What is fair trade?

The term fair trade describes a partnership between producers and traders. They make decisions together about product design and come to agreements on prices and delivery dates. In order to redress an economic imbalance, which is unfairly weighted against the producer, the buyer will often pay 50% of the final price on placing the order. The price paid sometimes includes a premium to be used to benefit the whole community in consultation with workers or producers.

If a producer cannot meet the agreed delivery date (which often happens in countries where the natural conditions and political unrest affect output), the fair trader remains loyal to the producer. This commitment is vital to artisans for whom mass production is impossible.

The Fairtrade Mark is an independent guarantee that a product has been fairly traded. It is most often seen on foods but has also been awarded to footballs, flowers and cotton.

 

World Fair Trade Organisation 10 Principles of Fair Trade

1. Creating Opportunities for Economically Disadvantaged Producers

Poverty reduction through trade forms a key part of the organisation’s aims.

2. Transparency and Accountability

The organisation is transparent in its management and commercial relations. It is accountable to all its stakeholders and respects the sensitivity and confidentiality of commercial information supplied.

3. Fair Trading Practices

The organisation trades with concern for the social, economic and environmental well-being of marginalised small producers and does not maximise profit at their expense.

4. Payment of a Fair Price

A fair price is one that has been mutually agreed by all through dialogue and participation, which provides fair pay to the producers and can also be sustained by the market.

5. Ensuring no Child Labour and Forced Labour

The organisation adheres to the UN Convention on the Rights of the Child, and national / local law on the employment of children.

6. Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association

The organisation does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/Aids status or age.

7. Ensuring Good Working Conditions

The organisation provides a safe and healthy working environment for employees and / or members.

8. Providing Capacity Building

The organisation seeks to increase positive developmental impacts for small, marginalised producers through Fair Trade.

9. Promoting Fair Trade

The organisation raises awareness of the aim of Fair Trade and of the need for greater justice in world trade through Fair Trade.

10. Respect for the Environment

Organisations which produce Fair Trade products maximise the use of raw materials from sustainably managed sources in their ranges, buying locally when possible.

Thank you to Lanka Kade for this concise outline of the principles!

You can find loads more information on the Fairtrade Foundation’s website which is a great source of support and resources for those who want to find out more about fair trade. We’d strongly encourage you to take a look!