What is fair trade? And is it even a good thing?

What is fair trade? And is it even a good thing? / Embers on the Hearth

Fair trade has become one of those ‘good’ words associated to food, much like organic or local. But, just like those, most of us don’t really understand what fair trade really means or what products can actually be fair trade. It is usually seen as a beneficial thing, even something we should prioritise when shopping, but what is it exactly?

Join me as I explore the concept of Fair Trade.

What does fair trade mean?

Even though the concepts of alternative trade and fair trade have been around for a long time, it was only in 2001 that fair trade was formally defined.

The definition doesn’t mention specific food products, and that’s because fair trade goes beyond food and includes toiletries, clothes, and homewares among other products. It also allows for expansion or modification of products if circumstances change over time.

Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade.

It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalised producers and workers, especially in the South. Fair Trade Organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.

International Fair Trade Charter

That all sounds really nice, but it’s not very concrete. Also, it mentions fair trade organisations, which takes us to…

The WFTO, World Fair Trade Organization

There are a lot of fair trade organisations. Many countries have their own, and many countries have more than one. And, as it usually happens, the rules of each organisation are different.

As a way to make it easier for everyone involved the WFTO was created to act as an international grouping of these smaller organisations.

The WFTO has a defined set of rules and standards that all organisations that belong to it have to follow. The actual regulations can be somewhat complex and they can change regularly, but they follow 10 basic principles of fair trade.

Along with the WFTO, there’s also the FLO (fair trade labelling organisations), which mostly handles labelling regulations.

The 10 principles of fair trade

These are pretty self-explanatory, and luckily they are short.

  1. Creating opportunities for economically disadvantaged producers.
  2. Transparency and accountability.
  3. Fair trade practices.
  4. Payment of a fair price.
  5. Ensuring no child labour and forced labour.
  6. Commitment to non-discrimination, gender equity and women’s economic empowerment, and freedom of association.
  7. Ensuring good working conditions.
  8. Providing capacity building.
  9. Promoting fair trade.
  10. Respect for the environment.

These principles are definitely a step-up from the definition of fair trade, but they are still not as concrete as they could be. For example, what does ‘a fair price’ even mean?

Which products can be fair trade?

The exact kind of products changes over time depending on economic and political circumstances. But as of posting the products that can be bought under the fair trade umbrella include:

  • bananas: the most popular fair trade product. In the UK it’s almost impossible to buy non-fairtrade bananas.
  • carbon credits: available for companies that sell or produce fair trade products and used to support renewable energy, efficient energy, and reforestation projects.
  • cocoa
  • coffee
  • cotton
  • flowers and plants: unlike other products, flowers are usually grown in large plantations so the fair trade certification tends to refer to hired labour standards (which include contracts, minimum wages, and the right to form unions).
  • fruit (and juice): these include mango, pineapple, papaya, and avocado.
  • gold (and other precious metals)
  • herbs and spices: pepper, cinnamon, ginger, vanilla, turmeric, nutmeg, saffron… and the list keeps growing.
  • honey
  • nuts and oils: either edible or non-edible (as part of toiletries, cosmetics, and household products), these include a large variety from peanuts to olives, and coconuts to shea nuts.
  • quinoa: the issues arising from quinoa’s worldwide popularity have been in the limelight for several years, and the fair trade certification tries to combat them.
  • rice
  • sports balls: balls might seem a bit of an odd product to give the fair trade certification to, but sports balls need very detailed work and they are a highly-popular product usually produced by underpaid workers under exploitative conditions.
  • sugar
  • tea
  • textiles: as part of the fairtrade textiles programme
  • vegetables: almost every vegetable can be fairtrade, including some lesser known ones.
  • wine
  • composites: these are final products are are made with a combination of fair trade regulated and non-regulated primary products. To be considered fair trade they need to be made with a minimum percentage of fair trade products (the exact amounts depend on the final product).

Criticisms

The easiest criticism comes from the fact that someone like me who is extremely interested in food, fashion, and sustainability has to actively try to find information about what fair trade is. Most people, have heard of fair trade and see as good, but few understand what it really means. And even then, finding the definition and principles is not as straightforward as it should be. It took me quite a bit of clicking around to find them. Don’t even get me started on how incredibly vague they are. At first glance they sound fantastic, but after just a little bit of inspecting, you can see that the information is just not there.

All of this translates into what is now the main criticism most people have of fair trade products: the fact a fair trade label usually means a higher price for consumers. In many cases, a lot higher than non-fair trade products. If we look at chocolate, right now (January 2022), you can buy chocolate on average for about £0.60/100 grams if not fair trade; if we move to fair trade the price goes all the way up to about £2.50/100 grams. That is a massive difference. Which raises the question: is the difference really going to the producers or are the companies using the fair trade labelling as a sign of prestige and as an excuse to bump up prices?

The WFTO doesn’t currently deal with issues affecting consumers, only those affecting producers. Some experts in fair trade think that fair trade organisations should consider consumers, while others don’t. For now, organisations only regulate the origin of products, not the sales to end-consumers.

But even when we do try to check how much producers are getting, finding exact information is extremely hard (if you find something beyond the cocoa farmers piece that keeps getting rehashed all over the internet, I would really appreciate you sharing it in the comments). We can actually check minimum living wages the WFTO tries to implement on Global Living Wage. However, this doesn’t really tell us how much the producers are getting paid. And asking people who live in some of the countries listed, the wages seem quite low and not quite as realistic as they claim to be.

The other big criticism against fair trade is that it has a negative impact on those producers who are not part of fair trade practices. Fair trade producers receive support that usually results in better production, which saturates the market and brings prices down. They still get paid a fair trade price, but their competitors end up losing money and become poorer. Some argue that fair trade goes against market freedom, others that fair trade should be the norm for everyone and then no one would lose.

The third big criticism against fair trade is the increase of exportation in detriment of selling to local markets. According to critics, producers make more money by selling to richer countries than by selling to the national market, which means that the local population can be left a lack of the product (quinoa is the most commonly cited example when it comes to this).

So, is fair trade a good or a bad thing?

As with most things in life, there’s really no clear black and white answer. Fair trade seems to have been started with a very good goal in mind, whether those goals are being reached or not remains to be seems.

Supporting fair trade or not really does depend on where your individual priorities fall and on your own personal code of ethics. And it might even be that you agree with fair trade regulations for some products, but not others.

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