Fair Trade is an international system of doing business based on dialogue, transparency and respect. It contributes to sustainable development by offering better trading conditions for producers and workers in developing countries. Behind the principles and goals of Fair Trade is a rigorous international system of monitoring, auditing and certification.
The international Fair Trade system is structured to produce the following outcomes for farmers and workers in developing countries:
- Fair compensation for their products and labour
- Sustainable environmental practices
- Improved social services
- Investment in local economic infrastructure
How Fair Trade Started
Fair Trade began 50 years ago in Africa and Europe. It started with small-scale farmers working in conjunction with international aid organizations from industrialized countries. The farmers and workers in Africa were struggling with a combination of low market prices for their produce and a high dependency on unscrupulous intermediaries. It entrenched their families and local economies in a cycle of poverty. Together with aid organizations the producers laid the foundation for a trading system that ensured a fair price for their produce and a direct road to European markets.
A New Evolution
From the aid organizations evolved a new type of non-profit business structure known as alternative trade organizations or ATOs. Most were run by volunteers. They set up what were known as World Shops in Europe and North America. Parallel to the ATOs, a new group of entrepreneurs also arose and created for-profit companies that were driven by the principles of Fair Trade. This latter type of company was and is particularly common in Canada.
Fair Trade Certification
In the late 1980s an international system of Fair Trade certification and labelling was introduced. It was an opportune time to establish a set of standards and labelling as there was a growing consumer demand for Fair Trade products. There was also growing commercial interest. Consumers needed a guarantee that their purchases were truly benefiting the producers and workers. The Fair Trade Certified logo is managed by TransFair Canada, a non-profit organization that provides third-party certification of the products.
Companies or organizations wanting to trade, import, produce or sell Fair Trade Certified products sign a contract with TransFair Canada and must follow stringent business rules and terms for use of the logo.
The certification and labelling system has helped increase the scale and scope of products available, bringing Fair Trade Certified products beyond the World Shops into the mainstream grocery stores. There are now 19 national Fair Trade Labelling Initiatives that work under the international umbrella of Fairtrade Labelling Organizations International (FLO). Today, there are close to a million farmers in 44 developing countries working within and benefiting from the sale of Fair Trade Certified products.
Today and Tomorrow
The first 50 years of Fair Trade have been filled with many successes. Hundreds of thousands of farmers and workers have gained a greater economic stability as a result and their communities have benefited from important infrastructures paid for by the Fair Trade Certified premiums.
Globally, there are dozens of Fair Trade Certified products, such as coffee, tea, rice, bananas, mangoes, cocoa, sugar, honey, fruit juices and sports balls. They can be found in stores, small and large, across Europe, Japan and North America. Other fresh fruit, wines, nuts, oils and non-food products will soon be added to the list of Fair Trade Certified products.
While much progress has been made in recent years, many of the same conditions of trade found 50 years ago still exist. There is still a long way to go. However, it may be a quick ride. There is a momentous push coming from the grassroots consumer level to move Fair Trade into the mainstream. Churches, communities, schools, businesses and consumer groups are taking up the cause with energy. The topic of Fair Trade is now reaching the corridors of political and business power. Large grocery stores chains are getting involved. Some multinational companies are beginning to offer Fair Trade Certified products. Fair Trade is being promoted by consumer groups not just as a nice alternative, but THE way to do business for the future of global trade.