What is Fair Trade?

Fair Trade is an ethical partnership between consumers and producers around the world. Food and other products that are purchased via Fair Trade support the farmers and artisans who produce them, their workers and communities, and the environment. Over a million farmers and workers in 58 developing countries—across Africa, Asia, and Latin America—are currently participating in Fair Trade.

Fair Trade benefits farmers and workers and their communities by guaranteeing decent living wages for products—wages that enable producers to support their families and contribute to the betterment of their communities. By eliminating unnecessary middlemen, for example, Fair Trade empowers farmers to deal directly with importers, giving them the tools and the revenue to build their businesses and shed poverty. Communities that participate can invest Fair Trade funds in their own businesses (for training programs and organic certification, for example) as well as needs like healthcare and education. Fair Trade encourages democratic decision-making, transparency and accountability in business relationships, independence, and gender equity. It ensures that people work in safe conditions, without practices that jeopardize their health or well being. As appreciation for their products becomes increasingly apparent, Fair Trade producers develop pride in their work and their communities.

The environment reaps rewards from Fair Trade products as well. Because Fair Trade supports small-scale farmers, it encourages biodiversity. By supporting shade-grown coffee and cocoa, it protects wildlife habitats. And by demanding sustainable farming practices—prohibiting the use of harmful chemicals and GMOs and encouraging soil and water conservation practices—it protects ecosystems and helps reduce global warming. (While not all Fair Trade products are organic, most Fair Trade farmers are interested in organic certification and receive a premium for organic products. Most Fair Trade Certified coffee, tea and chocolate in the U.S. are certified organic and shade-grown.)

Fair Trade supports the production of quality products as well. By encouraging small-scale farming and production techniques, including organic agriculture and hand-made crafts items, cost-cutting practices become less necessary and better quality becomes feasible.

How can I identify Fair Trade products?

The black and white Fair Trade Certified label means that the product itself is certified as Fair Trade. In the U.S., products are given this designation by TransFair USA, a non-profit organization that serves as a third-party certifier. TransFair USA is a member of Fairtrade Labeling Organizations International (FLO), the group in Bonn, Germany, that sets the strict international standards for certification. Fair Trade groups in Japan, Canada, the US and 17 European countries comprise FLO. Annual inspections of farms, facilities and paperwork, and member interviews ensure that stringent Fair Trade requirements continue to be met.

In Europe and Asia, you might see a blue and green FAIRTRADE label. It, too, shows that products have been produced in accordance with FLO standards, certified by a group called National Initiatives (NIs).

A Fair Trade Federation (FTF) label on products does not certify products but shows that the company that produced the product is a member of the FTF. Members of the Fair Trade Federation have demonstrated that their business practices provide fair wages and employment to disadvantaged farmers and artisans. FTF products include food (like coffee and teas), clothing and accessories (like jewelry and purses), body care items, and home and garden items.

How did Fair Trade get started?

In the late 1940s, churches in Europe and North America sold handicrafts in an effort to support the poor communities that produced them. These Alternative Trade Organizations (ATOs) were able to promote fair prices and direct trade between artisans in the developing world and the marketplace. Ten Thousand Villages and SERRV are two examples of ATOs in the U.S. The oldest and largest for-profit Fair Trade company in the U.S., Equal Exchange, was formed in 1986. A worker-owned coop, Equal Exchange sources all of its coffee and cocoa, and some teas, from small farmer cooperatives.

The first Fair Trade certification, called “Max Havelaar” after a Dutch fictional character who fought the exploitation of coffee pickers, occurred in the Netherlands in 1988, when coffee prices plummeted worldwide. (After oil, coffee is the second most heavily traded commodity in the world.) In 1997, Max Havelaar and similar organizations worldwide joined FLO. In 1999, TransFair USA began certifying Fair Trade coffee; it has since certified over 74 million pounds of coffee, totaling over $60 million in income for farming communities.

Since 1986, when Equal Exchange took off, annual Fair Trade food sales have grown from about $100,000 to well over $30,000,000 (wholesale dollars). All along, consumer cooperative members have understood and valued the ethics of Fair Trade, educated others about Fair Trade, and offered and promoted Fair Trade products as they became available. The growing demand is an exciting development in the global marketplace, a perfect example of how businesses and consumers can effect positive change worldwide-environmentally, socially, and economically-by making ethical business and purchasing decisions.

Why not apply Fair Trade practices to farmers and workers at home?

As a matter of fact, domestic Fair Trade is gaining momentum. While Fair Trade has historically related to producers in other parts of the world, farmers and other workers here in the United States and Canada face many of the same challenges as those in impoverished communities globally. With this in mind, in December of 2005, The Domestic Fair Trade Working Group was formed to develop principles for Domestic Fair Trade. These include support for family-scale farming; direct trade (reducing reliance on middlemen, for example); transparent, long-term relationships between traders, producers, and consumers; fair and stable pricing for farmers, and sustainable agriculture. Like international Fair Trade, domestic Fair Trade is a fair, ethical system that protects the environment and benefits rather than exploits the farmers and other producers who provide goods for consumers.

What can I do to support Fair Trade?

  • Purchase Fair Trade Certified foods and other products whenever possible.
  • Request Fair Trade foods at restaurants, bakeries, and stores.
  • Talk with others about the importance of Fair Trade, and give Fair Trade products as gifts.
  • Encourage your community to become involved with Fair Trade. Look into Co-op America’s Fair Trade Alliance pledge for churches, schools, and other community organizations.

To learn more