Understanding The Label: What Does Fair Trade Mean?

by Owner on June 20, 2011

We’ve seen the label. It adorns some of our most treasured vices – coffee, chocolate, wine, and sugar to name a few.  We know it’s the better choice – for people and for the environment. We know it probably costs a little more than the other option.  But do we really know what went into getting that label on that product? What does the fair trade label mean?

What is fair trade? Removing the raw end of the deal

Many of us have been on the raw end of a deal: we paid too much, we got too little, or it wasn’t quite what they said it was. Trade, too, isn’t always even or fair. This statement has proven true countless times throughout our history as developed countries have looked to extract resources from developing countries.

People in poor countries have been mercilessly exploited, forced to produce large quantities of goods for meager wages. This treatment discouraged any form of environmentally sound practices, since producers needed to extract every possible resource regardless of the cost.

To counter this imbalance between rich and poor, the concept of fair trade began in the US in the mid 1940s and became a fully fledged, organized social movement by the late 1980s. The aim of the movement was to improve the working conditions of producers in developing countries and to advocate for higher prices for their products.

It is a strategy for reducing poverty while promoting sustainability. The idea is to put less money in the hand of the middleman and more in the hands of producers. So, instead of coffee growers getting 11 cents for every dollar the coffee consumer spends, they might get 28 cents.

This not only covers the cost of production, but enables the growers to develop with socially and environmentally responsible practices they can afford. More money to the producer also improves their chances of remaining independent rather than being absorbed by some multi-national corporation.

Fair trade also follows other guidelines in furtherance of human rights. It does not allow the exploitation of children as cheap laborers, it ensures women’s work is valued, and it advocates for environmentally sustainable practices.

How does fair trade work? The Fair trade label

In 1997, the Fairtrade Labelling Organizations International (FLO) was established to set international standards for fair trade labeling. It split in 2004 into Fairtrade International (FLO) (www.fairtrade.net), which provides support to producers and develops and reviews Fairtrade standards, and FLO-CERT (www.flo-cert.net), which is responsible for the inspection and certification of producers as well as the auditing of traders.

In most countries, there are third-party certifiers that are responsible for certification of products within their country. Examples include Fair Trade USA, Association Max Havelaar France, and the Fair Trade Associations of Australia and New Zealand.

In order for a product to bear the fair trade label, the producers must comply with a set of generic standards as well as product standards. The standards are provided in full detail on the FLO website but, in general, the fair trade standards set out to:

  • Get producers a Fairtrade minimum price for their product
  • Establish additional funds through a Fairtrade premium that is invested into communities to enhance their social, economic and environmental well-being (e.g. building schools)
  • Identify clear minimum criteria for the conditions of production as well as progressive criteria that encourage improvement over time
  • Advocate for partnerships between trade partners that are mutually beneficial and sustainable

Using fair trade principles at home

A small town in rural Nova Scotia, Wolfville, became Canada’s first fair trade town in 1997. It’s a status awarded by Fairtrade certification bodies to show that communities are committed to the promotion of Fairtrade certified goods.

The beauty of this story is that the mayor of Wolfville saw how local farmers in the area were struggling and decided that fair trade principles could be applied at home as well as in developing countries.  The town council passed a motion to use and promote fair trade products and this included supporting their own local farmers.

Chicago has been named the largest fair trade city in the US, and London, UK the largest in the world. There are now fair trade businesses and schools as well.

What’s in it for me?

Purchasing products that are fair trade certified can give you peace of mind that more money is getting into the hands of the producers, improving their working conditions and enabling development that is economically, socially, and environmentally sustainable. It can help you meet your goal of pushing for more environmentally friendly practices by way of how you vote with your pocketbook.

Of course, some companies will prey upon unwary consumers, and slap a fair trade title on something that may not deserve it. So you have to know your facts and be sure that what you’re buying truly passes muster as fair trade–primarily by looking for your country’s certified fair trade logo. If you have any concerns or doubts as to whether a product is fair trade certified, visit the website for the certifying agency in your country. They usually carry a product list on their website. If you see a misuse of the fair trade label, report it to them immediately.

So there you have it. What does fair trade mean? At the end of the day, it means a better, more environmentally friendly, economically just world for local producers and for you.

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