Money Advice

What Is Fair Trade and What Does It Mean? – Definition, Products & Facts

Take a stroll down the espresso aisle of any massive grocery store, and there’s a very good likelihood you’ll see no less than one or two baggage of beans sporting slightly label that claims “Fair Trade.” These baggage don’t look clearly totally different from the others on the shelf, however their value is unquestionably on the excessive finish – no less than $7 per pound, and as excessive as $15 per pound. What, you may marvel, makes them price that additional money?

The answer is that while you pay additional for Fair Trade espresso, the money goes on to the farmers who develop it. Fair Trade espresso sellers assure the growers a good wage for his or her merchandise, and in return, the farmers promise to offer respectable circumstances for his or her employees and to develop their espresso in an eco-friendly means. The identical ensures apply to different merchandise bearing the Fair Trade label, akin to chocolate, sugar, bananas, and cotton.

Fair Trade merchandise are a scorching commodity. The British newspaper The Guardian stories that world gross sales of Fair Trade merchandise rose by 15% in 2013, reaching a complete of £4.4 billion ($6.55 billion). Worldwide, the Fair Trade motion that year supported greater than 1.4 million farmers and employees in 74 international locations.

Principles of Fair Trade

The objective of Fair Trade is to scale back poverty for farmers and employees in creating international locations. This means not simply paying them extra within the quick time period, but additionally serving to them enhance their expertise, build up their communities, and shield the native setting so its resources can be there for future generations.

Organizations concerned in Fair Trade, together with Fair Trade USA and the Fair Trade Federation, have outlined a number of fundamental rules for each patrons and sellers to observe:

1. Direct Trade
Fair Trade importers work with producers as straight as doable. Cutting out the intermediary permits the importers to pay the farmers a bigger share of the money their merchandise will finally fetch on retailer cabinets. Fair Trade importers typically cope with collectives – teams of small-scale growers who run their very own farms with little or no employed labor. To meet Fair Trade requirements, the collectives should be democratically run, with every farmer getting a vote, and should cut up their income equally amongst all of the members.

2. Fair Price
Fair Trade ensures farmers an inexpensive minimal value for his or her crops, regardless of how low the market value falls. Buyers promise to pay producers promptly for his or her items, and producers promise in flip to pay a good wage to all their employees. Buyers additionally lengthen credit score to their producers – for example, paying them upfront of the harvest – to verify the producers have all of the resources they should flip over their items on time.

3. Decent Conditions
Fair Trade requires that farmers present secure and wholesome circumstances for his or her employees. It additionally bans all use of kid labor and pressured labor, that are widespread in lots of elements of the world – notably on cocoa plantations, as CNN reported in 2012. Fair Trade guidelines ban all types of employee abuse, harassment, and discrimination, together with discrimination primarily based on political affiliation or union membership.

4. Respectful Relationships
Fair Trade promotes open, sincere communication amongst producers, patrons, and shoppers. Fair Trade sellers do their finest to provide growers the knowledge they want about market circumstances, share what they learn about the very best rising practices, and present technical help when wanted. Importers search to build long-term relationships with growers and work with them to resolve any issues that come up.

5. Community Development
On high of the common value for his or her items, growers earn a Fair Trade Premium to spend money on their communities. For espresso, for example, they receives a commission an additional $0.20 per pound, plus an additional $0.30 if it’s grown organically. These funds go towards initiatives like constructing new faculties, offering scholarships, enhancing diet and healthcare, and digging wells. Farmers may make investments the money into their companies, spending it on irrigation for fields or on natural certification, which may allow them to earn larger costs for his or her crops sooner or later.

6. Environmental Sustainability
Although not all Fair Trade merchandise are natural, farmers are required to make use of sustainable rising practices that shield pure resources, together with water, soil, and pure vegetation. The use of pesticides and fertilizers – notably essentially the most dangerous ones – is restricted. Farmers additionally pledge to make use of power effectively and handle waste correctly, decreasing, reusing, and recycling every time doable. The use of genetically modified organisms (GMOs) is particularly banned for all Fair Trade merchandise.

7. Respect for Local Culture
Fair Trade sellers promise to respect the cultural heritage of the growers they work with. Instead of forcing them to undertake the most recent, most effective strategies for rising or producing items, they permit them to observe their conventional practices, whereas additionally instructing them about new strategies. In this manner, growers can hold their traditions alive whereas nonetheless growing their manufacturing to maintain up with the market’s calls for.

Fair Trade Certification

Fair Trade certification is a means of guaranteeing that each patrons and sellers persist with the rules of Fair Trade. There are a number of totally different organizations that certify Fair Trade merchandise, every with its personal label and its personal set of requirements. To bear the Fair Trade label, a product should meet all of the requirements of the certifying group, which inspects farms repeatedly to verify they’re following the principles.

fair trade certified bananas

Fair Trade Labels

There are a number of totally different Fair Trade labels you may spot as you cruise the grocery store aisles. They embrace:

fair trade markThe FAIRTRADE Mark
The largest worldwide Fair Trade group is Fairtrade International. It works with greater than 1,200 totally different producers in 74 international locations, which make use of greater than 1.5 million farmers and employees. Fairtrade International employs a company known as FLOCERT to certify all its members and implement its requirements. Its label, often known as the FAIRTRADE Mark, seems on over 27,000 merchandise worldwide, together with meals, drinks, cotton, clothes, and jewellery.

fair trade certifiedFair Trade Certified
The Fair Trade Certified label represents Fair Trade USA, the main certifier of Fair Trade merchandise within the United States. This group, previously recognized as Transfair USA, was as soon as part of Fairtrade International, but it surely cut up off in 2011, adopting a brand new title and its personal set of requirements. For occasion, Fairtrade International requires all its espresso to come back from collectives of small farmers, whereas Fair Trade USA additionally accepts espresso from massive plantations run by a single company. Fair Trade USA certifies all kinds of merchandise, together with espresso and tea, contemporary fruits and greens, spices, wine, and clothes. Inspections for these items are carried out by a third-party certifier known as SCS Global Services.

fair for lifeFair for Life
Most Fair Trade applications apply to particular merchandise and aren’t involved with anything the company produces (corporations could produce a number of merchandise – some Fair Trade, some not). Fair for Life, against this, solely works with corporations that present truthful wages and working circumstances for all their workers, in addition to their suppliers  – not simply the producers of sure particular merchandise. The Fair for Life label can be used for practically any kind of products – meals or non-food, uncooked materials or completed product – and sure forms of providers as effectively. Currently, there are about 500 totally different merchandise licensed as Fair for Life, all made by corporations that meet the Fair for Life requirements. The certification course of is run by the Institute for Marketecology.

fair trade federationFair Trade Federation Member
The Fair Trade Federation (FTF) isn’t a certification program; reasonably, it’s a membership group for U.S. and Canadian corporations that observe Fair Trade rules. Individual corporations pay dues to the Federation and get the precise to show its label, exhibiting that they’re dedicated to the rules of Fair Trade. Companies don’t have to have Fair Trade certification to hitch the FTF, which suggests they don’t have to pay the charges each FLOCERT and Fair Trade USA cost for his or her applications. However, they should present that they meet the group’s strict code of apply for all their merchandise – a strict commonplace that solely 50% to 60% of all the businesses that apply are in a position to meet.

world fair trade organizationWorld Fair Trade Organization
The World Fair Trade Organization (WFTO) is a worldwide community of smaller Fair Trade organizations, in addition to particular person corporations. The WFTO has a five-stage assure system to observe all its members and ensure they conform to the rules of Fair Trade and to the group’s personal Fair Trade commonplace. Run from a central office within the Netherlands, the WFTO represents over 370 member organizations and 40 particular person associates, spanning 70 international locations and 5 continents.

utz certifiedUTZ Certified
The UTZ Certified program isn’t a Fair Trade certifier, but it surely stands for a lot of of identical rules: sustainable farming, secure working circumstances, and higher alternatives for farmers and their households. Unlike Fair Trade, UTZ doesn’t assure farmers a baseline value for his or her crops, but it surely does pay them a premium over the market rate, in addition to serving to them enhance high quality and yield so their crops are price extra. UTZ displays the farms it really works with to verify they observe its codes of conduct, which cover farming strategies, working circumstances, and the setting. UTZ is the biggest program for sustainably grown espresso and cocoa on this planet, accounting for practically 50% of all sustainably labeled espresso – its purchasers embrace such main corporations as Mars, Nestlé, and IKEA.

Differing Standards: Fairtrade International vs. Fair Trade USA

Fair Trade USA triggered a serious controversy when it broke away from Fairtrade International in 2011. The essential purpose for the cut up was that the 2 applications didn’t agree on what their requirements needs to be for espresso growers. Fairtrade International requires all its espresso to be grown on democratically run, farmer-controlled collectives. Fair Trade USA, against this, hoped to broaden Fair Trade by making certification accessible to espresso produced on massive plantations, which are sometimes run by a single massive company, and by unbiased small farmers who don’t belong to a collective.

Paul Rice, the CEO of Fair Trade USA, claimed this transfer was the easiest way to assist the world’s poorest farmers, who weren’t actually benefiting from the prevailing Fair Trade guidelines. In a 2012 interview with Just Means, Rice identified that small-scale farmers normally don’t have sufficient land to help their total households, so many members find yourself engaged on the massive espresso plantations. Extending Fair Trade to the massive plantations, he argued, is the easiest way to verify these employees get the identical truthful wages and respectable circumstances as those that work for the collectives.

Many supporters of Fair Trade, together with the teams Equal Exchange and the Fair World Project, argued that Rice’s determination would weaken Fair Trade requirements. They claimed that the one significant means to enhance the lives of espresso growers was to give attention to “disenfranchised” small farmers reasonably than increasing to bigger plantations. However, analysis completed by The Guardian tells a special story. Between 2009 and 2013, researchers discovered that in elements of Africa the place Fairtrade International cooperatives dominated the espresso commerce, employees really earned much less and had worse working circumstances than those that labored on bigger plantations – and the group initiatives funded by Fair Trade premiums, akin to faculties and well being clinics, had been typically unavailable to them.

The backside line is, whereas the 2 teams have totally different approaches, there isn’t sufficient proof to say that Fairtrade International’s requirements are inherently higher or stronger than Fair Trade USA’s. For those that care concerning the rules of Fair Trade, merchandise with the Fair Trade USA label are a wonderfully affordable selection.

Fair Trade Products

There are many various sorts of merchandise that bear the assorted Fair Trade labels. Most of them are agricultural items, akin to espresso, tea, chocolate, herbs and spices, sugar, flowers, and produce, akin to bananas and mangoes. However, each Fair Trade USA and Fairtrade International certify some manufactured merchandise as effectively, together with clothes, wine, and sports activities balls. Here’s a more in-depth take a look at a number of the most typical Fair Trade Products (and the place they’re bought) that will help you kind extra socially accountable consuming and ingesting habits.

fair trade coffee


The Fair Trade motion first began with espresso, and espresso stays an important Fair Trade product at present. A 2012 report from Fairtrade International says it bought 88,000 tons of Fair Trade espresso worldwide in 2010 – about 1% of the world’s total espresso crop. The United States and Canada account for a big share of those gross sales – based on Fair Trade USA, these international locations imported 163 million kilos (81,500 tons) of Fair Trade espresso in 2012.

Major sellers of Fair Trade espresso embrace:

  • Green Mountain Coffee is a Vermont-based roaster owned by Keurig.
  • Allegro Coffee is a Colorado roaster and coffeehouse that sells its coffees on-line.
  • Equal Exchange is a employee cooperative that has dealt in Fair Trade espresso since 1991.
  • Starbucks sells some Fair Trade coffees in its shops, together with different “ethically sourced” beans.
  • Dunkin’ Donuts makes use of Fair Trade Certified espresso beans in all its espresso drinks.


Most of the world’s cocoa comes from African international locations, notably Côte d’Ivoire (Ivory Coast), the place little one labor and slave labor are widespread. By shopping for Fair Trade cocoa and chocolate, conscientious shoppers might be positive their money doesn’t help these abuses of human rights.

Fair Trade cocoa comes from many international locations, together with Bolivia, Cote d’Ivoire, Ghana, Haiti, Honduras, India, Nicaragua, Peru, and Sri Lanka. It’s utilized in a wide range of merchandise, each natural and typical, together with chocolate bars, scorching chocolate combine, and ice cream.

Companies that use some or all Fair Trade cocoa of their merchandise embrace:

  • Ben & Jerry’s makes use of Fair Trade elements in all its ice cream flavors.
  • Cadbury makes use of Faitrade International cocoa in its Dairy Milk Chocolate merchandise.
  • Chocolove is a chocolate company that sources all its chocolate sustainably and makes three bars which can be each Fair Trade and natural.
  • Divine Chocolate is co-owned by Kuapa Kokoo, a Fairtrade International collective of cocoa farmers.
  • Endangered Species Chocolate is the primary company to provide chocolate within the United States from Fair Trade cocoa.
  • Green & Black’s is a 100% natural chocolate company that produced the primary Fairtrade International licensed chocolate bar in Britain.
  • Theo Chocolate is a Fair for Life company that produces natural, Fair Trade chocolate in its Seattle manufacturing facility.

Clothing and Textiles

Clothing is without doubt one of the latest Fair Trade merchandise, but it surely’s rising rapidly. A 2015 article in MarketWatch stories that the quantity of Fair Trade attire and residence items on the market grew to virtually 5 occasions its former dimension throughout 2014. Factories that make Fair Trade clothes should meet requirements for environmental well being, wages, working circumstances, and employees’ rights.

You can discover Fair Trade clothes and residence merchandise at many various retailers. Some of them deal completely in Fair Trade clothes and residence merchandise, whereas others promote just some particular merchandise that carry the Fair Trade label.

Sellers of Fair Trade clothes and textiles embrace:

  • BeGood Clothing is an internet retailer primarily based in San Francisco that sells casual clothes for males and ladies.
  • Fair Indigo is an internet retailer that sells natural, Fair Trade, and regionally sourced ladies’s clothes and equipment.
  • Good & Fair Clothing Co. is an internet vendor of natural tees and underwear which can be “certified Fair Trade from farm to factory.”
  • Maggie’s Organics buys natural cotton and wool straight from the growers to be processed into knitwear in its North Carolina warehouse.
  • Patagonia is a serious vendor of out of doors sports activities gear that gives an assortment of Fair Trade activewear and outerwear for males and ladies.
  • prAna is a yoga company that was the primary main attire company in North American to be licensed by Fair Trade USA.
  • West Elm is the primary retailer on this planet to supply Fair Trade Certified rugs.


Fair Trade USA and Fairtrade International don’t present certification for craft objects, akin to handmade jewellery, pottery, and art work. However, there are a number of importers and retailers that observe Fair Trade rules when coping with craft employees. These embrace:

  • Fair Trade Federation distributes clothes, jewellery, housewares, equipment, and even musical devices by means of all kinds of shops and on-line markets. As famous above, FTF members don’t must have Fair Trade certification, however they need to adhere to the FTF’s strict code of conduct.
  • SERRV is a nonprofit group that sells handmade presents, clothes, jewellery, and residence decor made by artisans all through the creating world. SEERV is a founding member of the WFTO and FTF, and it pledges to observe Fair Trade rules in all its dealings with its artisan and farmer companions.
  • Bead for Life sells bead jewellery made by Ugandan ladies from colourful recycled paper. Bead for Life, a member of the FTF and the WFTO, says that growing ladies’s revenue helps cut back poverty, enhance the lives of kids, and cut back home violence.
  • Ten Thousand Villages is a nonprofit group that sells jewellery, residence decor, and presents in shops all through the United States and Canada. Ten Thousand Villages is a founding member of the WFTO and is dedicated to truthful wages, long-term relationships with artisans, and environmental sustainability.

fair trade necklaces and crafts

Fair Trade on a Budget

Though Fair Trade is rising quick, Fair Trade items nonetheless account for a reasonably small of the market. One purpose for that is that they typically value greater than different merchandise in the identical class. That’s hardly shocking, contemplating that Fair Trade pays farmers a better value for his or her crops.

On the opposite hand, since Fair Trade importers work straight with farmers and get rid of the intermediary, the upper costs the farmers receives a commission don’t all the time translate into larger costs for the buyer. Fair Trade USA factors out in its FAQ that whereas some Fair Trade Certified merchandise, akin to bananas, are likely to value way more than typical variations, Fair Trade Certified espresso and chocolate value about the identical as “other gourmet specialty coffees and chocolates.”

In truth, in some instances, Fair Trade merchandise really value barely lower than typical equivalents. For occasion, a one-pound bag of natural, Fair Trade espresso from the Congo area prices $12 within the Equal Exchange on-line retailer, whereas a one-pound bag of Ethiopian espresso from Starbucks – which is neither Fair Trade nor natural – prices $14. A easy sleeveless cotton dress from Mata Traders, made by a Fair Trade ladies’s cooperative in India, prices $85; the same dress from ModCloth, which isn’t Fair Trade, prices $110.

Still, if you happen to’re used to purchasing the most affordable espresso on the shelf, it’s simple to get sticker shock from the “gourmet” value of a Fair Trade equal. Here are a number of ideas for buying Fair Trade with out blowing your price range:

  1. Buy in Bulk. Many pure meals shops promote whole-bean espresso in bulk bins, typically at a lower cost per pound than comparable coffees bought in baggage. You may purchase your espresso on-line in five-pound baggage from a Fair Trade seller like Dean’s Beans and pay lower than $10 a pound, together with delivery.
  2. Try Store BrandsTrader Joe’s home model presents a number of Fair Trade espresso varieties for $10 a pound or much less. Archer Farms, a retailer model accessible at Target, has a number of coffees which can be Fair Trade or Direct Trade – that’s, purchased straight from the growers –  at $8.49 for a 12-ounce bag, or round $11.32 per pound.
  3. Shop “Light” Fair Trade. Brands that aren’t Fair Trade licensed can nonetheless promote the targets of Fair Trade. For occasion, you should purchase UTZ Certified espresso at IKEA for about $7.25 a pound and UTZ Certified chocolate bars for $1 apiece. Costco additionally sells some manufacturers of espresso that aren’t Fair Trade Certified however say of their product descriptions, “We work with the farmers to supply healthcare, housing, meal programs, and education to the workers and their families.”
  4. Look for Sales. You can typically discover Fair Trade clothes and craft objects on sale at bodily shops, akin to Ten Thousand Villages, and on-line retailers, akin to Fair Indigo. Both shops have clearance sections as effectively.

Final Word

Shopping Fair Trade can typically value extra, and it undoubtedly doesn’t give you as extensive a variety as having each product in a shopping center – or on the Internet – at your disposal. However, the merchandise which can be accessible, whether or not for espresso, chocolate, or garments, are typically prime quality. So selecting Fair Trade merchandise could be a option to deal with your self and assist others out of poverty on the identical time.

If the upper value of Fair Trade items is a deterrent for you, keep in mind that you don’t have to purchase them on a regular basis. Switching only a small quantity of your consumption to Fair Trade could make a distinction with out making too huge a dent in your pockets.

Do you purchase Fair Trade merchandise? Why or why not?

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