Principles And Practices Of Fair Trade

What are the key principles of Fair Trade?

There are a number of principles. Different principles take on different meanings for fair trade organizations, but the basic ones are the idea of paying a fair price - that is the real foundation and key in fair trade is that a fair, sustainable price is being paid. Also, fair wages are then being paid to the producers. There are also issues of gender equity, which is an important principle. The environmental sustainability is also an important principle. In addition to payment of a fair price, making some kind of capital available up front is often a principle that is followed. Capacity building is one that a lot of fair trade groups talk about, with reference to not just placing orders, but actually helping businesses to be sustainable and self-sufficient by helping them to develop good management skills, and basically offering them assistance to develop really good businesses. Another important principle is long term relationships, so that fair trade isn't just about this particular transaction but that it is about building a long term relationship with these producers. The benefits of paying a fair wage and environmental sustainability are long term ways for a community to develop, and not just once-off deals.

What practices does Fair Trade encourage?

Fair Trade organizations deal with organizations that value the contribution of the members. Fair Trade encourages working in co-ops that are democratically run, and that way people that are working have a stake in the future of the organization, and have some sort of say in what the money that the organization makes is allotted to. It encourages community building in those co-ops; it encourages people to reinvest in their community, whether that's through environmental sustainable practices and production, or whether that's through working to employ different disadvantaged producers even in their own area. There's a workshop in Kenya called the Bombolulu Workshop that specifically employs disabled artisans who are blind or have a different disability. It encourages this practice of supporting, even as we think of buying things from developing countries, from disadvantaged producers, it encourages the practice of those groups supporting the disadvantaged producers even in their own community, employing people who would otherwise have a hard time finding a way to make an income.

How much money do the artisans and producers make?

Establishing a fair price requires a certain amount of conversation and openness, the amount of money that is going back directly to the artisan; it is not a hard and fast number. What is important in fair trade is that because it's direct trade, the producer is getting the maximum amount of return from the purchase. In conventional trade sometimes that is very small, less than a percentage. Often in fair trade, that's fifteen percent, maybe even as high as thirty percent. It's not that those are set numbers, but what you see, consistently, is that the producer is getting more from your purchase; that more of that is going back to them, and that is what is really important.

What does 'advance credit' mean in Fair Trade?

Advance credit is an important part of fair trade, because often in working in places with disadvantaged producers, one of the major obstacles that these producers face is having some sort of capital to begin to form a business with. It takes different shapes for different fair trade organizations. For Ten Thousand Villages, the advance credit means a payment of 50% of the order up front. With that 50%, the co-op is able to purchase the raw materials that they need to fill that order. It is giving some of the resources up front that a business needs in order to get things going, and sometimes helping them overcome that obstacle of not having access to credit and not having capital to work with

How does Fair Trade eliminate middle men?

Fair Trade eliminates the people that are often in the middle of trade relationships who take perhaps an unfair chunk of the money, by making trade more direct. The basic idea of fair trade is that there should be as little space as possible between the consumer and the producer. Fair trade organizations try to be as minimal a player as possible in that connection, often operating on as low an overhead as possible, so that they can make their prices competitive and provide as direct an access as possible to the producer, to ensure that as much money as possible is going back to that producer.

Are there Genetically Modified Organisms (GMOs) in Fair Trade products?

Especially in agriculture, a lot of fair trade, even if it's not certified organic, is organic because it is grown in small scale farms and it's grown using methods that are environmentally sustainable. Using a bunch of chemicals or the kind of engineering of genetics that's behind the GMOs in some way violates some of the ideas of what fair trade is about. It is a side note in some ways, even as organic is important, but it's funny that some farms has grown, say Fredricks Coffee just haven't gotten the organic certification, because it is a sort of level of certification that costs money and other things. So, you have the assurance that things are naturally grown and chemicals are not used.

How is Fair Trade regulated?

Fair Trade is regulated by third party organizations that form as their own non profit group that are the certifiers of Fair Trade goods. Those groups are responsible for watching over Fair Trade organizations, making sure that they're keeping with the principles and the mission of Fair Trade. They are also responsible for maintaining oversight of products through the producer to consumer chain. It is actually these outside third party organizations that certify products and organizations that regulate and ensure that the Fair Trade claim is legitimate.

Do governments support Fair Trade?

On the whole, governments have not necessarily gotten as behind fair trade as they could. One of the exciting developments in fair trade in Europe, and now increasingly in the U.S, is the idea of fair trade towns. It is local government who are getting behind fair trade, who commit to certain standards of support for fair trade, like serving fair trade coffee and fair trade goods in their snack room or at committee meetings, and by forming a kind of steering committee to ensure that the town is remaining committed to fair trade, and hosting educational events about fair trade. There is this distinction that is being given out now by TransFair; there are two fair trade towns now, one of them is in Pennsylvania, the other one is in Vermont; it shows the local amount of support. In some ways fair trade isn't about waiting for policy to change on a national level; it's about both the individual and then beyond that the local community making a difference by changing its purchasing decisions. It is exciting to see that. While national governments may not be the quickest in getting on board with fair trade, there are these local municipal governments that are supporting fair trade and even becoming fair trade towns.