currently FLO only certifies commodities. The
reasons are numerous and complex, but in general relate to the
fact that “The very variety of handcrafted items are their
strength...unique handcrafted items are not subject to direct
comparisons with regard to price and performance.” (Fair
Trade Yearbook, p. 159)
Fair
Trade Federation* Fair traders of handcrafts work directly
with artisans to guarantee Fair Trade standards (see What is Fair
Trade?). Fair Trade Organizations (FTOs, also known as Alternative
Trade Organizations, ATOs) work with low-income artisans to market
their products and build their businesses. FTOs, many of whom
are members of organizations like the Fair Trade Federation (FTF)
or the International Fair Trade Association (IFAT), adhere to
Fair Trade criteria including workers' pay, environmental practices,
and good working conditions. When you purchase home furnishings,
clothing, or crafts from FTOs, particularly those reviewed by
national and international associations like FTF and IFAT, you
can be certain that Fair Trade principles were respected. Consumers
also know they they have purchased a unique item representing
not only the talent of the artisan--often a woman from a developing
country--but also the culture and traditions of the source country.
**
Please note - in order to be FTF certified a company must
carry 100% FT items. Here at Taraluna, we also carry organic and
natural items that are made in the USA with all of the protections
enjoyed by US citizens including safety, working age and minimum
wage requirements. We also carry locally made items, and items
that do not fall under the umbrella of Fair Trade Certification.
Because of this we carefully choose items from companies that
DO meet FTF certification standards and many of our products carry
the certification logo but because we do not carry 100% FT we
cannot belong to the FTF or carry their seal on our website. Our
FT certified items will have the seal directly on the packaging.
On other items you may find the Organic seal among other certifications.
Taraluna is proud to be an approved member of Green America (formerly
Co-op America), the Fair Trade Alliance and we have achieved Gold
Level GenGreen Certification: "Companies that scored above
75% on their certification tests and are the highest level of
approval available within GenGreen. These companies have proven
themselves exemplary environmental stewards in their various business
activities." **
Consumers
in search of Fair Trade products have a vast array of products
to choose from. The Fair Trade Certified label and membership
in associations like FTF and IFAT help identify Fair Trade products
that are produced according to Fair Trade standards. Looking beyond
the label to the trading relationship, consumers can identify
FTOs that offer access to high-quality crafts and entry points
into the way of life of other people.
Do
Fair Trade goods cost more than comparable non-Fair Trade goods?
Generally, fairly traded crafts don't cost more than other goods
because the large percentage taken by middle people is removed
from the equation. The cost remains the same as traditionally
traded goods; however, the distribution of the cost of the product
is different.
In
the case of agricultural goods, is the quality comparable to commercial
products?
In some cases the quality is actually higher because Fair Traders
factor in the environmental cost of production. For instance,
in the case of coffee, fairly traded coffee is often organic and
shade grown, which results in a higher quality coffee.
The impact for producers
What
is a fair wage?
Producers receive a fair wage when they are paid fairly for their
products. This means that workers are paid at least that country's
minimum wage. Since the minimum wage is often not enough for basic
survival, whenever feasible, workers are paid a living wage, which
enables them to cover basic needs, including food, shelter, education
and health care for their families. Paying fair wages does not
necessarily mean that products cost the consumer more. Fair Trade
Organizations bypass exploitative middlepeople and work directly
with producers.
How
much money (percent of sale price) do the artisans make?
Given the different regions of the world, production circumstances,
and Fair Trade intermediaries involved in delivering a product
to the consumer, it is difficult to say with certainty. An informal
survey of Fair Traders seems to indicate a retail ratio of 1:6.
What is certain is that Fair Traders are obliged not to exploit
producers and to guarantee that the trading relationship is a
true partnership, allowing all to make a fair profit margins.
Because
Fair Trade sales are still low compared to other sectors in northern
markets, is Fair Trade's impact significant?
For a Peruvian weaving cooperative making only a few hundred dollars
a year, a $1,000 craft sale to a Fair Trade Organization is a
significant increase in income. In some parts of the world, Fair
Trade earnings are turned over to the community to improve quality
of life. The money may fund a potable water system or provide
health education or bring an adult literacy program to the community.
Other examples abound and FTRN will be relaying these to you as
our site grows.
Products
sold by Fair Trade Organizations are often items like crafts.
How can Fair Trade provide stability to producers if it's based
on non-essential items?
Craft items often play an important cultural and practical role
in the society in which they're produced. Clothing, utensils,
bowls, baskets, and ritual items are useful in our own lives and
in the lives of the producers. As we embrace becoming citizens
of the world, our appreciation for cultures other than our own
is magnified and extended. Fair Trade gives us the opportunity
to acquire items such as table linen, blankets, and decorations
that are produced using traditional skills.
Why
do Fair Trade Organizations support cooperative workplaces?
Cooperatives and producer associations provide a healthy alternative
to large-scale manufacturing and sweatshop conditions, where unprotected
workers earn below minimum wage and most of the profits flow to
foreign investors and local elites who have little interest in
ensuring the long term health of the communities in which they
work. Fair Trade Organizations work primarily with small businesses,
worker owned and democratically run cooperatives and associations
which bring significant benefits to workers and their communities.
By banding together, workers are able to access credit, reduce
raw material costs and establish higher and more just prices for
their products. Workers earn a greater return on their labor,
and profits are distributed more equitably and often reinvested
in community projects such as health clinics, child care, education,
and literacy training. Workers learn important leadership and
organizing skills, enabling self-reliant grassroots-driven development.
How
do Fair Trade Organizations offer financial support to producers?
Small-scale farmers and artisans in the developing world lack
access to affordable financing, impeding their profitability.
Fair Trade Organization members that buy products directly from
producers often provide financial assistance either through direct
loans, pre-payment, or by linking producers with sources of financing.
Unlike many commercial importers who often wait 60-90 days before
paying producers, many Fair Trade Organizations ensure pre-payment
so that producers have sufficient funds to cover raw materials
and basic needs during production.
How
do Fair Trade Organizations offer technical support to producers?
Fair Trade Organizations provide critical technical assistance
and support such as market information, product feedback and training
in financial management. Unlike conventional importers, Fair Trade
Organizations establish long term relationships with their producers
and help them adapt production to changing trends.
We
would like to thank the
Fair
Trade Resource Network for
permission to reprint this article.
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