FAIR TRADE FAQs

This in-depth section covers fair trade.

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FAIR TRADE

What is fair trade?

Fair trade seeks to transform the lives of poor producers in the developing world by enabling them to use their skills and resources to trade their way out of poverty. It seeks to challenge injustices in trading structures and practices that so often lead to the exploitation and marginalization of poor people.

Fair Trade is essentially the exchange of goods based on principals of economic and social justice. It goes without saying that Aid and Development work are totally crucial and much needed approaches – but what gets us most excited about Fair Trade is that it is a sustainable and systemic approach that gives people independence and dignity.  It’s not charity, nor pity, but it’s a sustainable way to break cycles of poverty and dependency.

Give a man a fish and you’ll feed him for a day (Aid)
Teach a man to fish and he’ll feed himself (Development)
Buy his fish and he has a sustainable way out of poverty (Fair Trade)

Fair Trade companies operate according to stipulated Fair Trade principles, specifically targeting those people who are traditionally bypassed by the benefits of commerce. It specifically strives to lift people out of poverty, and empowers whole communities.  Buying Fair Trade means that we obtain products with a clear conscience (actually it’s more of a feel good factor- because the effect is way above being merely neutral), and we can buy with confidence knowing that the products have been produced in ways that treat both people and planet fairly.

Whats wrong with the way things are now? Why do we need fair trade?

Today, more than 1 billion people live on less than $1 a day and lack access to clean water, health care, education and other basic social services (source: UN Development Group 2008).  The gap between rich and poor is widening, with the world’s richest 20% consuming over 75% of the world’s resources while the world’s poorest 20% only consume 1/5% (source: World Bank 2008).

We all know, when we stop to think, that there is much that needs to be done to improve the quality of life, and opportunities for justice, open to huge numbers of people around the world.  Today, as throughout history, societies that thrive from commerce exploit vulnerable people in far off and unseen places.  While some regions, particularly in Asia have experienced robust economic growth, widespread poverty has languished in much of Asia, Latin America and sub-Saharan Africa, where AIDS, violence, corrupt governments and lack of infrastructure compound the misery.  In Latin America one third of the population lives below a subsistence level.

While global trade has improved the conditions for some marginalized people, many critics suggest that conventional commerce gives too much power to multinational corporations and rich countries, and too little power to less industrialized countries and producers working there.  Conventional trade often minimizes opportunities for vulnerable producers and sometimes degrades the environment.  Powerful governments frequently employ subsidies, tariffs, and lax labor and environmental standards to enable politically influential groups to focus on short term profits, evade the full costs of commerce and separate themselves from the plight of marginalized people.

When we buy something cheaply we have to ask ourselves who paid the true price of that product- because someone somewhere paid.  We recommend watching a lively and fascinating short video looking at these issues called The Story of Stuff.

With the proliferation of inexpensive products around the globe, there has been a rise of conscious consumers calling into question the costs of our over-consumptive lifestyles.  Fair Trade is a means of ensuring fairness and greater parity in the supply chain, and in the treatment of producers and planet.  Fair Trade is a response to concerns about business practices, labor conditions, environmental issues and cultural changes that perpetuate the vulnerability of low-income people.  Fair Trade is a way for consumers to apply their buying power to challenge the current system and demand supply-chain accountability.  Consumers are seeking alternatives that offer secure and rewarding lives for less fortunate people.  The great thing about Fair Trade is that everyone can get involved- it is not a response that requires you to have either excess time to volunteer nor money to donate- it simply uses the money you were going to spend anyway on the things you need to give a hand up rather than a hand out to those who need just that.

(with credit to the Fair Trade Resource Network for some of the above material)

What are the principles of fair trade?

Fair trade is not about charity or pity. It is a holistic approach to trade and development that aims to alter the ways in which commerce is conducted, so that trade can empower the poorest of the poor. Fair Trade Organizations seek to create sustainable and positive change in developing and developed countries by adhering to the following principles:

  • Creating Opportunities for Economically and Socially Marginalized Producers
  • Developing Transparent and Accountable Relationships
  • Building Capacity
  • Promoting Fair Trade
  • Paying Promptly and Fairly
  • Supporting Safe and Empowering Working Conditions
  • Ensuring the Rights of Children
  • Cultivating Environmental Stewardship
  • Respecting Cultural Identity

Visit the Fair Trade Federation site (http://www.fairtradefederation.org) for more information on each of the principles shown above.

How do the producers benefit from being in a fair trade relationship?

Paying fair wages in each local context is obviously an important issue, but actually Fair Trade provides many benefits that move beyond just fair wages.  For example:

Long term relationships. This is a very big piece for artisans: continuous work. Artisans need consistent employment as customers see that they can make fair trade purchases part of their normal spending habits.  Sadly, some of our producers have to lay people off after the peak of holiday orders subsides.  Sometimes, producers would rather earn lower wages but earn on a regular basis, than to higher but irregular and unreliable wages. Our producer groups, and the ordering pattern of Trade as One, attempts to provide steady, sustained work through the year. Fair Trade requires a lot of planning and understanding of the challenges facing poor producer groups, and a willingness to work with them to establish supply chains and to seek to understand and embrace their challenges.

Design & quality. Many artisans group cannot succeed until their quality and designs are up to market standards.  Conventional traders do not provide that support to artisan groups that would benefit from this.  It becomes a catch 22 situation.  Fair Trade organizations specifically, and often courageously, choose to work with small and sometimes struggling artisans groups that need this level of support.  In this way they receive input and assistance through the product development phase, and are brought to a consistent level of quality. Once producers reach this stage, they are able to compete in conventional markets by themselves. Their capacity is increased, as is their understanding of demand, quality and design requirements.

Loans & advance payments. We provide advance working capital to sustain producers through the production process. All producers who need it are paid 50% of the order cost upfront.  They may additionally have access to grants/loans for tools etc. Conventional traders do not pay advances and even hold off on payment long after delivery which makes sustainable development of these small businesses impossible. Fair Trade relationships also work with producers to assist with costing analyses and the sharing of financial acumen. Fair Trade premiums and grants are invested in local communities to result in the long term development of these communities (for example in facilities, health & education).

Respect. We treat producers as fellow human beings. This makes a big difference in their lives. They love that we love their products- and that they are treated well for their hard work and talent. Dignity is sometimes the biggest wealth that many marginalized producers possess. Conventional trade sometimes misses or undermines this core human value.

How do consumers benefit from fair trade?

Once people become aware of the enormous challenges that we face in the world, they are often overwhelmed with what to do. It’s good to be upset, but it’s better to be inspired. Change is possible. But only when people of conviction take action. Trade as One is all about action.

Fair Trade customers benefit from being able to buy quality products for everyday use, as well as gift purchases, knowing that others have not been exploited through the production process.  We all have to shop for our everyday needs and Fair Trade enables us to shop with a clear conscience knowing that others are actually benefitting from these purchases- rather than the reverse which is so often the case.  Fair Trade means that our spending, as well as our giving, becomes a powerful force for good.  The range of available products for everyday living and consumption, as well as for occasional gift-giving opportunities, is increasing all the time.

By buying Fair Trade products consumers also send powerful signals to businesses and governments about their concern for justice and ethics in trade. This consumer pressure encourages other organizations to develop Fair Trade ranges and challenges businesses to improve their wider impacts on society.

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