Fair Trade

What is Fair Trade?

Fair Trade is “a trading partnership based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South.” Fair Trade is the alternative mode of trade, which aims to extend sustainable livelihood to the less privileged people living in developing and under developed countries.


Those who practice fair trade comply with the ‘Ten principles of Fair Trade’ while involving in production, trade or any other activities related to income generation. The standards are set to give a fair deal to artisans, farmers and producers who are remaining marginalized from the mainstream of domestic as well as international trade. The compliance of the standards leads towards realization of fair price for their products in international as well as domestic market.

What are the ‘Ten principles of Fair Trade’?

World Fair Trade organisation (WFTO) prescribes the following ‘Ten Principles of Fair Trade’:

  • 1 : Creating Opportunities for Economically Disadvantaged Producers.
  • 2 : Transparency and Accountability.
  • : Fair Trading Practices.
  • 4 : Payment of a Fair Price.
  • 5 : Ensuring no Child Labour and Forced Labour.
  • 6 : Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association.
  • 7 : Ensuring Good Working Conditions.
  • 8 : Providing Capacity Building.
  • 9 : Promoting Fair Trade.
  • 10 : Respect for the Environment.

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What is the History of Fair Trade?

Fair trade has its roots in the efforts of church organizations helping to rebuild European communities after WWII. These faith-based initiatives sold handicrafts produced in rebuilding communities in Europe to create economic opportunities for the artisans and to raise awareness about their plight among consumers who purchased them. Later iterations of this model were “world stores” at which consumers could buy ethically produced items. Fair trade certification programs were introduced to improve on the world store model. Certifications allowed these ethically produced items to have greater reach. By labeling the product and not the retailer, these items could be sold in mainstream retail operations and reach a larger audience.

The term “fair trade” was first used by the United Nations soon after World War II. It was coined to describe a form of equitable trade relationships between developing and developed nations that took into account developing nations comparative disadvantage.

To quote one author, fair trade “in its earliest incarnation was opposed in principle to the deregulation embraced by later neoliberal policies.”
Seen in this light, contemporary fair trade standards are a limited, voluntary attempt to replace some of the national regulatory tools that countries had formerly used to protect their workers and industries. These regulations were forcibly dismantled by trade agreements such as NAFTA, and through agreements with institutions like the International Monetary Fund (IMF), World Trade Organization (WTO), and the World Bank.

The most famous and successful of the early fair trade certifications was the Max Havelaar standard, started in 1988. The dominant certification and labeling organization in the world is the Fairtrade Labeling Organization (FLO) headquartered in Bonn, Germany, having 24 member operations in various countries. The US affiliate has recently changed its name from TransFair to Fair Trade USA, and is based in Oakland, California. FLO started by certifying coffee, then tea and chocolate, still the dominant commodities that are certified. However there is now an extensive list of commodities that are certified including cotton, wine, rice, flowers, honey, cocoa, sugar and many more. They are considering a move to certifying crafts, and to some extent have started with soccer balls and cotton. FLO certifies through its FLOCERT subsidiary the commodity product itself and its supply chain.

Fair Trade organizations have a clear commitment to Fair Trade as the core principal of their mission. They are backed by consumers engaged actively in supporting producers through sustainable consumption, in awareness raising and campaigning for changes in the rules and practice of conventional international trade. They are recognised globally by World Fair Trade Organisation (WFTO) and regionally through various regional and national networks. The World Fair Trade Organization (WFTO, formerly known as IFAT) has been investing in a craft certification, monitoring and labeling scheme now called the WFTO Fair Trade System. At their conference in Mombasa, Kenya in May 2011, it was decided to explore the possibility of using the WFTO membership and monitoring system as a way of certifying compliance with FT Principles.

The national networks, like Fair Trade Forum-India help in the promotion of Fair Trade in the domestic market and advocate and lobby for the rights of the producers with Government and other important state actors. Fair Trade is more than just trading: it proves that greater justice in world trade is possible. It highlights the need for change in the rules and practice of conventional trade and shows how a successful business can also put people first.

Reference: http://gogreenplus.org/green-sustainable-business-tips-resources-ideas/fair-trade/

Why choose a ‘Fair Trade’ product?

If you care about people and the planet, it makes sense!

Fair Trade organizations work with artisans and producers to determine a fair price for their craft or commodity that will allow them to exceed their cost of production and be able to improve their lives through more nutritious food, better education, and access to healthcare.

Fair Trade organisations re-invest in their communities by running development projects for their growth and development like education, vocational trainings, access to health care, public provisioning, micro-finance and providing capacity building trainings. As a consumer you will find some of the handcrafted highest quality and unique goods in the Fair Trade market. Fair Trade works through the supply chain to provide the best prices to kits customers.

Fair trade benefits workers and communities by spreading profits more equitably and stimulating the local economy. Many Fair Trade members work directly with producers to develop products based on a sustainable use of their natural resources. This gives the communities a reason to preserve and maintain their environment.

Many Fair Trade organizations provide financial assistance to producers through loans or by supplying prepayments so producers can cover the costs of raw materials. Production and development of products based on cultural traditions is encouraged.

What are the benefits of Fair Trade in India?

The intent of Fair Trade is overall development of the marginalized through the medium of trade. Fair trade addresses the unjust and biased world order as well as the trade, which is routed by profit motives, which seldom takes the development concerns of the majority of the world’s population, into account who are socially and economically backward. Fair trade places development before profits. It clubs campaigns, protests and alternative sustainable options of income generation in the best possible way.

For Fair Trade, the social responsibility of uplifting the marginalized comes as the prime objective where as in the mainstream, the present efforts to ensure ‘social responsibility’ most often turns out to be cosmetic exercises which confers them the social license to go on with its profit lead/ oriented initiatives. Making the present conventional stream of trade fair is not possible till it makes the development of the excluded section of the world, as its major objective. It is a paradigm shift from the very concept of conventional trade and business.

The Fair Trade organisations working with producers at grassroots level in India are also responding to the needs of social empowerment of the marginalized communities with the additional support of Fair Trade partners, philanthropists, development organisations and corporate sector.

Fair Trade is a blend of social and economic components of activities aimed at the overall of development of the marginalized is to be realized in order to have a sustainable impact on the lives of the neediest among the marginalized of the world. Fair trade from its origin strives for that.

Now in the present economic environment, where the world trade is controlled with the best efficient mechanism towards furthering the position of the organized, the fair trade is trusted with more and more responsibilities in protecting the interest of the marginalized sections of the developing world. But the world FT community with its collective efforts could take up a host of issues, which ultimately has brought in positive outcome towards ensuring justice to the potential beneficiaries.

How is Fair Trade ensuring development of the marginalized?

Fair trade is a strategy for poverty alleviation and sustainable development. Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.

In India, the producers or stakeholders in Fair Trade are from different stratus and backgrounds like:

  • Women.
  • Cured leprosy patients.
  • Victims of natural & industrial disasters.
  • Slum dwellers.
  • Displaced tribal communities.
  • Sufferers of religious conservatism.
  • Minorities, seasonal labourers.
  • Indigenous people.
  • Landless people.
  • Differently able persons.
  • Refugees.
  • Small and marginal farmers.

The Fair Trade organisations working with producers at grassroots level in India are also responding to the needs of social empowerment of the marginalised communities with the additional support of Fair Trade partners, philanthropists, and aware corporate sector and development organisations.

The major four areas through which Fair Trade is delivering the responsibilities related to social empowerment are education, health, capacity building and the women empowerment. Fair Trade Forum – India, as the National network facilitate the process of social empowerment by connecting them with the opportunities and organisations to get support in the form of knowledge, equipments and financial resources.

“Creating Opportunities” does not simply mean   ‘giving a person living in poverty a job’. Rather, achieving this principle involves working collaboratively with marginalised producers to develop opportunities which enable them to move out of poverty permanently, and to ensure the legacy of their art and craft. Many of the Fair Trade (FT) organisations in India are also supporting marginalised women to earn a fair and sustainable livelihood through the development of craft and entrepreneurial skills, leading to production and sales of their products. There are various programs done by FT organisations which enable self-sufficiency, security and ownership for the women producers, like social empowerment program, which addresses topics such as gender and Human Rights, leadership training, and education, savings and loan scheme through which women can save and access micro-credit loans, to start their own small business, improve their living circumstances or send their children to school.  More and more innovative and useful workshops and trainings are being held for the producers and artisans helping them in refining their skills, to make better efficient products. If the products are good, then the market for them will also grow; in turn maintain constant work availability for the artisans.

FT fraternity collaborates with other development organizations, NGOs and governments towards preparing the background for socially responsible income generation activities to flourish. Simultaneously, the economic activities at the micro levels along with related forward and backward linkage exercises also forms important part of FT activities. In short, a blend of social and economic components of activities aimed at the overall of development of the marginalized is to be realized in order to have a sustainable impact on the lives of the neediest among the marginalized of the world. Fair trade from its origin strives for that.

The future of Fair Trade, in regard to creating opportunities for the producers and to ensure regular work availability is bright and propitious. In India, several organisations and companies, who are working with producers and artisans in the handicrafts sector, are coming forward to join the Fair Trade movement. This will ensure that the poor and the marginalised are undertaken to work as per the Fair Trade standards, which amounts to holistic and sustainable development of the producers and artisans. This will help in ensuring constant work availability, constant efforts towards creating market for their products and safeguard their traditional knowledge and crafts.

Fair Trade fraternity believes that a continuous effort is to be there to sustain the resistance against the exploitative way in which the world trade is being used today. The fact that 80 per cent of the world’s resources are consumed by the richest 20 per cent of the world’s population is frightening. And trade should not be a supportive mechanism for this unrestricted exploitation. So, those who believe in just and fair distribution of world’s resources cannot come in terms with the main stream of trade. Hence fair trade as an alternative stream shall inevitably nurture through collective thinking and efforts.

What are the Fair Trade products and services offered by FTF-I?

Majority of our members are producing handicrafts and handloom based products. In the recent years, many of them have graduated themselves to production and marketing of trendy lifestyle products by upgrading the skills of the artisans. Off late many organisations who are into food and other agro based products have also become members of FTF-I. So at present, FTF-I product basket consists of handicrafts, lifestyle products and naturally produced food.

Following is the list of product lines and services provided by FTF-I’s member organisations:

  1. Fashion Jewellery.
  2. Fashion Accessories.
  3. Woodwork, Carvings & Furniture.
  4. Handloom & Hand Embroidery Products.
  5. Stone Crafts.
  6. Sustainable Cotton.
  7. Garments.
  8. Crafts made of recycled material.
  9. Basketry.
  10. Art Metalware.
  11. Incense & Candles.
  12. Festive Craft Articles.
  13. Toys and Dolls.
  14. Glassware.
  15. Fur, Feather and Leather products.
  16. Carpets.
  17. Ethnic Crafts.
  18. Paper Crafts.
  19. Natural Fibre Products.
  20. Musical Instruments.
  21. Natural Cosmetics.
  22. Organic Pulses, Fruits & Vegetables.
  23. Organically Processed Food Products.
  24. Honey.
  25. Spices & Other Food Products.
  26. Fair Tourism.