What is Fair Trade?

Fair Trade means getting paid a fair wage -

It is as simple as this: the person who made the item got paid a fair price for making it.

But what is so special about that, you might think? What is special is that in many developing countries, getting paid fairly for the work one does is not the norm. In fact, getting paid enough to live on is often not the case.

Probably you have heard something about the inequalities between the economies of the highly developed "first world" countries and the developing countries of the southern hemisphere and elsewhere. These inequalities cause hardship and poverty for many.

Being exploited as cheap labor in sweatshops, factories, and plantations is a common condition for people in the "third world". The payment that workers receive under these conditions is often inadequate for survival.

Fair Trade is an alternative to exploitation -

What is fair? Fair is getting paid at least the minimum wage of a country. However, because the minimum wage in many countries is often not enough for basic survival, workers really need a living wage, which enables them to cover basic needs, including food, shelter, education and health care for their families.

Paying fair wages to workers who have not received them before does not necessarily mean higher costs to consumers. Fair Trade organizations bypass exploitative middle-people and work directly with the producers, so they are able to cut costs while at the same time returning a greater percentage of the retail price to those producers.

Fair Trade arrangements take many forms depending on how they are started, what the circumstances of the producers are, and what the products are.

A Fair Trade Illustration -

Diane, from the U.S. for example, travels in South America and "discovers" a village in Guatemala that produces beautiful weaving. The people of the village are poor and have little outlet to sell their crafts. Because of the encroachment of modernization they need more money than was ever needed in their traditional culture.

Diane realizes that their weavings are not available in the U.S. and there could be a market for them. She buys a large quantity of weavings from a number of women of the village and when she gets home sets up a small mail order business with the help of a few friends, to sell the weavings. Soon, after making the right contacts, Diane is able to sell all the pieces.

Now she goes back to the village and decides to make a Fair Trade arrangement with the women of the village. She agrees with them to fair prices for their products, and tries to establish some regularity to their production and her buying schedule so she can depend on them to produce enough items to cover her orders, and they can depend on her to buy the items they make.

Removing the "middle-man" -

Because there is no "middle-man" Diane can pay the women more for each item and still sell them at a competitive price in the U.S.

If this arrangement works out over time, Diane and the women of the village form a long-term relationship that benefits everyone involved. A new influx of income to the village allows the people there to make needed improvements to their lives.

Social benefits for the whole community -

Some of the first Fair Trade arrangements were started by church related organizations in their efforts, for example, to provide help to the members of a poor village.

Rather than rely on donations to help improve schools or sanitation, or water systems, Fair Trade arrangements were made to buy and sell the traditional crafts of the village. With the success of the sales of the craft items, the charity organizations were able to contribute even more to supporting the development of social services to that community.

Schools, medical clinics, and town halls for the community often became realities that could not have been possible otherwise. This is how Fair Trade not only gives better wages to workers but also improves whole communities.

Our Fair Trade retail -

A person like Diane or a Fair Trade charity organization may sell the Fair Trade products they import as retail items through their own store, and they may also sell wholesale to other retailers.

EarthTrend Shop buys Fair Trade items from distributors like Diane and Fair Trade organizations, and we only label an item to be Fair Trade if we have gotten it from such a distributor.

Fair Trade Criteria -

The Fair Trade Federation has listed a number of criteria a product should meet to be honestly considered Fair Trade -

• Paying a fair wage in the local context.

• Offering employees opportunities for advancement.

• Providing equal employment opportunities for all people, particularly the most disadvantaged.

• Engaging in environmentally sustainable practices.

• Being open to public accountability.

• Building long-term trade relationships.

• Providing healthy and safe working conditions within the local context.

• Providing financial and technical assistance to producers whenever possible.

Help yourself and others -

Buying Fair Trade products is an enjoyable way that you can brighten up your life and home with unusual quality crafts from around the world, and help improve the lives of others, at the same time.

To read more about Fair Trade get The Conscious Consumer in our Books section.

For more Fair Trade information see our links page.