Fair Trade 101
By Julie Urlaub
June 2010
Fair trade is a term used frequently in sustainable living circles but like many "green" words, there tends to be confusion as to its meaning. Fair trade is a sustainability concept and is an alternative way of doing business - one that builds equitable, long-term partnerships between consumers in North America and producers in developing regions.
The word “fair” can mean a lot of different things to different people and there are myths about what fair trade really is. Fair Trade is about more than just paying a fair wage. It is also not charity. It 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.
Components of Fair Trade include:
• Fair wage.
• Fair working conditions.
• Open information exchanges between producers, consumers, and companies.
• Long-term trade relationships between corporations and producers.
• Practices that promote environmental protection and sustainable practices.
• Elimination of unnecessary middlemen between producers and consumers.
• Providing financial and technical assistance to producers whenever possible.
• Providing equal opportunities for advancement all people.
• Being open to public accountability.
• Ensuring the rights of children.
• Cultivating environmental stewardship.
• Respecting cultural identity.
As expressed in our sustainability consulting, fair trade is a sustainable business model that has multiple environmental and social impacts:
• Fair trade has a positive effect on the environment.
• It benefits farmers, farm lands, and the workers in developing countries.
• Provides consumers with options to purchase ethically sound and higher integrity products.
• Positive impact on communities: Children’s school fees are paid; nutritional needs met; health care costs are covered; the poor, especially women, are empowered; the environmental impact of production, sourcing, and transport is mitigated to the fullest extent possible. Such an impact is created, because fair trade approaches development as a holistic process.
With increasing eco awareness there are more opportunities for consumers to leverage purchasing power to support credible and sustainable businesses.
For more information on fair trade or where to find fair trade products in your area see Transfair, GreenAmerica and the Fair Trade Federation.
Julie Urlaub is the founder and managing partner of Taiga Company, a Houston based sustainability consulting firm. Read more blog post connect on Twitter, Facebook, and LinkedIn.