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What is Fair Trade and Does it Make a Difference?

What is Fair Trade and Does it Make a Difference?

We've all heard the term fair trade, and the word conjures up images of chocolate, coffee, and happy farmers. Most consumers have an idea that fair trade products are a good thing, but they're not exactly sure why.

With 86% of millennials looking for socially conscious products, fair trade seems like a no-brainer. But what exactly does fair trade mean, and why is it such an essential part of making responsible consumer decisions? 

What Is Fair Trade?

Fair trade is a global revolution that champions manufacturers and producers. It promotes fair prices, sustainable livelihood, and better wages for the farmers and workers who produce these essential products and produce. This revolution has already gone a long way in improving the conditions of workers in factories and plantations in the countries of Africa, South America, and Southeast Asia. 

Fairtrade International is the certification body that regulates fair trade practices across the globe and oversees several other fair-trade organizations in operation in different areas. For example, in North America, Fair Trade America is a non-profit organization charged with investigating and certifying products that comply with specific standards.  

What Products are Fair Trade? 

Fair trade coffee is one of the most standard products found in the fair trade market. This is mainly because of the amount of progress made in improving the lives of coffee plantation employees in various locations of the world. But many other products have also seen improvements in sustainability, improved prices, and a wide variety of other enhancements. Some other products in the fair trade market include seafood, coconut oil, vegetables, honey, wine, cotton, flowers, furniture, tea, cocoa, and gold.  

Fair Trade

How Does Fair Trade Work? 

The goal of fair trade is to ensure that farmers and producers are adequately compensated for the products they provide. There are four stages of the certification process.  

1. Formation of Cooperatives. Farmworkers must be organized in a democratic fair trade cooperative to qualify for certification.  

2. Third-Party Audits. The cooperatives then have their processes audited to ensure that they comply with the standards set for fair trade. If they meet the criteria, they will be eligible for fair-trade certification.  

3. Certification. The certification board reviews the audit and allows the cooperative to use a fair trade label.  

4. Pricing. After reviewing the prices set by buyers and other producers, the fair trade organization sets a minimum wage that should be paid to producers. This price covers the costs of sustainably producing their crop in the face of a fluctuating market.  

4 Benefits of Fair Trade 

In theory, fair trade provides small workers and producers the protection they need to run a sustainable operation.  

1. Income Sustainability. By setting minimum prices, fair trade offers workers protection against erratic market prices, an exceptionally competitive corner of the market. If the market price drops off suddenly, the workers still collect their minimum salary and cover their basic living expenses.  

2. Environmental Sustainability. Fair trade promotes improved farming practices that are eco-friendly and avoid harmful agricultural practices.  

3. Community Development. Extra cash collected by the Free Trade Premium is deposited into a bank account managed by the Local Fair Trade cooperative. This can be used in a variety of ways to improve the lives of workers and farmers.  

4. Safe Working Conditions. Fair trade works to improve the operation's working conditions and safety standards they certify. They staunchly forbid discrimination, child labor, and any form of forced labor or slavery.

Final Thoughts

Nearly 2 million farmers, over 100 countries, and more than 30,000 products are involved in the fair trade movement. And when you treat farmers and workers fairly, everyone wins. Fair trade is good for businesses, it's good for shoppers, and it's good for our planet. 

Shop our Collection of Fair Trade Gifts >

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