Fair Trade : How it works and who it benefits

By fairtrade.ca


What Fairtrade does

Fairtrade is about better prices, decent working conditions and fair terms of trade for farmers and workers.

It’s about supporting the development of thriving farmer and worker communities that have more control over their futures and protecting the environment in which they live and work.

And it’s your opportunity to connect with the people who grow the produce and make the products that we all depend on.

What the FAIRTRADE Mark means

fairtrade logoWhen you buy products with the FAIRTRADE Mark, you support farmers and workers as they work to improve their lives and their communities. The Mark means that the Fairtrade ingredients in the product have been produced by small-scale farmer organizations or plantations that meet Fairtrade social, economic and environmental standards. The standards include protection of workers’ rights and the environment, payment of the Fairtrade Minimum Price and an additional Fairtrade Premium to invest in business or community projects.

Fairtrade works to benefit small-scale farmers and workers, who are amongst the most marginalized groups globally, through trade rather than aid to enable them to maintain their livelihoods and reach their potential.

For certain products, such as coffee, cocoa, cotton and rice, Fairtrade only certifies small-scale farmer organizations. Working through democratic organizations of small-scale farmers, Fairtrade offers rural families the stability of income which enables them to plan for the future.

For some products such as bananas, tea and flowers, Fairtrade also certifies plantations - companies that employ large numbers of workers on estates. Our Standards for such large-scale production units differ and protect workers’ basic rights; from keeping them safe and healthy, allowing them freedom of association and collective bargaining, to preventing discrimination and ensuring no bonded or illegal child labor. They also require employers to pay wages that progress towards living wage benchmarks. Ensuring decent working conditions and strong worker rights is central to Fairtrade’s work.

The producers themselves decide how the Fairtrade Premium should be invested. The Premium is the additional sum of money paid on top of the Fairtrade Minimum Price that farmers and workers receive which can be invested in social, environmental and economic developmental projects to improve their businesses and their communities. In real terms, it means investment in schools, transport, health care, sanitation, an improved environment and better business equipment and practices.

What makes Fairtrade unique

Fairtrade supports farmers and workers in gaining more from trade and through this they are empowered to control their lives. It is an alternative approach that is based on partnership; one between those who grow our food and those who consume it.

Fairtrade is 50% owned by producers

Fairtrade works with a range of stakeholders but our global system is the only one that is 50% owned by producers representing farmer and worker organizations. With an equal voice, producers have a say in decision-making within our General Assembly and on Fairtrade’s  Board of Directors including International and Canada. Through the Board and its committees, they are involved in decisions on overall strategy, use of resources and setting prices, premiums and standards.

Fairtrade Minimum Price

For most Fairtrade goods, there is a Fairtrade Minimum Price which is set to cover the cost of sustainable production for that product in that region. If the market price for that product is higher than our Minimum Price, then producers should receive the market price. Payment of the Minimum Price is regularly audited and checked by FLOCERT. This acts as a vital safety net for farmers and workers and protects them from fluctuations in the market prices of the products they grow for a living. This protection ensures they can have an assured and stable income and plan for their future. Fairtrade is the only certification scheme that offers such a unique Minimum Price protection for farmers.

Fairtrade Premium

Over and above the Fairtrade Minimum Price, the Fairtrade Premium is an additional sum of money which goes into a communal fund for workers and farmers to use – as they see fit - to improve their social, economic and environmental conditions. Producers determine what is most important to them; whether this is education or health care for their children, improving their business or building vital infrastructure such as roads and bridges for their community.

The impact of our work

Fairtrade supports small scale farmers and workers who are marginalized from trade in a variety of ways. 

As a certification scheme, our Fairtrade Standards provide one of our primary and also most visible tools for empowering small farmer and worker organizations. But beyond the standards and certification, the Fairtrade system also provides direct and indirect support to producers and their organizations to deepen social and environmental sustainability.

Fairtrade as a certification is much more than merely an environmental certification, it is the only and best ethical and social certification that really ensures social and environmental, ethical and economic impact, and therefore human impact.