Understanding Fair Trade


Fair Trade as an Idea

Fair Trade is a certification process that protects small-scale farmers from exploitation in producer countries. It does this by building a worker cooperative system that ensures a set of ideals and standards are put in place to shield workers from market fluctuation, and extortion by middlemen. It also provides a premium to invest in community development. 


Fair Trade as an Economic Tool for Abolishing Poverty

Fair Trade is a certification process that protects small-scale farmers from exploitation in producer countries. It does this by building a worker cooperative system that ensures a set of ideals and standards are put in place to shield workers from market fluctuation, and extortion by middlemen. It also provides a premium to invest in community development. 

1. Middle Men

Let's take coffee in Ethiopia as an example. Ethiopia is the best place in the world to buy high quality coffee, the most delicious of which is grown high up in the mountains. In order to harvest this coffee rural farmers have to live far from the infrastructure of the city. These farmers are among the poorest in the world, and they do not own nor are they near any trade route systems that can bring their coffee to the market. What then happens is that a middle man with a truck will take a farm-gate price. This price is significantly lower than the market value. This leaves Ethiopian farmers on average with far less than $1 a day to sustain their livelihood. (Barrett, Planet Bean) Fair trade cuts out this middle man by offering a fair trade premium that small-scale farmers can use to establish their own transportation systems.             

2. The Free Market 

The free market is an assumption that competition and innovation will balance out the market price for goods through an invisible hand. However, this free trade market capitalist system often works to drive down prices as well as wages in order to exploit the natural world in exchange for economic development. This system increases income inequality and concentrates wealth in a small percentage of the population. (Fair Trade Toronto) A major problem for us as consumers is a lack of traceability and accountability in this system.  Fair trade offers a minimum price, and alternative trade organizations often pay above that to grow community development. For consumers it offers a certification system that allows us to make responsible decisions to encourage this trade practice. 

3. Short Term Relationships

The amount of investment that goes into running a small scale farm is high. Often small scale farmers eat through subsistence farming, meaning they grow what they eat. When a company drops them as a supplier to seek cheaper alternatives, these farmers lose their land and therefore, their food. Fair trade encourages long term partnerships that protect farmers from these maximum profit seeking sourcing procedures. 

3. Community Development that go Beyond the Valuable Commodity

Fair trade offers a social premium that is used by the producer co-op to build infrastructure, often this takes the form of capacity building initiatives, education, health care, and women's empowerment programs.


How We Can Change This


Buy Fair Trade: 

 Without consumers there are no producers. At this point in time not everything is available through fair trade so we must work with what is available to us. Do not think that this is an all or nothing campaign, you don't have to throw out all of your food and clothing and replace them with Fair Trade certified products, as this idea is simply unrealistic. 

Always remember that this is a marathon; not a sprint. Make the transition slowly and effectively; chose one product e.g. coffee, and slowly explore what options and brands are available. Once you've comfortably made the switch; move to the next product. This will help to reduce the overwhelming scope of adjusting your purchasing habits. 


Be Cautious


 Many larger companies are aware of this certification becoming a powerhouse in the market. Many of these companies are seeking alternative self-run initiatives. This is because these companies do not want to be subject to third party auditing, maintain long term relationships, or pay a minimum price. This auditing process is the key to true accountability; without them there is no way to monitor producer prices and working conditions. 


 When you can, buy from a worker co-op


 Worker co-ops often pay above fair trade prices and usually buy 100% fair trade. Starbucks fair trade purchases only reflect 1% of their total sales, yet they market themselves as a sustainable company. They don't publically disclose what co-ops they buy from, and they lobby to change how fair trade coffee is managed to increase their profits. This is not the level of accountability that we should be expecting.



Like Fair Trade:

On Facebook, Twitter, Pinterest, Google, really whatever social media outlets you can. 


Advertisements have evolved exponentially since the internet boom in that we now have Social Media Targeting. This development is a method of optimizing social media advertising by using profile data to deliver advertisements directly to individual users. With that knowledge it can be assumed advertisers have compiled data on almost every single individual with a computer, phone, or tablet. With this marketers have an indisputable record of what people want. If there is a sudden boom in Canada of individuals liking fair trade and fair trade brands their advertisement feed will start displaying any ad in the pool of companies that are similar to fair trade.  This will give companies proof that these products are desired and the transition to a 100% sustainable future will become priority from a business marketing perspective.  

Step it up a notch by deleting all other interests.

Companies don't need to know that you like dubstep, they should however know about your fondness for not buying anything made under indentured servitude conditions. 

What you focus on expands. In doing this you will over time gain exposure to the culture of Fair Trade and ethical purchasing. This will happen because most of the information given to you without your consent (advertisements) will be within the realm of achievable change. This has psychological ramifications as you will be exposed to positive outcomes of this social justice movement. This process helps reduce the fatigue and overwhelming scope of taking part in a global movement. 

Fair Trade Standards

  • Democratic organizations: Fair Trade farmers and farm workers decide amongst themselves how to invest Fair Trade revenues in their communities.
  • Fair labour conditions: Workers on Fair Trade farms enjoy freedom of association, safe working conditions, and living wages. Forced child labour is strictly prohibited.
  • Direct trade: With Fair Trade, importers purchase from Fair Trade producer groups as directly as possible, eliminating unnecessary middlemen and empowering farmers to develop the business capacity necessary to compete in the global marketplace.
  • Long-term relationships: Companies engaging in fair trade seek to develop long-term relationships that producers can count on in the future.
  • Pre-Harvest credit: Under conventional trade, farmers have to front all the money for a growing season themselves. This can mean either unreasonable interest rates, or not receiving credit at
  • Community development: Fair Trade farmers and farm workers invest Fair Trade premiums in social and business development projects, like scholarship programs, quality improvement training, and organic certification.
  • Environmental sustainability: The nature of the Fair Trade certification system means that farmers and producers have to follow a strict set of standards. Over the last few years, environmental standards have been added to the Fair Trade criteria and now nearly all Fair Trade products in Vancouver are also certified organic.

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