5 Best Practices to Promote Fair Trade

Even though fair trade products do not make up a huge part of the overall global market, the sector keeps growing by day. It is in fact estimated that up to a quarter of the world’s population can be able to benefit from it.

Fair trade is a system of trade specifically designed to create opportunities for producers disadvantaged by the traditional economic model. It does so by providing low-income countries’ producers with export opportunities for a livable wage as well as fair labor and production practices. However, fair trade must be promoted to observe enough growth in low-income countries.

Fair trade goals

  • Improve the well-being and livelihood of disadvantaged producers
  • Promote development opportunities for these producers
  • Raise awareness among consumers of the negative effects of international trade on local producers
  • Lead the way in partnership-in-trade through transparency, respect, and dialogue
  • Campaign for change in conventional international trade rules and practices
  • Protect human rights through social justice, good environmental practices, and economic security

Ways to promote fair trade

A variety of efforts can be undertaken to promote fair trade either by you, governments, or other third parties like donors. Either way, these efforts should be able to meet the above goals as well as improve trade volumes and stimulate the economy. Here is how to promote:

  1. Creating fair trade towns

The more people embrace and utilize fair trade, the more producers in developing countries can improve lives and work their way out of poverty. The Fairtrade Foundation can help groups, communities, and populated areas become fair trade certified.

By creating fair trade towns, you not only build stronger links in the community but also encourage individuals, businesses, and organizations to follow suit. For the town as well as individual businesses and organizations, fair trade is one way to show ethical and environmental concerns.

  1. Working with schools

Trade is in the curriculum of many schools across the entire world. It is linked with a number of subjects like Business Studies, Geography etc. You can make it possible for school children to promote fair trade by helping them relate what they learn in the classroom to outside activities like enterprising.

You can create groups to facilitate fair trade learning programs and even get funding from governments or well-wishers. If students learn that fair trade can help alleviate poverty, they will be more than willing to try it out in the future.

  1. Encouraging direct distribution

In order to protect small producers from being monopolized by large companies, it is crucial to give them the ability to maintain their independence as well as negotiate the sale of their products. The best way to do this is to cut out “middlemen.”

Direct distribution between the producers and their respective distributors/sellers will reduce the distribution chain costs. This, in turn, increases profitability and in essence makes small producers their own bosses. When you encourage direct distribution practices, you will essentially have achieved goal number one of fair trade.

  1. Offer incentives to local businesses

This is especially for governments to carry out. Governments can offer tax holidays or other incentives to retail and distribution businesses so as to boost local manufacturers and producers. These incentives can be put in such a way that they make business easier for both the manufacturers and distributors while at the same time boost the economy through production. You can petition governments and other relevant bodies to bring about reasonable incentives.

  1. Raise awareness

The Internet is an efficient way to raise awareness, it has proven capabilities in getting messages to a large number of people. Therefore, the Internet is a good place to promote fair trade. On the Internet, SEO agency can provide assistance to promote fair trade via marketing fair trade websites which are developed in such a way to allow open forum discussions with a large number of people and also provide facts and information about fair trade.

 

Conclusion

For a community to be deemed sustainable, it must consider the effects its actions have on those it connects to through trade. It is good to acknowledge the rights of others and to understand that for you to be sustainable, these rights must not be exploited. If you support fair trade, you are creating a sustainable global community.

How Fair Trade Can Help Tackle Poverty and Bring Peace to Conflict Zones

Civil wars are more likely to occur in poor countries than in rich ones. While there may be some relationship between certain kinds of violence and poverty, not all poor states are volatile. Some rich states too can experience violence. “Extreme poverty is a huge problem in developing countries with 1.2 billion people surviving on less than a dollar a day. A further 1.6 billion, more than a quarter of the world’s population, make do with one to two dollars a day.” This is according to a study titled “Trade, Income Disparity and Poverty”, by the World Trade Organization (WTO).

Trade can play an important part in reducing poverty because it aids economic growth and the poor tend to gain from fast progressing kind of growth. According to the European Commission, fair trade can help tackle poverty and bring peace to conflict zones by:

 

Trade creates employment opportunities

Free trade boosts economic sectors thereby creating stability, more jobs, and usually higher incomes. Higher incomes directly translate to improved livelihoods. As developed countries move their operations into developing countries, new opportunities arise for local workers. An increase in employment levels and general standard of living reduces hunger as well as boosts food production. Lack of increasing dependency for medical care in developing countries can be attributed to better living standards where there is free trade.  More income increases the levels of literacy as education is now affordable. The overall result increases in life expectancy and reduction in infant mortality rates.

Fair trade focuses on commerce among individuals and businesses. As both need each other to survive, growth means more employment for individuals boosted by fair trade regulations that ensure minimum wages as well as better working conditions. Occupied people are less likely to have time for conflict or other activity likely to affect their jobs. Fair trade, therefore, brings peace in this way because we know an idle mind is the devil’s workshop.

Trade strengthens ties between nations

By bringing people together in peaceful and mutually beneficial trade pacts and policies, free trade contributes to peace and stability. Cultural exchanges and assimilation often lead to dilution of bad war habits and tendencies as well other negative behavior. Fair trade supply chains utilize direct partnerships that take into account the needs of individual communities. When communities feel considered, peace prevails because of lack of marginalization. Cross border supply chains strengthen ties between two or more nations.

Trade can help increase development and reduce poverty by initiating growth through increased commercial opportunities and investment

With new capital entering a developing country, a growing productivity cycle that stimulates the entire economy is initiated. Foreign capital inflows excite the banks and other lenders, leading to more investment and increased lending. Lending sparks a country’s economy which in turn helps develop locally owned businesses. Furthermore, free trade allows a reciprocate relationship where foreign-owned companies establish themselves in developing countries and native companies sell to their foreign markets. This is particularly true for small businesses in developing countries that no longer have to worry about absorbing entry tariffs and other red tapes to enter foreign markets and can sell their products freely.

Fair trade lets businesses work in partnership with artisans and farmers and other marginalized sectors by offering favorable financing. Access to favorable financing means more investment through loans and as a result more commercial opportunity.

Affordable prices and availability of products.

Freeing up trade helps the poor as well as the other people in a similar way, by lowering prices of imports and maintaining prices of substitute imported goods at a low. This action increases people’s real incomes. Basic foods, pharmaceuticals, and other medical or basic health products, as well as used clothing, are imports that are especially important for the poor. An example of trade liberalization that benefited the poor directly was in April of 2000 at the African Summit on Roll Back Malaria. During the summit, Africa’s heads of states committed themselves to reduce & waive taxes and tariffs for goods needed to control malaria. Such as insecticides, nets, and anti-malarial drugs.

Fair trade’s main goal is to empower marginalized people and improve their lives quality. By bringing about a living wage to them, they can afford more products than before. When more people can acquire a product, it is deemed affordable and in extension available. Hunger and poverty are known to bring conflict. When people can afford to live, conflict is not the foremost on their minds.

Conclusion

In most cases, trade liberalization increases the income of the poor creating harmony in the process. Compared to the overall benefits, transition costs are small. However, there are cases where the short-term effects of free trade on the poor and others have been both negative and significant.

In Zambia for example, liberalization of the maize market achieved the opposite of desired results. Before, maize producers had a considerably low cost of inputs due to cross-subsidies financed by the country’s mining sector. In addition, parastatal subsidized prices for small producers in remote areas and served as monopsony buyer. This was applied without discrimination throughout the seasons in the entire country. Later on, subsidies were removed and the parastatal was privatized. Large farmers, due to their economies of scale and closeness to national markets, experienced little change but severe price fluctuations hit poor farmers in rural areas hard. To make matters worse, due to deterioration in transportation infrastructure, remote rural corn markets were completely wiped off. This left the poor farmers without any formal income, in direct contradiction to what had been expected of the move.

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