Fair trade movement

Fair trade is a global movement that aims to pay reasonable prices for goods in international trade, especially with respect to producers in developing countries. According to the International Fair Trade Charter, fair trade is a trading partnership that is based on dialogue, transparency, and respect. The charter also states that it seeks greater equity in international trade and contributes to sustainable development. The fair trade movement includes the creation of fair trade organizations, marketing organizations, national fair trade networks, fair trade support organizations, fair trade towns, and fair trade importers, researchers, volunteers, and places of worship. Fair trade is advocated by consumers who buy fair trade products that support producers and workers. At the heart of the movement is a desire to use trade structures and practices to enable all individuals to maintain a decent and dignified livelihood.

Several fair trade organizations exist across the globe. Fairtrade International works through standards, certification, producer support, programs, and advocacy. The organization works with producer networks in Latin America/Caribbean, Africa/Middle East, and Asia Pacific regions, representing 1.7 million farmers and workers in seventy-five countries. Another group, the World Fair Trade Organization, also works across seventy-five countries. To become a member, a company must demonstrate that it puts people and the planet first. The International Fair Trade Towns network is made up of two thousand towns that are committed to promoting and supporting fair trade in their communities.

Background

The modern concept of fair trade began in the late 1940s and 1950s following World War II, but the idea of fair trade had deep roots in European societies long before that. For example, in eighteenth-century England, farmers were not allowed to manipulate their prices by withholding products and awaiting price increases. In 1827, Philadelphia saw the creation of the “Free Produce Society,” an organization that boycotted goods that were sourced from enslaved labor to fight against enslavement. In 1830, African Americans created the “Colored Free Produce Society,” and women created their own branch of the society a year later. In 1838, the American Free Produce Association was formed. This association sought to find non-enslaved alternatives to products and also published pamphlets and a journal to educate and inform. The organization saw little success, however, and disbanded in 1847. Quakers in Philadelphia continued with the movement until 1856.

Modern free trade is largely cited as beginning in the United States with a company called Ten Thousand Villages (formerly known as Self Help Crafts), which was led by Edna Ruth Byler, an American businesswoman who was moved by the female artisans she had encountered in her travels. She began purchasing needlework from Puerto Rico in 1946 and sold these goods to friends and neighbors to help these women make a living.

As fair trade started to emerge, it was largely led by religious groups and political non-governmental organizations. In 1946, the Mennonite Central Committee (MCC) began to develop fair trade supply chains. SERRV International began to trade with poor communities in the Southern Hemisphere (frequently referred to as the “South” and sometimes as the “Third World”) in the late 1940s, and developed its own fair trade supply chain by 1949. Fair trade goods during this period were mostly stitch work sold by volunteers in places known as “charity stores” or “ethnic shops.” The first formal fair trade shop opened in 1958 in the United States.

Although Americans had begun adopting fair trade concepts in the 1940s and 1950s, the modern fair trade movement largely began in Europe in the 1960s. At this time, the movement was largely politically motivated and was a statement against neo-imperialism, or modern imperialistic practices that involve powerful countries dominating smaller countries. Student movements targeted large international corporations, and people began to question traditional business models. A number of organizations emerged including The Fair Trade Organisation in 1964 and Fair Trade Original in 1967. Also in the late 1960s, Dutch organizations began to sell cane sugar with the message, “by buying cane sugar you give people in poor countries a place in the sun of prosperity.” The slogan “Trade Not Aid” emerged in 1968 when it was used by the United Nations Conference on Trade and Development with the goal of establishing fair trade relations with developing nations. In 1969, the first “Third World Shop” opened. World Shops or Fair Trade Shops have since played a central role in the fair trade movement, acting as points of sales and awareness raising centers.

In the 1960s and 1970s, the fair trade movement continued to flourish, spreading to the Southern Hemisphere because of non-governmental organizations and individuals in Asia, Africa, and Latin America. Fair trade organizations were established in these regions and linked with organizations in the North. The goal of these organizations was to promote greater equity in international trade. In 1973, Netherlands-based Fair Trade Original imported the first fair trade coffee from Guatemalan farmers organized in cooperatives.

Fair trade organizations around the world began convening every few years by the mid-1970s. By the mid-1980s a number of larger organizations were established including the European Fair Trade Association, which included eleven of the largest importing fair trade organizations in Europe. The first European World Shops conference took place in 1994 and began to set a standard of cooperation between volunteers working in World Shops across Europe. Additional fair trade organizations were founded in the late 1980s including Fair Trade USA in 1988, the World Fair Trade Organization in 1989, and the Fair Trade Federation in 1990.

Fair trade certification began appearing in 1988 with the introduction of the “Max Havelaar” coffee label in the Netherlands. Within a year, coffee with that label had a market share of almost 3 percent. Since then, fair trade labeling and certification has expanded to include more products. In 1997, Fairtrade Labelling International (FLO, now called Fairtrade International) was created. FLOCERT, founded in 2003, is an independent certification and verification organization that uses fair trade standards. Products that meet these standards receive the Fair Trade label, also known as the FTO Mark. Today, different types of products from across the world have received this label including bananas, cane sugar, flowers, plants, dried vegetables, fruit juice, textiles, coffee, honey, and sports balls. FLOCERT works with a network of 1.9 million small farmers and workers in developing countries.

Impact

According to COOP Coffees, a green coffee importing cooperative, fair trade sales have soared in the 2000s. The increase has been particularly evident in the sale of fair trade labeled goods. Fair trade products are sold in world shops, fair trade shops, online, and in supermarkets in the North. Product sales have even expanded into sales points in the South. According to the Fairtrade Foundation, 1.9 million farmers and workers are part of fair trade certified producer organizations. Of that, 17 percent of farmers and 41 percent of workers are women. Fair trade sees the most female participation as part of hired labor organizations in the African and the Middle Eastern (40 percent) and Asian and the Pacific (54 percent) regions. Women in small-scale producer organizations are most involved with oilseeds and oleaginous fruit (plant foods that extract oil like almonds, hazelnuts, pine nuts, pistachios, olives), wine grapes, tea, rice, vegetables, herbs, herbal teas and spices, cane sugar, dried fruit, and bananas. Women who are part of hired labor organizations are most involved with vegetables, dried fruit, tea, flowers, and plants and pulp.

As of 2022, 1,822 fair trade certified producer organizations existed in 72 countries. In 2015 there were 1,389,044 farmers in fair trade, but in 2019, that number increased to 1,716,245. However, the number of workers fell during the same time from 195,701 to 174,136. The growth of fair trade farmers and workers varied by region from 2017 to 2019. In Latin America and the Caribbean, it dropped by 2 percent and 1.6 percent in Asia and the Pacific. However, Africa and the Middle East grew by 10 percent, making the total worldwide increase to be 6 percent during that time.

Forty-six percent of fair trade farmers produce coffee while 39 percent produce flowers, but fair trade encompasses many other products as well. According to Fairtrade International, 20 percent of farmers and workers produce tea with 22 percent producing cocoa. Other traded items include cane sugar, seed cotton, bananas, and other products.

As of 2019, Latin America and the Caribbean had the most producer organizations with 906 in 23 countries. Peru leads the way with 258 producer organizations, while Colombia has 151, Mexico has 72, the Dominican Republic has 68, Honduras has 64, and Brazil has 55. The African and Middle Eastern region has 634 producer organizations in 28 countries—with the Ivory Coast leading with 264 producer organizations while Kenya has 104. In Asia and the Pacific, 282 producer organizations were in 21. India is home to 109 of these.

Bananas are the most represented fair trade product with 1,236,127 metric tonnes certified annually. Next is coffee at 824,404 metric tonnes, and cocoa at 618,633. Other major players are cane sugar (528,672 metric tonnes), fresh fruit (485,497 metric tonnes), tea (183,630 metric tonnes) and wine grapes (168,312 metric tonnes). Also on the list are rice, seed cotton, herbs, herbal teas, spices, oil seeds, oleaginous fruit, nuts, vegetables, cereals, honey, dried fruit, flowers, plants, and sports balls. Flowers and plants are measured by stem, and nearly five billion were certified in 2019. Nearly four million sports balls were certified that year as well. Some items rose in the volume sold between 2017 and 2019, while others dropped. For instance, fruit juices went from 20,372 in sales in 2017 to just 3,378 in 2019. Meanwhile, oilseeds and oleaginous fruit boomed during that time, going from 6,404 to 16,886.

According to a 2021 study by Fairtrade International, climate change poses serious threats to agricultural production and will affect many fair trade certified farmers in the future. Fairtrade International commissioned the study to understand the impact of climate change on producers of fair trade certified crops like bananas, cocoa, and sugar cane. The study found that climate change and its consequences such as extreme temperatures, extended droughts, and more severe weather will affect the production of some of these crops. Fairtrade America said it is working to help its farmers and other stakeholders become more resilient to climate change. The organization also said it has recently strengthened standards requirements to give more focus to environmental issues and climate change.

Today, those involved in the fair trade movement engage with politicians and decision makers to make international trade fairer. According to the World Fair Trade Organization, the fair trade community has also pushed mainstream businesses to become more aware of their social and environmental responsibilities. For instance, Ben & Jerry’s was the first ice cream company to join the movement. According to The Borgen Project, Ben & Jerry’s set an example for other companies to follow. The fair trade movement has also encouraged consumers to think about their purchasing decisions. For example, a 2019 study stated that 59 percent of American shoppers said they would be more likely to buy fresh produce with a fair trade label.

A number of fair trade organizations also have reported their impact on communities and people. According to Fairtrade International, farmers and workers taking part in fair trade programs across the globe were paid 203.8 million pounds, or about 229 million American dollars, in fair trade premiums in 2021. On average, each fair trade producer organization received more than 111,000 pounds, or nearly than 125,000 American dollars, in fair trade premiums in that year. Workers on fair trade certified plantations invested 26 percent of their fair trade premiums in education services for workers and their families. Likewise, small-scale producer organizations invested 46 percent of their premium into items such as farm tools and payments to their members.

According to The Borgen Project, fair trade encourages the building of sustainable businesses by demanding fair wages and treatment along with living wages. It also protects workers from unsafe working conditions and prevents forced child labor. The fair trade model also helps support education because it stabilizes incomes for families, allowing them to put their children into school.

Many organizations said that farmers involved in fair trade programs are encouraged to learn and use more environmentally sustainable practices. For example, fair trade and organic standards have resulted in the switch to less toxic pesticides, according to the Fairtrade Foundation, which has a positive impact on both environmental and worker health. The organization added that fair trade standards cover environmental protection, including energy and greenhouse gas emission reduction, soil and water quality, pest management, protection of biodiversity, banning of genetically modified organisms and harmful chemicals, and waste management. The standards also promote the use of nutrient-rich soils that support healthy plants and encourage wildlife to help with pest and disease control.

According to the Fairtrade Foundation, fair trade is gradually empowering communities to organize into cooperatives. This improves their negotiating powers within the supply chain and enables them to negotiate higher prices for their products. Fair trade premiums can also be invested in community bettering initiatives like education, housing and schools, and medical facilities.

Although proponents of fair trade claim that buying certified products helps disadvantaged people in the South, a 2014 study challenged this idea, saying fair trade agricultural workers often earned lower incomes. The study compared living standards in fair trade certified producing areas in Ethiopia and Uganda with similar non-fair trade regions. Over the four years of fieldwork conducted, researchers gathered 1,700 survey responses and conducted more than one hundred interviews. The researchers found that workers in non-fair trade certified communities received higher wages and better conditions. They found that women’s wages were especially low among fair trade producers. The Fairtrade Foundation responded to the study, saying that while it used innovative methods and a large sample size, it did not seek to evaluate the impact of fair trade’s model and interventions.

A 2019 study found that while fair trade improves wages and reduces poverty among cooperative workers, but not among farmers. Researchers surveyed cocoa workers in Africa’s Ivory Coast and their employers to distinguish trends between farm workers and cooperative workers. The study states that labor standards are regularly monitored by fair trade at the cooperative level, and certification helps cooperatives increase services and pay for workers. However, at the farm level, inspections are costly and rare, so fair trade hardly affects wage workers on small farms. Fairtrade Germany and Fairtrade Australia commissioned a 2022 study that came to a similar conclusion. It studied cocoa in Ghana, and coffee and bananas in Peru. The study showed that fair trade contributed to stronger cooperatives and more sustainable farming households but fell short on gains for farmers. The organization pointed to climate change, the COVID-19 pandemic, and low farm prices as the culprits. It also outlined a plan to address this issue that included offering COVID-19 relief funds to farmers.

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