A guide to Fairtrade and how the FAIRTRADE Mark works

The purpose behind the FAIRTRADE Mark is to strengthen the economic position of disadvantaged producers. Millions of landless labourers and small farmers are denied what should be their right: enough to feed their families, send their children to school and that little extra to invest in sustainable development.

Clearly, the advantages of international trade are not visible to all people in the world. For small farmers, access to markets and price information is difficult and, as a result, many small farmers become increasingly dependent on middlemen. In bad times, many lose their only asset: their land and, thus, their livelihoods.

Similarly, many plantation workers do not see the benefits of increasing world trade. Many endure low pay, an unsafe working environment and poor living conditions. Too often they lack the freedom to join a trade union to defend their rights and the opportunity to participate in decisions that affect their lives on the plantation.

What is the History

The first Fairtrade label was launched in 1988 in the Netherlands and applied only to coffee. It was a specific response to the collapse of the world coffee price, which fell for some years to far less than the cost of production, and led to much suffering for coffee farmers and their families.

Since then, labels have been launched in 16 other countries, in Europe, North America and Japan, and the products have gained between 1% and 14% market share. In the UK, the first FAIRTRADE Mark products appeared in 1994 (chocolate, coffee and tea) and, from a small base, sales are still expanding rapidly – by around 40% per year.

Fair trade companies like Oxfam and Traidcraft and development agencies such as Christian Aid and CAFOD have supported Fairtrade since the beginning, and we work closely together to strengthen producers, raise awareness, and develop agreed international standards of Fairtrade which will allow more products to carry the FAIRTRADE Mark.

Fairtrade is the reason that the small farmers in our association still have a livelihood at all. The most important effect of Fairtrade is the feeling that we can challenge the dependence on the big companies with all those inequalities…. We, small producers, have changed things and you can see the difference.” – Jorge Ramirez, El Guabo, Ecuador

Find out more on the Fairtrade Foundation Website History page.

FAIRTRADE Standards

The problems experienced by poor producers and workers in developing countries differ greatly from product to product. The majority of coffee and cocoa, for example, is grown by independent small farmers working their own land and marketing their produce through a local co-operative. For these producers, receiving a fair price for their beans is more important than any other aspect of a fair trade. Most tea, however, is grown on estates. The concerns for workers employed on tea plantations are fair wages and decent working conditions.

To address this there are two sets of generic producer standards; one for small farmers and one for workers on plantations and in processing factories. The first set applies to smallholders organised in co-operatives or other organizations with a democratic, participative structure. The second set applies to organised workers, whose employers pay decent wages, guarantee the right to join trade unions and provide decent housing, where relevant. On plantations and in factories, minimum health and safety as well as environmental standards must be complied with, and no child or forced labour can occur.

As Fairtrade is also about development, the generic standards distinguish between minimum requirements which producers must meet to be certified Fairtrade. Progress requirements also encourage producer organisations to continuously improve working conditions and product quality, to increase the environmental sustainability of their activities and to invest in the development of their organisations and the welfare of their members or workers.

Trading standards stipulate that traders must:

• pay a price to producers that covers the costs of sustainable production and living;

• pay a premium that producers can invest in development;

• make partial advance payments when requested by producers;

• sign contracts that allow for long-term planning and sustainable production practices.

How does it work for producers

Fairtrade Labeling Organisations International (FLO) is the umbrella organisation uniting the 17 national initiatives including the Fairtrade Foundation. FLO acts as a certification body, setting Fairtrade standards, and monitoring the producers to ensure that they meet the standards and that individual producers are benefiting from the Fairtrade arrangements. 

“Before, I was someone that took a box and loaded it onto a train. That was my only responsibility. In this new system, I have become an international businessman.” – Arturo Gomez, Costa Rica.

FAIRTRADE Mark products

Currently, more than 2,000 coffee, tea, fresh fruit, chocolate, cocoa, juice, sugar, honey and wine products carry the FAIRTRADE Mark. Fairtrade coffee, tea and other products are also offered by more than 25 catering suppliers nationwide. New products in 2004 include Fairtrade vegetables, roses.

For more information look at the
FAIRTRADE Foundation.org.uk website

Which was the source of this material.