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About Fair Trade

What is fair trade?
The fair trade movement is a global network of producers, traders, marketers, advocates and consumers focused on building equitable trading relationships between consumers and the world's most economically disadvantaged artisans and farmers.

What is a fair wage?
Producers receive a fair wage when they are paid fairly for their products. This means that workers are paid at least that country's minimum wage. Since the minimum wage is often not enough for basic survival, whenever feasible, workers are paid a living wage, which enables them to cover basic needs, including food, shelter, education and health care for their families. Paying fair wages does not necessarily mean that products cost the consumer more. Since fair trade organizations bypass exploitative middlepeople and work directly with producers, they are able to cut costs and return a greater percentage of the retail price to the producers.

What does "fair" really mean?
The word "fair" can mean a lot of different things to different people. In alternative trade organizations, "fair trade" means that trading partnerships are based on reciprocal benefits and mutual respect; that prices paid to producers reflect the work they do; that workers have the right to organize; that national health, safety, and wage laws are enforced; and that products are environmentally sustainable and conserve natural resources.

Products sold by fair trade organizations are often items like crafts. How can fair trade provide stability to producers if it's based on non-essential items?
Craft items often play an important cultural role in the society in which they're produced. Clothing, utensils, bowls, baskets, and ritual items are windows into the heart of a culture. As we embrace becoming citizens of the world, our appreciation for cultures other than our own is magnified.

Since the value of fair trade goods is so small compared with that of profit-oriented trade, isn't fair trade insignificant in its impact?
For a Peruvian weaving cooperative making only a few hundred dollars a year, a $1,000 craft sale to a fair trade organization is a significant increase in income. In some parts of the world, fair trade earnings are turned over to the community to improve quality of life. The money may fund a potable water system or provide health education or bring an adult literacy program to the community.

Do fair trade goods cost more than comparable non-fair trade goods?
Generally, fairly traded items do not cost more than other goods because the large percentage taken by middle people is removed from the equation. The cost remains the same as traditionally traded goods; however, the distribution of the cost of the product is different. In some cases, like coffee, the producers receive a significant price more per pound, and the price is higher than grocery store coffee, but comparable to gourmet coffees.

Fair Trade Facts

(source: Fair Trade Federation)
  • Worldwide, fair trade sales total $400 million each year.
  • In North America , fair trade retail sales totaled $35 to 40 million in 1998.
  • Of $3.6 trillion of all goods exchanged globally, fair trade accounts for only .01%.
  • Fair trade businesses return 1/3 to 1/4 of profits back to producers in developing countries.
  • According to the National Labor Committee, a Haitian sewing clothing for the U.S. market may earn less than 1% of the retail price.
  • North American consumers pay $4 to $11 a pound for coffee bought from growers for about 80 cents a pound. Growers who sell to fair trade organizations earn $1.12 to $1.26 a pound.
  • Sixty to seventy percent of the artisans providing fair trade hand-crafted products are women. Often these women are mothers and the sole wage earners in the home.

How do fair trade organizations differ from commercial importers?
  • Fair trade organizations' goal is to benefit the artisans we work with, not maximize profits. By reducing the number of middlemen and minimizing overhead costs, we return up to 40 percent of the retail price of an item to the producer.
  • Fair trade organizations work with producer co-operatives that use democratic principles to ensure that working conditions are safe and dignified, and that producers have a say in how their products are created and sold. Co-operatives are encouraged to provide benefits such as health care, child care and access to loans.
  • Fair trade organizations encourage producers to reinvest their profits into their communities. Many producers who work with fair trade organizations have committed time and money to build health clinics and support other community projects in their villages.
  • Some fair trade organizations work to shift processing and packaging activities to the developing world, so that as much work as possible will remain in the producer country. Often, such activities are performed abroad, depriving the neediest countries of the opportunity to boost their incomes.

Will fair trade ever be the majority and will sweatshops ever cease to exist?
We certainly are doing what we can to help make that happen.

Unfortunately, in a world virtually free of borders, corporations and multi-national manufacturers can search the globe for subcontractors and suppliers in countries where regulations are weak, operating costs are low, and workers are exploited. This outsourcing also allows companies to claim they aren't responsible for the abuse in the sub-contracted factories.

Educated consumers can make the choice to support fair trade through their economic power. By helping support fair trade organizations, each and every one of us can make our voices heard. And, as Margaret Mead once said: “ Never doubt that a small group of thoughtful, committed people can change the world. Indeed, it is the only thing that ever has.”