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producers in Ecuador .]]Fair trade is an organized Social Movement which promotes standards for international Labor , Environmentalism , and social policy in areas related to production of Fairtrade labeled and unlabeled Goods . The movement focuses in particular on exports from developing countries to developed countries. Fair trade's strategic intent is to deliberately work with marginalised producers and workers in order to help them move from a position of vulnerability to security and economic self-sufficiency. It also aims at empowering them to become stakeholders in their own organizations and actively play a wider role in the global arena to achieve greater equity in International Trade . Fair trade proponents include a wide array of international religious, development aid, social and environmental organizations such as Oxfam , Amnesty International , and Caritas International . As have most Developmental Efforts , fair trade has proved itself controversial and has drawn criticism from both ends of the Political Spectrum . Some economists and conservative Think Tanks see fair trade as a type of Subsidy that impedes growth. Segments of the Left criticize fair trade for not adequately challenging the current trading system. In 2006 , Fairtrade Certified sales amounted to approximately €1.6 billion worldwide, a 41% year-to-year increase.Fairtrade Labelling Organizations International (2007). www.fairtrade.net. URL accessed on May 24, 2007. While this represents less than one hundredth of a percentage point of world trade in physical merchandise, p. 3, The World Trade Organisation publishes annual figures on the world trade of goods and services. fair trade products generally account for 0.5-5% of all sales in their product categories in Europe and North America.FINE. (2005) [http://www.ifat.org/downloads/marketing/FairTradeinEurope2005.pdf Fair Trade in Europe 2005: Facts and Figures on Fair Trade in 25 European countries . Brussels: Fair Trade Advocacy Office In October 2006, over 1.5 million disadvantaged producers worldwide were directly benefiting from fair trade while an additional 5 million benefited from fair trade funded infrastructure and community development projects. DEFINITION OF FAIR TRADE The most widely recognized definition of fair trade was created by FINE , an informal Association of the four main fair trade networks ( Fairtrade Labelling Organizations International , International Fair Trade Association , Network Of European Worldshops and European Fair Trade Association ):European Fair Trade Association. (2006). Definition of Fair Trade URL accessed on August 2, 2006. KEY FAIR TRADE PRINCIPLES beans on a fair trade plantation in Guatemala ]] Fair trade advocates generally support the following principles and practices in trading relationships:International Fair Trade Association (2006). Key Principles of Fair Trade URL accessed on August 2 2006. ;Creating opportunities for economically disadvantaged producers :Fair trade is a strategy for poverty alleviation and Sustainable Development . Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system. ; Transparency and accountability :Fair trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners. ;Capacity building :Fair trade is a means to develop producers’ independence. Fair trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets. ;Payment of a fair price :A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fairtraders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing. ; Gender Equity :Fair trade means that the work of men and women is properly valued and rewarded. Each person is always paid for their contribution to the production process and are empowered in their organizations, regardless of gender. ;Working conditions :Fair trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention On The Rights Of The Child as well as the law and norms in the local context. ; Environmental Protection :Fair trade actively encourages better environmental practices and the application of responsible methods of production. GENERAL STRUCTURE OF THE MOVEMENT products sold in Germany ]]Most fair trade import organizations are members or certified by one or several national or international federations. These federations coordinate, promote and facilitate the work of fair trade organizations. The following are the largest and most influential:
In 1998, these four federations created together FINE , an informal association whose goal is to harmonize fair trade standards and guidelines, increase the quality and efficiency of fair trade monitoring systems and advocate fair trade politically.
Student groups have also been increasingly active in the past years promoting fair trade products both on their campuses and their communities. Although hundreds of independent student organizations are active worldwide, most groups in North America are either affiliated with United Students for Fair Trade (USA) or the Canadian Student Fair Trade Network (Canada). HISTORY See Also: History of fair trade The first attempts to commercialize fair trade goods in Northern markets were initiated in the ranging from Jute goods to Cross-stitch work, were mostly sold in churches or fairs. The goods themselves had often no other function than to indicate that a donation had been made.Hockerts, K. (2005). The Fair Trade Story . p1 Solidarity trade The current fair trade movement was shaped in Europe in the ( United Nations Conference On Trade And Development ) to put the emphasis on the establishment of fair trade relations with the developing world.International Fair Trade Association. (2005). Where did it all begin? URL accessed on August 2, 2006. The year NGO Oxfam launched "Helping-by-Selling", a program which sold imported handicrafts in Oxfam stores in the UK and from mail-order catalogues. In 1969 , the first Worldshop opened its doors in the Netherlands. The initiative aimed at bringing the principles of fair trade to the retail sector by selling almost exclusively goods produced under fair trade terms in “underdeveloped regions”. The first shop was run by volunteers and was so successful that dozens of similar shops soon went into business in the Benelux countries, Germany and in other Western European countries. Throughout the being established on both sides of the Atlantic, of scores of Worldshops being set up, and of well-organized actions and campaigns attacking exploitation and foreign domination, and promoting the ideals of Nelson Mandela , Julius Nyerere and the Nicaraguan Sandinistas : the right to independence and self-determination, to equitable access to the world’s markets and consumers. Handcrafts vs. agricultural goods In the early 1980s, Alternative Trading Organizations faced a major challenge: the novelty of some fair trade products started wearing off, demand reached a plateau and some handicrafts began to look “tired and old fashioned” in the marketplace.Redfern A. & Snedker P. (2002) Creating Market Opportunities for Small Enterprises: Experiences of the Fair Trade Movement . International Labor Office. p6The decline of segments of the handicrafts market forced fair trade supporters to rethink their business model and their goals. Moreover, fair trade supporters during this period became increasingly worried by the impact of the fall of agricultural Commodity prices on poor producers. Many then believed it was the movement's responsibility to address the issue and to find innovative remedies to react to the ongoing crisis in the industry. In the subsequent years, fair trade agricultural commodities played an important role in the growth of many and coffee, quickly followed by dried Fruits , cocoa, sugar, Fruit Juices , Rice , Spices and Nuts . While in 1992, a sales value ratio of 80 % handcrafts to 20 % agricultural goods was the norm, in 2002 handcrafts amounted to 25.4 % of sales while commodity food lines were up at 69.4 %.Nicholls, A. & Opal, C. (2004). Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications. Rise of labelling initiatives Sales of fair trade products however only really took off with the arrival of the first Fairtrade Labelling initiatives. Although buoyed by ever growing sales, fair trade had been generally contained to relatively small Worldshops scattered across Europe and to a lesser extent, North America . Some felt that these shops were too disconnected from the rhythm and the lifestyle of contemporary developed societies. The inconvenience of going to them to buy only a product or two was too high even for the most dedicated customers. The only way to increase sale opportunities was to start offering fair trade products where consumers normally shop, in large distribution channels.Renard, M.-C., (2003). Fair Trade: quality, market and conventions. Journal of Rural Studies, 19, 87-96. The problem was to find a way to expand distribution without compromising consumer trust in fair trade products and in their origins. A solution was found in 1988 , when the first Fairtrade Labelling initiative, Stichting Max Havelaar , was created under the initiative of Nico Roozen , Frans Van Der Hoff and Dutch development NGO Solidaridad . The independent certification allowed the goods to be sold outside the Worldshops and into the mainstream, reaching a larger consumer segment and boosting fair trade sales significantly. The Labeling Initiative also allowed customers and distributors alike to track the origin of the goods to confirm that the products were really benefiting the producers at the end of the Supply Chain .Redfern A. & Snedker P. (2002) Creating Market Opportunities for Small Enterprises: Experiences of the Fair Trade Movement . International Labor Office. p7 The concept caught on: in the ensuing years, similar non-profit Fairtrade labelling organizations were set up in other European countries and North America. In 1997 , a process of convergence among labelling organizations – or “LIs” (for “Labelling Initiatives”) – led to the creation of Fairtrade Labelling Organizations International . FLO is an umbrella organization whose mission is to set the Fairtrade standards, support, inspect and certify disadvantaged producers and harmonize the Fairtrade message across the movement. In 2002 , FLO launched for the first time an International Fairtrade Certification Mark . The goals of the launch were to improve the visibility of the Mark on supermarket shelves, facilitate cross border trade and simplify procedures for both producers and importers. At present, the certification mark is used in over 50 countries and on dozens of different products, based on FLO’s certification for coffee, tea, rice, Banana s, Mangoes , cocoa, cotton, sugar, Honey , Fruit Juices , Nuts , Fresh Fruit , Quinoa , Herbs and Spices , Wine and Footballs etc. Fair trade today Global fair trade sales have soared over the past decade. The increase has been particularly spectacular among Fairtrade labelled goods: in 2006 , these sales amounted to approximately €1.6 billion worldwide, a 41 % year-to-year increase.Fairtrade Labelling Organizations International (2007). www.fairtrade.net. URL accessed on May 24, 2007. As per December 2006 , 569 producer organizations in 58 developing countries were FLO-CERT Fairtrade certified and over 150 were IFAT registered..Fairtrade Labelling Organizations International (2007). www.fairtrade.net. URL accessed on May 24, 2007.IFAT. (2006) The FTO Mark . URL accessed on October 30, 2006. FAIRTRADE CERTIFICATION AND LABELLING ]] ( USA & Canada )]] See Also: Fairtrade certification Fairtrade Labelling Organizations (FLO) product certification ''Note: Customary spelling of Fairtrade is one word when referring to the FLO product labelling system'' Fairtrade labelling (usually simply Fairtrade or Fair Trade Certified in the US ) is a certification system designed to allow consumers to identify goods which meet agreed standards. Overseen by a standard-setting body ( FLO International ) and a certification body ( FLO-CERT ), the system involves independent auditing of producers and traders to ensure the agreed standards are met. For a product to carry either the International Fairtrade Certification Mark or the Fair Trade Certified Mark , it must come from FLO-CERT inspected and certified producer organizations. The crops must be grown and harvested in accordance with the international Fairtrade standards set by FLO International . The Supply Chain must also have been monitored by FLO-CERT , to ensure the integrity of labelled products. Fairtrade Certification guarantees not only fair prices, but also the principles of Ethical Purchasing . These principles include adherence to ILO agreements such as those banning child and Slave Labour , guaranteeing a safe workplace and the right to Unionise , adherence to the United Nations charter of Human Rights , a fair price that covers the cost of production and facilitates social development, and protection and conservation of the environment. The Fairtrade certification system also promotes long-term business relationships between buyers and sellers, crop prefinancing and greater transparency throughout the supply chain. The Fairtrade Certification system covers a growing range of products, including Banana s, Honey , Coffee , Oranges , Cocoa , Cotton , dried and fresh fruits and vegetables, juices, nuts and oil seeds, Quinoa , Rice , Spices , Sugar , Tea and Wine . Companies offering products that meet the Fairtrade standards may apply for licences to use one of the Fairtrade Certification Marks for those products. The International Fairtrade Certification Mark was launched in 2002 by FLO , and replaced twelve Marks used by various Fairtrade labelling initiatives. The new Certification Mark is currently used worldwide (with the exception of Canada and the United States). The Fair Trade Certified Mark , used in Canada and in the United States, also still identifies Fairtrade goods in both countries. Full transition to the new Mark should become reality in the future as it gradually replaces the old Certification Marks in both countries. IFAT Fair Trade Organization certification In an effort to complement the Fairtrade product certification system and allow most notably handcraft producers to also sell their products outside Worldshops , the International Fair Trade Association (IFAT) launched in 2004 a new Mark to identify fair trade organizations (as opposed to products in the case of FLO International and Fairtrade ). Called the FTO Mark, it allows consumers to recognize registered Fair Trade Organizations worldwide and guarantees that standards are being implemented regarding working conditions, wages, child labour and the environment. The FTO Mark gave for the first time all Fair Trade Organizations (including Handcrafts producers) definable recognition amongst consumers, existing and new business partners, governments and donors. FAIR TRADE IMPACT STUDIES Several independent studies have recently measured the impact of fair trade on disadvantaged farmers and workers. In 2002, Loraine Ronchi of the Poverty Research Unit at the University Of Sussex studied the impact of fair trade on the Coocafe cooperative in Costa Rica . Ronchi found that fair trade strengthened producer organizations and concluded that "in light of the coffee crisis of the early 1990s , fair trade can be said to have accomplished its goal of improving the returns to small producers and positively affecting their quality of life and the health of the organisations that represent them locally, nationally and beyond".Ronchi, L. (2002). The Impact of Fair Trade on Producers and their Organizations: A Case Study with Coocafe in Costa Rica . University of Sussex. p25-26. In 2003, the Fair Trade Research Group at Colorado State University conducted seven case studies of Latin American Fairtrade coffee producers (UCIRI, CEPCO, Majomut, Las Colinas & El Sincuyo La Selva, Tzotzilotic and La Voz) and concluded that Fair Trade has "in a short time greatly improved the well-being of small-scale coffee farmers and their families"Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America . Colorado State University, p28 The various case studies most notably found that producers had under Fair Trade greater access to credit and external development funding.Taylor, Pete Leigh (2002). Poverty Alleviation Through Participation in Fair Trade Coffee Networks , Colorado State University, p18. The studies also found that Fair Trade producers had, compared to conventional coffee producers, greater access to training and enhanced ability to improve the quality of their coffee.Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America . Colorado State University, p8. Families of Fair Trade producers were also said to be more stable and children had better access to education than in families growing conventional coffee.Murray D., Raynolds L. & Taylor P. (2003). One Cup at a time: Poverty Alleviation and Fair Trade coffee in Latin America . Colorado State University, p10-11 A case study of Bolivian coffee Fair Trade producers published by Nicolas Eberhart for French NGO Agronomes Et Vétérinaires Sans Frontières in 2005 concluded that Fair Trade certification has had in the Yungas a positive impact on local coffee prices, thus economically benefiting all coffee producers (Fairtrade certified or not). Fair Trade was also said to have strengthened producer organizations and increased their political influence.Eberhart, N. (2005). Synthèse de l'étude d'impact du commerce équitable sur les organisations et familles paysannes et leurs territoires dans la filière café des Yungas de Bolivie . Agronomes et Vétérinaires sans frontières, p29. An econometric analysis conducted by Becchetti and Costantino (2006) verified the impact of Fair Trade affiliation on monetary and non monetary measures of well-being on a sample of Kenya n farmers. The researchers compared a Control Sample Group of farmers to Fair Trade Certified groups and Meru herbs farmers. Becchetti and Costantino documented the following: during the same period, Fair trade farmers were more successful in diversifying their production, experienced a significant drop in child mortality, improvements in terms of monthly household food consumption, greater satisfaction in terms of prices obtained for their crop, living conditions etc. Methodological problems such as the relative contribution of Fair Trade and Meru herbs farmers, control sample bias, Fair trade and Meru Herb selection biases are discussed and addressed showing that ex ante selection of Meru members contributes to explain some but not all the results of the study. L. Becchetti,, M. Costantino (2006). Fair Trade on marginalised producers: an impact analysis on Kenyan farmers, working paper CEIS 220 and working paper ECINEQ2006 A sociological research published by Virginie Diaz Pedregal (2006) analyzes practices of exchange and the effects of « fair division » in coffee organizations using fair trade in the Andean context (Peru, Ecuador and Bolivia). The study deals with the way beneficiaries perceive fair trade, and its importance within the communities. Positive and negative effects of fair trade are discussed. Diaz Pedregal, Virginie (2006). Commerce équitable et organisations de producteurs. Le cas des caféiculteurs au Pérou, en Equateur et en Bolivie. Paris, L'Harmattan Michigan State University assistant professor Daniel Jaffee conducted a four year study of the impact of fair trade on Michiza cooperative coffee producers, in Oaxaca , Mexico . Jaffee's findings, published in the 2007 book "Brewing Justice: Fair Trade Coffee, Sustainability, and Survival", provide a nuanced view of fair trade: "Fair trade's higher prices increase gross household income - although, because most fair trade coffee is also certified organic, producers have higher costs of production as well. Participation in fair trade reduces households' debt and enhances their economic options, affording them the possibility of better feeding and educating their children. Fair trade affords peasant farmers partial protection from some of the worst aspects of commodity crises and in many cases allows them the breathing room needed to engage in more sustainable agricultural practices. Furthermore, the extra capital from fair trade can generate important economic ripple effects within communities, providing additional employment even for nonparticipating families. However, fair trade is not a panacea, and it does not bring the majority of participants out of poverty. (...) Demand for fair trade products must increase dramatically in order to augment the economic benefits for such small farmer families and allow the system to include many more producers of coffee and other commodities around the world."Jaffee, Daniel (2007). Brewing Justice: Fair Trade Coffee, Sustainability and Survival. University of California Press. ISBN: 978-0-520-24959-2 FAIR TRADE AND POLITICS European politics head office]] As early as 1994 , the European Commission prepared the “Memo on alternative trade” in which it declared its support for strengthening Fair Trade in the South and North and its intention to establish an EC Working Group on Fair Trade. Furthermore, the same year, the European Parliament adopted the “Resolution on promoting fairness and solidarity in North South trade” (OJ C 44, 14.2.1994), a resolution voicing its support for fair trade. In 1996 , the Economic And Social Committee adopted an “Opinion on the European “Fair Trade” marking movement”. A year later, in 1997 , the document was followed by a resolution adopted by the European Parliament, calling on the Commission to support Fair Trade Banana operators. The same year, the European Commission published a survey on “Attitudes of EU consumers to Fair Trade bananas”, concluding that Fair Trade bananas would be commercially viable in several EU Member States.FINE (2006). Business Unusual. Brussels: Fair Trade Advocacy Office |
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