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What is fair trade? by julia duong | design by karin yuen
No longer considered an underground trend, today the label “fair trade” is ubiquitous in nearly every coffee shop, restaurant, and grocery store. The reputation that the shiny label “fair trade” carries on products such as cotton, coffee, and produce seems honorable in principle. Here we break down what fair trade really means. Fair trade goods are defined as products that come from farmers and workers who have been justly compensated and treated fairly. The purpose of fair trade is to promote social justice by combating poverty for producers from developing countries or small scale farmers, allowing them a more equal status in the world market and better control over their lives. The chocolate industry, for example, has been accused of using child labor on its cocoa farms and plantations. By buying certified fair trade products, a consumer is not only socially aware and environmentally responsible regarding the origins of his or her product, but is also playing an indirect role in the worker or farmer’s life. The process of certification is, in principle, simple. Fair Trade USA is a nonprofit organization that works with US companies and international suppliers, and is dedicated to auditing and certifying products that comply with the following international fair trade standards:
> Fair prices
Farmers who produce fair trade products are paid a fair price for their labor. This price usually covers the costs of sustainable production, serving as a “safety net” for farmers if the market prices ever fall due to harsh farming conditions or an underproduction of goods. These farmers are given an active role in selling their goods: they can negotiate prices based on factors such as quality and whether or not the goods are organic. In Guatemala, for example, farmers are paid $1.55 per pound for organic coffee, almost ten percent more than the market price.
> Premiums
> Workers Rights
Fair Trade USA attempts to empower marginalized farmers and workers and give stability to their working lives. Workers must be granted basic rights such as health and safety standards, freedom of speech, and protection from illegal child labor.
Concerns about the reality of fair trade have blossomed along with the increase of products. According to the Inter Press Service News Agency, fair trade statistics do not account for differences by region or by countries’ income category. Thus, it is difficult to see the extent to which fair trade truly benefits developing countries. Likewise, a private industry survey conducted in 2008 and published in Time Magazine showed that more than half of farmers’ families were still going hungry for several months a year, despite being paid fair trade prices. Despite these raised concerns, the concept of fair trade deserves merit, and the industry has certainly proliferated in the past decade. In an ideal situation, fair trade products can give consumers the satisfaction of knowing that workers were treated fairly. The availability and variety of these goods will surely continue to grow. t w
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total wellness ▪ winter 2012
Farming organizations are also paid a premium, which is used for farming improvements such as replacing machinery, creating education and public health projects, and investing in facilities. How this premium is used is decided by elected members of the organizations, usually worker representatives whose goal is to improve the social and economic benefits of the workers. For example, in 2010, banana growers in co-operatives were paid a premium of $23.4 million dollars, which was used to invest in healthcare, education facilities, and training.
Fair trade certification has only been around for a little over a decade, yet there has been a great proliferation of products. Over 10,000 products on U.S. store shelves are fair trade, and in the second quarter of 2011, sales of Fair Trade certified products skyrocketed by 63%. According to Paul Rice, the CEO of Fair Trade USA, fair trade has become more popular in the past few years due to greater consumer concern about social and environmental issues. From a corporate perspective, fair trade has also been more mainstream due to the serious ramifications a company can face if accused of relying on child labor or giving low wages to farmers from third world countries.