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Fair Trade

What is fair trade?

1. What are the main features fair trade?  

● Solidarity: Working with the most marginalized producers in an inclusive and sustainable manner;

● Direct:
Buying as directly as possible to maximize the margin of the producer and minimize the margin of intermediaries;


● Fair:
Guaranteeing a fair purchase price, which covers the cost of production and allow the producer to live a decent life;


● Qualitative:
Seeking to enhance know-how and the traditional use of natural ingredients (traditional and organic farming is strongly encouraged);


● Transparency:
This applies to the producer as well as to the consumer; giving all possible information on the product and supply chain.


● Fair:
Paying a fair price which covers the cost of production, plus a development premium, which producers themselves can decide how to use for development projects in their organization and their community.

For example:

$1.25 per pound of coffee arabica washed in minimum price
+$0.10 per pound of premium coffe development
=$1.35 per pound of coffee minimum
+$0.20 per pound for organic coffee with organic premium
=$1.55 a pound for washed arabica coffee bio 

(According to FLO standards)

2. What are the rules of fair trade?

The fair trade rules are established by the international Fair Trade organizations such as WFTO (the World Fair Trade Organization) and FLO (Fair Trade Labeling Organizations), and level French by the CTB (French Platform for Fair Trade), which bring together organizations that import or sell products from the South. From experience gained over 20 years, they offer a definition of fair trade which is beyond the scope of conventional North-South trade.

An observation:

Trade is the exchange activity of goods and services between people. This activity is essential for any society. But the present organization of trade:

✓ Is often unbeknownst to the producer and consumer: the producer does not know the destination of its product, the consumer is unaware of the actual source

✓ Is at the expense of the producer and consumer: the power is concentrated in the intermediries - big brand sponsors, industry groups, financial institutions, major retailers, purchasing groups - who impose their rules, their prices, even their products to producers and consumers.

✓ Often becomes an issue of power and private profit-related short-term speculation.

✓ Is unfair; this form of trade trivializes a relationship into dominating/dominated; it is not business as such that is a problem, but the way it is used as an economic weapon.

✓ Entails moving margins downstream (producers see their margins eroded under pressure from manufacturers and distributors), impoverishing producers in economic terms, in organizing their work and in meeting their basic needs and those of their families

✓ Is responsible for the deteriorating terms of trade (while the prices of raw materials decrease systematically on the world market, prices for finished goods that countries producing these raw materials imported from industrialized countries, increases - exacerbating the gap between the rich and poor

✓ Leads farmers to cultivate their crops in often inhumane working conditions, and even in slavery: the consequences are unfortunate for them and for the environment (social, economic, ecological, cultural).

This reality is true in all trade, both local and international. Faced with this situation, the goal is to enable producers and consumers to live in dignity and autonomy and enable them to find the meaning in their actions and to control their own destiny.

Structural changes are needed in the practice of modern commerce. Fair trade creates the conditions required to achieve this goal.

Indeed, fair trade organizes exchanges around binding commitments. These can be checked at any time. There is also a commitment to continuous improvement in the whole process.

The binding commitments:

● Working in a spirit of solidarity, first with the producers of the most disadvantaged in the context of sustainable development.

● Reject any form of slavery or forced labor, including child labor without school support or educational.

● Contracts between various partners of these guarantees on:

✓ product prices to a fair remuneration for economic actors

✓ product quality

✓ the payment of a deposit when the producer organizations have no working capital needed delivery time.

● Focus on sustainable business relationships with producers

● Ensure transparency in the functioning of the various partners on working conditions, wages, duration of relationships, processes of production and distribution, prices and margins.

● Accept control over the observance of these principles at every steps of the process.

The criteria of progress

● Establish a participatory organization thet respects freedom of expression and opinion of each participant. Respect everyone, without discrimination.

● Eliminate child labor, taking into account also the specific environment in which they live.

● Empower local resource producers, both in terms of raw materials and know-how.

● Promote production and distributions which uses raw materials and energy sources in a sustainable manner, ensuring their renewal.

● Build the bridge between producers and consumers as short and as simple as possible.

● Encourage producers to become independent, to diversify their customer base, especially within local markets; the economic activity should be profitable in itself and thus completely distinct from other forms of financing.

● Obtain the commitment of actors to develop their socio-economic environment, reinvesting profits in development programs.

● Collect and communicate information to consumers to enable them to make purchase decisions based on full knowledge and accountability, connecting them to the producers, and promoting cultural and social exchanges.


3. How does fair trade work?

● Training of producer's cooperatives in developing countries.

● Establishing methods of organizing group that meet the requirements of the fair trade commitments and promises on the criteria of progress.

● The groups set their own selling prices of each of their products, according to their needs defined by three main headings:

✓ Decent pay of employees or members of the cooperative

✓ Investment in production equipment to ensure sustainable development of economic activity.

✓ Investment in a community project in social (building schools, bridges, wells, etc...). For the sustainable development of the region of origin. Importation of products by buying offices or distributors of fair trade, the most direct route to a better distribution of the margin between producer and distributor.

✓ All orders are prepaid to assist the producer in managing its cash and avoid exorbitant usurious rates, which often result in some economic slavery.

✓ The importer of fair trade products regurlarly places smell orders to promote a stable and sustainable growth of the producer's cooperative and its region. Example: price of coffee not indexed to world prices. The importer of fair trade never buys more than 25% of the total production of the cooperative to not make it dependent

✓ The importer of fair trade verifies that there is no exploitation of child labor or forced labor (slavery) and that working conditions and remuneration are decent. All cooperatives are audited regularly on site to verify that the fair trade criteria are met

✓ In addition to the social audit of cooperatives, importers are contractually committed and united in supporting co-operatives: consulting, managemen control, marketing, new product development, logistics support and trade, etc...

✓ This guidance aims to boost the business relationship with the producer to make the final product offering on the market as competitive as possible and to improve the productivity of the cooperative

✓ Dealers and other fair trade organizations (advocacy groups, labeling organizations, universities, unions, etc...) are in the french Platform for fair trade CTB (http://www.commercequitable.org) and, by extension, in the WFTO ( World Fair Trade Organization). The purpose of this consolidation is to ensure, protect and publicize fair trade to the public in the interests of transparency.

✓ The consumer buys the products and promotes fair trade in his courage!


4. What is the role of the consumers?

In the North, fair trade  allows consumers to use its purchasing power as a vector of human development. Many consumers in Western countries are aware that the world's wealth is very unevenly distributed, and that the products that are available do not allow producers in the South to live decently. They ask to remedy this situation but don't know how to do it. Consumers can help by buying more fair trade products.


5. Can we reconcile pursuit of profit and solidarity within the fair trade?

Yes. With disitermediation it is possible to generate fair trade with the greater profit margins for producers and better prices for consumers. Alter Eco proposes to be the link in providing opportunities for Southern producers to enter the market in Nothern transparently and fairly, and consumers in the North to buy goods for which we guarantee the added value: economic, environmental and social.


6. Is fair trade just a label?

Fair trade is not yet an ISO standard, but the labels with the Fair Trade Labeling Organizations (FLO) such as Max Havelaar and its equivalents in other countries (FAIR TRADE, Trans Fair), ensure the equitable aspect of the product by forming an independent label. The same labels and specifications apply in all countries.

The fair trade movement is broad, sustained by a large number of people and organizations with different profiles; churches, unions, consumer organizations, associations, etc... We believe it has a great future and that eventually, it can change consumption in the north, and working conditions and remuneration in the South.


7. Can fair trade develop to a larger scale?

Yes it can evolve to alarge scale. Because fair trade is not yet well developed (0.2% of world trade), its potential is great. Production capacities are growing faster than the opportunities. Today fair trade supprots about 1,000,000 small farmers plus their families, but there are still many people who could benefit! See also the World Survey.

Fair trade is growing at a larger scale because the growing inequalities between North and South are striking. We believe that a privileged means to standardize and prove the effectiveness of fair trade is to have a very professional approach, quantified with numerical results and a logic of economic and financial balance at all levels.


8. How can the public be educated about fair trade?

The most important thing is to educate people about their responsibility as human beings for the future of the planet and its sustainable development: people can support fair trade simply by buying fair trade products!


9. What can be achieved through fair trade?

As fair trade develops, it should never move its primary objective and become purely a source of profit for companies. Some may use this movement without genuinely supporting the principles of fair trade; hence the necessity for transparency and communication, to ensure maximum compliance with fair trade criteria and ensure the maximum long-term positive impact fro producers.

Another potential risk is that producers in the South become dependent on fair trade, creating an artificial, sheltered market. That is why the slogan of WFTO their products and have several clients in several markets, to minimize the vulnerability of trade. The strengthening of producer organizations is essential to avoid making them dependent on one customer or one market.

As long as companies involved in fair trade genuinely follow the fair trade principles, we feel that a tremendous amount amount can be achieved in terms of moving to a better and more equitable world.


10. What distinguishes conventional trade from fair trade?

The term "equity" is synonymous with natural justice that recognizes equal rights for everyone. Specifically, the main distinction between fair trade and conventional commerce is the desire for greater justice in access to markets and the distribution of value added. Thus, prices of products purchased shall be agreed with the producer and should guarantee him a decent minimum income. Through fair trade, the producer benefits from having access to markets in the North based on a just and lasting partnership with those countries.

In addition, fair trade participants help producers get together, to form a cooperative for example. Thus, they are better organized and informed and are able to better defend their interests in trade negotiations, particularly with trading "classic" partners.


11. How are products and producers chosen?

The products are selected according to the criteria of fair trade in the progress of growing and marketing but also in terms of quality and sales potential in consuming countries. The product should be up to the expectations of consumers and market standards in terms of quality or their should be the possibility and commitment to achieve this is an acceptable time frame.


12. Why must we adhere to fair trade?

Fair trade is an opportunity for a purchase to help improve production conditions and remuneration of producers in the context of sustainable development in both North and South.

Fair trade has a real impact on Southern producers, by providing them with respect and dignity, and contribute to the strengthening of their organizations. For the consumer, it is better to know the origin of products and production conditions and therby reintroduce the meaning in the act of purchase.


13. Why is fair trade a movement that involves everyone?

Everyone can contribute to the development of fair trade: From the activist who denounces the terms of conventional trade, to a person who enjoys a leisurely drink of fair trade coffee during his break. Fair trade is a spirit, everyone can participate at his chosen level, and each action can have its scope and impact.


14. How many producers are involved in fair trade?

Fair trade includes at least 1,400,000 families of farmers or 8 million people in over 50 countries, and also involves an increasing nuber of people who work for fair trade in consumer countries.


15. What are the sales figures in fair trade products?

http://www.fairtrade-jp.org/about_fairtrade/japan/


16. How many fair trade shops are there in Europe and in the world?

At least 70 000 points of sale, 33 000 shops and 50 ordinary supermarket chains (60% of sales generated by the food, half the coffee alone)


17. What are fair trade products?

 Please see the CHOOSEE website, and the producers page


18. What is the level of awareness of fair trade?

Since the early 1960s, fair trade has developed significamtly, especially in Switzerland, the Netherlands, Germany, Belgium and the United Kingdom.

In Japan the level of awareness of fair trade is still very low, but it is growing.

www.fairtrade-jp.org


19. Why fair trade is more developed in some countries than the others?

The Protestant church has greatly contributed to the development of fair trade. This is one reason why Fair Trade is more developed in Switzerland, Belgium, United Kingdom, Germany, particularly through the Association of CCFD (Catholic Committee against Hunger and for Development).


20. What do different governments think about fair trade?

fairtrade-jp.org


21. Is fair trade not a way to impose a western model that could undermine the expertise and culture of traditional producers?

The objective of fair trade is to establish exchanges where producers and buyers are equal, and where skills and expertise of each are recognized. Fair trade is a North-South (and South-South) and a development tool for producers. Producers are participating in the overall operation and the establishment of rules of fair trade.

The producers themselves ask us to find a maximum of opportunities in our markets. Most of the products concerned have been cultivated for centuries, but they are either not known well in western markets, or producers can't afford access to these are able to sell their products at an adequate price and in sufficient quantities.

Fair trade promotes traditional skills along with natural production and organic farming whenever possible. Also it sometimes helps to revive interest in these products in local markets.

In Alter Eco, we aim at maximizing the expertise of producers, by offering unique and high quality products. We help producers to transfer their knowledge to future generations, and to maintain biodiversity as well as the cultural diversity of our planet.


22. Are fair trade products more expensive?

A wide range of prices exist in faitr trade products, as in the conventional market; from minimum standards of fair trade, to highly differentiated products, original and organic products which have more added value.

In the case of Alter Eco, we are stingent regarding the level of safeguards and transparency that we offer you, as well as our level of commitment and return to producers. However, our goal is to make fair trade products accessible and affordable to as many people as possible, so we make every effort possible to ensure that the final price represents good value for money.

We should stress however that our products will never be the cheapset on the shelf because they include certain costs that other companies externalize, such as social impact, environmental, and because we do not put the pressure to reduce prices as normal companies do, e.g. purchases of raw materials, processing costs - especially when it is done in the country of origin. We try to compensate for these costs by saving in other areas (e.g. advertising, etc.).

Alter Eco products therefore have an excellent value: they reflect a fair price for quality, authenticity, transparency, originality and commitment, while remaining affordable.


23. Where to buy?

Please see the CHOOSEE Website and Click here