The aim of the fair trade movement is to help poor producers by
offering them 'fairer' terms of trade. Advocates of fair trade
argue that farmers and workers in many developing world countries
are in a very weak position in the global marketplace. They
typically receive only a tiny fraction of the money generated by
their crops or products and face other problems, such as unstable
prices and a lack of access to finance.
Background
This idea of trading with the aim of supporting poor producers
has been around for decades. But fair trade labelling didn't take
off until 1988, when a group of Dutch NGOs and politicians worked
together to promote fairly traded coffee from a cooperative in
Mexico.
This groundbreaking scheme came in response to the collapse of
the world coffee prices, which threatened the livelihoods of
millions of poor farmers. Over the following years, the approach
spearheaded in Holland spread to other countries and the system was
extended to cover new products such as bananas, chocolate and
tea.
What are fair trade products?
Any product traded with ethical principals in mind might be
described as 'fair trade' or 'fairly traded'. However, only
products that have been audited according to a strict set of
specific criteria can carry an official Fairtrade mark.
For a product to display the Fairtrade mark it must meet a set
of minimum standards, which were created to ensure socially
responsible production and trade.
These also support the development of disadvantaged and
marginalised small-scale farmers and plantation workers.
Fairtrade standards relate to three areas of sustainable
development:
- social development;
- economic development; and
- environmental development.
The Fairtrade standards need to be met by producers and their
organisations and by the traders who deal with Fairtrade
products.
The key objectives of the standards are to:
- Ensure a guaranteed Fairtrade minimum price which is agreed
with producers. (Buyers pay a minimum price that covers the cost of
sustainable production. This also acts as a safety net for farmers
at times when world markets fall below a sustainable level.
However, when the market price is higher than the Fairtrade
minimum, the buyer must pay the market price.)
- Provide an additional Fairtrade premium which can be invested
in projects that enhance social, economic and environmental
development, as decided upon democratically by producers within the
farmers' organisation or by workers on a plantation.
- Enable pre-financing for producers who require it (traders make
partial advance payments, when requested by producers).
- Emphasise the idea of partnership between traders.
- Facilitate stable trading relationships between traders and
producers to encourage long-term planning and sustainable
production practices.
- Set clear minimum and progressive criteria to ensure that the
conditions for the production and trade of a product are socially
and economically fair and environmentally responsible.
Fairtrade mark
The Fairtrade mark is not a company's logo but an independent
labelling and certification scheme administered in the UK by the Fairtrade
Foundation - a development organisation committed to tackling
poverty and injustice through trade.
Fairtrade today
Today, Fairtrade-certified products account for a small but
significant portion of Europe's food imports. The system benefits
an estimated 1.5 million farmers and workers (and their
families and communities) in Africa, Asia, Latin America the
Caribbean. In the UK, 7 in 10 people recognise the Fairtrade
mark and the market is presently valued at more than £800
million.
Coffee, chocolate, bananas and tea are still among the most
popular fairly traded products. But now the Fairtrade mark can also
be found on more than 3,000 products including fruit and
vegetables, wine, honey, flowers, cotton clothes, beauty products
and footballs.
The UK is one of the world's leading fair trade markets, with
more products and more awareness of the label than anywhere else.
Around a fifth of all roast and ground coffee, and one in five
bananas sold in the UK are now certified Fairtrade.
In the last five years, major high-street retailers including
Tesco, Boots, and Waitrose have added Fairtrade product lines, with
some making an even larger commitment. All Marks and Spencer tea,
coffee, bagged sugar and conserves, for example, are now Fairtrade,
and Sainsbury's is in the process of converting all of its tea and
coffee to Fairtrade. Cadbury Dairy Milk, Nestle's four-finger
KitKat and all coffee at Pret A Manger, EAT and ATM Coffee are also
Fairtrade.
In February 2010, ice cream giant Ben & Jerry's announced
that they will be going 100 per cent Fairtrade in the UK and
throughout Europe by the end of 2011 and globally by end 2013. This
means that every ingredient they use, from sugar to nuts to cocoa,
that can be Fairtrade certified, will be.
There are even Fairtrade towns, schools, universities and faith
groups, which campaign to raise awareness of trade issues, and
promote the purchase of Fairtrade products in their local
community. The Fairtrade Foundation supports these communities with
their campaigns but doesn't certify them - only products can carry
the label.
Aside from officially certified products, there are also many
ethically traded handicrafts and other items available via
websites, fair trade shops or charity catalogues.
Countering criticism
As the fair trade movement has grown, various questions have
been raised about which products and traders should qualify for
certification. Some commentators have also questioned whether fair
trade is really as "fair" as it seems. Here is the most common
criticism:
- How fair is fair? While they applaud
the aims of fair trade, some critics argue that a fair trade
movement is not the right way to alleviate poverty for developing
world producers. They argue that the global market is fundamentally
biased in favour of wealthier nations, through complex trade rules,
tariffs and subsidies. They argue that the most effective way to
help economically disadvantaged growing communities would be to
lift these barriers and allow them to compete in the marketplace on
an even footing.
- Free market fears. Other critics say that fair
trade can actually damage countries by artificially distorting the
real value of the commodities. Alex Singleton, a fellow at the free
trade think tank, the Adam Smith Institute, for example, argues
that Guatemala's dependence on coffee for fair trade markets is
potentially very damaging, as it ignores the market reality
that "coffee is going to get a lot cheaper". Advocates of the free
market say that fair trade's artificially inflated prices are
unsustainable and out of synch with the rest of global market.
- British Fairtrade. In 2003, a
consultation was held about the possibility of organic farmers in
the UK qualifying for Fairtrade certification. In the end, the idea
was rejected, because consumers felt the scheme should focus
specifically on poor farmers in developing countries.
- Local versus fair trade. Most
Fairtrade certified products are tropical crops that can't be
easily grown in Europe. But since 2003 it has been possible to buy
Fairtrade produce, such as apples from South Africa, which could
have been grown locally. Some environmental campaigners concerned
about 'food miles' feel that this introduces an unnecessary clash
between ethical trade and climate protection.
- The Nestlé debate. In 2005, Nestlé
started selling Fairtrade certified coffee under its Partners Blend
brand. Many environmental commentators felt this was controversial
because of the criticism Nestlé has received over the years over
various ethical issues. But the Fairtrade Foundation considered
Nestlé's decision a huge success, demonstrating that fair trade
principles were starting to influence major corporations.
Such debates aside, there's no doubting the huge success of the
fair trade movement over the past two decades. And, with the sales
of Fairtrade-certified products continuing to rise steeply, the next ten years look set to
see even greater success.