A Beginner’s Guide to Understanding Fair Trade

A Beginner’s Guide to Understanding Fair Trade

Fair trade is a trading partnership that aims to contribute positively to sustainable development by offering more beneficial trading conditions and advocating for the rights of marginalized producers and workers. It’s designed to help product producers in developing countries create more sustainable and better long-term development and working conditions. When you shop fair trade, you’re directly aiding a global movement that pushes for fair wages, safe working conditions, environmental awareness, and product transparency. While it’s a complex certification process and there are many moving parts, consumers can become educated and, in turn, support fair trade businesses. Here is a helpful beginner’s guide to understanding fair trade and all its benefits and functionalities.

How it works

Getting a product “Fair Trade Certified” begins at the source and is regulated from its creation to the shelf. It all starts with the farmers. Farmers of produce, materials, and other products often are located in impoverished countries and areas. They generally farm for a living, and their produce is their family’s only income. With larger farms and production companies encroaching on their market space, they can run into issues trying to match the prices of these giants. This often leads to smaller, local farmers dropping their prices to an unsustainable level, which prevents them from taking enough income to live comfortably or sustain ethical practices. Fair trade combats this and levels the playing field for these smaller producers. Fair trade guarantees producers a stable minimum product price—even when the marketspace dips.

There are more benefits than simply increasing profits and providing fair wages for fair work. There are rigorous requirements production farms must meet to keep their place as fair trade certified producers. Fair trade certified systems forbid child labor, slave labor, and any other form of forced labor. They also must provide safe and fair working conditions. More than half of the fair trade products imported into the U.S. are organic. These organic farming practices are encouraged and incentivized by Fair Trade USA—they’re committed to providing training and resources for farmers and offering to pay more for organic goods.

Overall, the fair trade certification’s requirements aim to provide these main global benefits:

Putting people and planet before profit

Fair trade is all about ethical and sustainable methods of providing goods for consumers. The ultimate goal is to benefit the planet as a whole. The planet benefits from more environmentally-friendly and sustainable farming and production methods. The global community benefits from ethical economic development and investment in trades of marginalized communities and areas—this is in an attempt to lessen poverty globally.

Fighting poverty in a long-term sense

Another goal of fair trade is to lessen poverty’s effects on communities around the globe. The model is designed to systematically lessen poverty around the world. This is achieved by creating sustainable supply-chain and farming practices that lead to both long-term economic stability and the formation of fairly paid industries in developing countries.

Systematically fighting climate change

As climate change increasingly proves to be an issue, many are growing unhinged at the idea of sitting idly by. Fair trade practices aim to incentivize farming and factory systems to use natural and safe materials in all their processes, which will in turn fight climate change.

Providing a model for ethical supply-chain management’s future

The current free trade system is unsustainable and contributes to the poverty cycle’s continuation, dangerous working conditions, and environmentally-unfriendly business practices. Fair trade provides a model that demonstrates the potential for a globally beneficial system that provides consumer-demanded products without the negative social, economic, and environmental effects.

Fighting gender inequality by investing in women-centric industries

In cultures around the world, women face extreme inequalities and are often not able to work outside the home for various reasons. Historically, domestic work is underpaid and underappreciated. Women also are the majority of those who complete homework. By investing in women-centric industries, such as crafting, good production, and other home-based productions, the gender inequality gap can start to be mended by offering women fair wages for their work.

Fostering ethical business practices through consumer concern

Fair trade products are in high demand—especially with younger generations. The more the general consumer learns about the unethical and dangerous work that goes into their favorite products, the more demand there is for sustainable business practices. Consumers today want to know where their goods are coming from and that the people who make the goods are treated humanely and paid fairly. The creation and increasing popularity of fair trade products demonstrates that there’s still profit potential for businesses operating ethically and sustainably.

How a supply chain can become fair trade

It takes an average of six to nine months for a producer to fully achieve their Fair Trade Certification status. They must meet all of the many specific requirements in social, environmental, and economic standpoints before qualifying. Some examples of requirements that must be met are:

  • No use of harmful agrochemicals
  • No GMOs
  • Responsible waste management
  • Protection of soil, water, and biodiversity
  • Low energy usage and greenhouse gas emissions

Traders and retailers must also go through meticulous inspections, audits, and other requirements to become Fair Trade Certified. Traders are those who buy, store, or process any unfinished fair trade certified products, raw materials, or other items. They also can sell unfinished products to a fair trade licensed retailer or other certified traders. Retailers sell finished products packaged with the Fair Trade USA mark. This mark is a way for consumers to know they’re buying a product that contributes to ethical and sustainable supply-chain management and goods creation.

Traders are required to provide their full supply-chain details for all products they trade in the fair trade marketplace. They also undergo regular audits and other checks on their systems.

Many people look to find fair trade items for their closets, pantries, and homes. There is a wide range of products available, from stylish clothing to fair trade market baskets, to fill both your home and heart —all with the relief that you’re directly contributing good into the world.

Guide to Understanding Fair Trade


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