What is Fair Trade

The goal of fair trade is to ensure that farmers and workers in developing countries are not trapped in the cycle of poverty. For business that adhere to fair trade practices, this means not just paying these workers more in the short term, but also helping them improve their skills, build up their communities, and protect the local environment so that the resources can still be enjoyed by future generations.

Fair trade is necessary because given the kind of global supply chains that bring people items like coffee and chocolate, there are numerous middlemen between the farmer and the consumer. This includes the buyer, processor, exporter, broker, food corporation, distributor, grocery store. In a lot of cases, most of the money you spend as a consumer goes to the middleman, with very little allocated to the people who grew and harvested products.

How does fair trade work?

Under the fair-trade system, almost all of the middlemen between producer and consumer are eliminate, in such a way that the end user is buying as directly as possible from the farmer. Under a regular fair-trade arrangement, a local retailer will purchase the product from a distributor, who then purchases it directly from a cooperative of farmers who grow, for instance, crops in a certain country.

In order for a certain brand, product, or organization to earn a fair-trade label, the farmers need to guaranteed a minimum price for their harvest to not only make sure that costs are covered, but that they also have enough to reinvest in their families, businesses, and communities. They must also adhere to certain environmental standards, including water pollution prevention and forest protection, and be GMO-free.

Key Principles of Fair Trade

These are the key principles of fair trade: first, trading practices are fair and not one-sided. Second, the prices paid are fair and sufficient for producers and workers to earn more than enough to meet their daily needs. Third, that payments are often done ahead of time to ensure that the supplier can meet the orders. Fourth, that producers and workers have freedom of expression. Finally, that production is done where there are safe working conditions, taking into account the non-discrimination and welfare of children.