Understanding Fair Trade

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Many Americans are hearing more about fair trade these days, which is fortunate, given the tremendous benefits this system offers to people and planet. Fair trade is both an organized social movement and a market-based approach that aims to create better trading conditions for producers in developing countries.

Fair Trade Worker Collecting Coffee Beans

How is fair trade defined?

Fair trade labeling organizations generally use the definition developed by FINE, an association of four international fair trade networks including Fairtrade Labeling Organizations International, World Fair Trade Organization, the Network of European Worldshops, and the European Fair Trade Association.

FINE defines fair trade as “a trading partnership, based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers. Fair trade organizations, backed by consumers, are engaged actively in supporting producers, awareness raising, and campaigning for changes in the rules and practice of conventional international trade.”

How does fair trade work?

According to Green America, a base price is set for Fair Trade Certified products by the international Fair Trade Labeling Organization that aims to cover the cost of production and a living wage for food, shelter, clothing, education, and medical care. Importers and retailers are then screened and certified by TransFair USA to ensure that they pay the Fair Trade price for products. The cooperative receives a set amount of money for each Fair Trade product─called the social premium─which is invested in community development projects democratically chosen by the cooperative.

How does fair trade help the environment?

A characteristic of fair trade farmers and artisans is respect for their natural habitat and sustainable production methods, such as integrated crop management and avoiding toxic agrochemicals for pest management. In fact, nearly 85% of Fair Trade Certified coffee is organic. Many fair trade members work directly with producers to develop products based on the sustainable use of their natural resources. This motivates communities to preserve and maintain their environment.

In the last decade, due to greater consumer awareness, fair trade sales have increased tremendously, sparking the expansion of Fair Trade Certified products. Along with coffee, these include chocolate, sugar, spices, wine, fruit, clothing and accessories, home décor, body care, toys, games, and more.

The Fair Trade Certified label helps you make choices with the confidence that your product is socially just and environmentally sustainable. Stay tuned for more information on fair trade, and how you can benefit from supporting this system with your consumer dollar.

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One Comment for “Understanding Fair Trade”

  • that the international “free trade” we have auactlly squashes or completely eliminates REAL free trade at the local level. Think of it this way. Corn in the U.S. is subsidized. That means that taxpayers pick up a hefty portion of the costs for growing corn. That means that the U.S. can sell corn in other countries (like Peru) for less than the cost of a native Peruvian to grow it. Naturally, the native Peruvian does what his pocketbook dictates and buys the cheaper American corn. In so doing, he drives his local Peruvian farmers out of business. Those farmers are not “free” to compete in the marketplace.The point? There’s nothing “free” about what passes as “free trade” today.Thanks for this fantastic post, and for sharing it with everyone in today’s Fight Back Fridays carnival.Cheers,KristenM(AKA FoodRenegade)

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