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What is Fair Trade?

What is Fair Trade?

Fair Trade is a bottom-up, international social movement striving to improve the life and working conditions of small producers of food as well as crafts from Global South. Thanks to this movement living in poverty inhabitants of Asia, Africa, Latin America  can work in decent conditions and build fairer trade relationships with wealthier part of the world.

We recognize Fair Trade a form of development aid, a reply to the failure of modern economic solutions to provide decent income sources and development possibility to people in the poorest  in the world. Fair Trade concept is not based only on trade exchange. It shows that more fairness in global trade is possible. It highlights the need for change in the conventional trade rules and shows how a successful business can still put people first.

Definition of Fair Trade

Definition of Fair Trade formulated in 2001 by FINE – informal platform of collaboration of four umbrella organizations involved in Fair Trade: FLO (now Fairtrade International), IFAT (now World Fair Trade Organization), NEWS (Former Network of European World Shops) , EFTA (European Fair Trade Associations of FT importers).

“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 organizations have a clear commitment to Fair Trade as the principal core of their mission. They, backed by consumers, are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”  Source

How does a Fair Trade function?

All Fair Trade products come from producers following the principles and standards of Fair Trade, which is verified under two schemes:

  • traditional Fair Trade organizations and companies (certified members of WFTO, 100% following the 10 Fair Trade Principles)
  • producers’ organizations (small agricultural workers and other small producers) and companies (plantation or factories, hiring contract workforce), which received a confirmation of following the standards in the production of process of product, which are defined by an independent certifying company (such as FLO CERT, IMO, Naturland Fair, Ecocert Fair Trade, Fair Trade USA).

Fair Trade products in the supply chain are sold and delivered to a market by two separate, but complementary distribution channels:

  • Through traditional way of integrated supply chain, in which Fair Trade products are made, imported and distributed through certified organizations (members of WFTO, EFTA, organizations of World Shops). Their mission and activities are based  100% on the Fair Trade concept. They use Fair Trade as a development tool serving as a support of disadvantaged producers and reduction of poverty, while their trading activities are combined with information campaign. Products enter into specialized shops, as well as conventional retailers, such as commercial chains, healthy nutrition stores;
  • through product certification system, in which the products fulfilling the standards are certified for their easier identification by consumer. They can be distributed by certified organizations (e.g. World Shops), as well as actors of conventional market (companies, supermarkets, etc.). The monitoring of the raw materials flow in the supply chain and ingredients lists is within this framework. Organisations and companies themselves (intermediaries, processors) are not obliged to follow the Fair Trade principles.
  • The common characteristic of these schemes is a confirmation of following the principles, trading criteria and standards by independent organizations.