What Is Fairtrade?

The Need and Development
International trade may seem a remote issue, but when commodity prices fall dramatically it has a catastrophic impact on the lives of millions of small scale producers, forcing many into crippling debt and countless others to lose their land and their homes. Too many farmers in the developing world have to contend with fluctuating prices that may not even cover what it costs to produce their crop.

Development agencies recognised the important role that consumers could play to improve the situation for producers. By buying direct from farmers at better prices, helping to strengthen their organisations and marketing their produce directly through their own one world shops and catalogues, the charities offered consumers the opportunity to buy products which were bought on the basis of a fair trade.

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 concern for workers employed on tea plantations is fair wages and decent working conditions.

To address this there are two sets of generic producer standards:

• small farmers
• workers on plantations and in factories

The first set applies to smallholders organised in co-operatives or other organisations 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 good housing when 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. Process requirements also encourage producer organisations to continuously improve working conditions and product quality, to increase their environmental stability of their activities and to invest in the development of their organisations and the welfare of their producers/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.