SEATTLE — The year 2018 marked the 20-year anniversary of Fairtrade U.S., a nonprofit that has risen from obscurity to become a key player within a globally recognized brand. What is the impact of the fair trade movement today, and how might it shape tomorrow’s world?
Fairtrade or Fair Trade?
Fair trade is a generic term referring to a worldwide movement promoting fair, sustainable wages to farmers and artisans in developing countries. The globe recognizes Fairtrade, which is a symbol that a product meets the fair trade standards regarding production and selling. The global Fairtrade system now represents over 1.65 million small-scale farmers and workers.
The Fairtrade Labelling Organizations International was founded in 1997 to provide a unifying standard for the various international organizations that were working in line with fair trade principals. The following year, TransFair U.S.A became the first American organization to trade under the FLO label. Transfair would eventually become Fairtrade U.S.A in 2010.
What is Fair Trade?
Fair trade’s mission is that consumers and employers pay fair compensation to the people producing the goods or commodities. As it stands, many of those that play a critical role in producing the goods Western consumers depend on receive only a fraction of what consumers pay in stores. The bulk of the income from products is going to transporters, wholesalers and retailers.
In early years, fair trade focused on a handful of products where the movement knew market exploitation was rife such as in the case of coffee beans, cocoa and bananas. The growth of the movement has led to fair trade options becoming available in products as diverse as flowers, wall décor and undergarments. Clothing has become a particular focus of the global fair trade movement, as growing awareness of sweatshop working conditions has raised concern among Western consumers.
Although different fair trade organizations adhere to different standards, most guarantee producers a minimum sale price and utilize a cooperative business model to ensure that profits are directed back into the community. Increasingly, fair trade has moved beyond purely economic considerations to include social and environmental concerns within the same framework.
Impact of Fair Trade
Given the extent and variety of its manifestations around the world, the direct impact of the fair trade movement is difficult to measure. A 2014 research paper gained notoriety for supposedly showing that fair trade does not benefit workers economically. But others have pointed out certain limitations of that particular study that were left out of the headlines.
Fairtrade commissions regular reports by an independent organization, the Overseas Development Institution, to evaluate its progress and effectiveness. A 2017 impact report states that Fairtrade’s minimum price policy ensures “certified producers . . . clearly benefit from higher prices” when market prices are low. While the report states the benefits are less clear when markets are high, it is important to remember the minimum price is a minimum rather than a set price. Also, the consistency and stability offered by the minimum price to producers during low market ebbs should not be underplayed.
Fair trade is also about ensuring that employers treat workers well and that employees can conduct work in safe, clean environments. Certified fair trade organizations invariably uphold standards to ensure compliance with this. For instance, Nest, a fair trade organization specifically geared toward improving conditions for artisans, has policies governing hours of work, enforcing grievance procedures and rights for collective bargaining and ensuring workers are permitted time off.
One impact of the fair trade movement that draws less attention is the role it has played in generating consumer awareness of the consequences of their purchasing habits. A 2014 study by the Fairtrade Foundation, notes how people who have grown up in the fair trade era—referred to as “generation fairtrade”— are distinctly concerned with the ethical practices of businesses they interact with as consumers. Among other findings, the U.K. study found that 97 percent of those surveyed could recall recently identifying fair trade products in stores.
More than anything else, if the population wants to live in a world where fair trade is the global standard, it must have conscious consumers willing to shape the world through their purchasing habits. If there remains room for improvement in current fair trade models, all the signs are pointing in the right direction for a generation of conscientious consumers.
– Jamie Wiggan