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What Is Fair Trade? Why Is It Important?

Updated: May 5, 2021

Fair trade is increasingly popular for imported goods. You may see coffee in your gourmet food store with a "fair trade" label. You may see textiles and crafts for sale on the web advertised as being "fair trade" products. But what is it exactly? Fair trade is an approach to marketing that incorporates environmentally sustainable development and humane wages and working conditions. It is based on the twin principles that the producer of a product should receive a living wage for his or her work and that commerce should be done with the intent of maintaining environmental conditions for future generations. Those goals are accomplished by working directly with small businesses, cooperatives and community-based organizations, thereby cutting out layers of middlemen. As a consequence of the elimination of middlemen, the retail prices for fair trade items are comparable to products that are not fair trade.

In determining a living wage, consideration is given to the locality in which the products are made. If the local country has a minimum wage law, the wages for fair trade products will at least match it. Sometimes, however, a legal minimum wage is less than a living wage. Where that is the case, the fair trade producer will receive at least a living wage. Fair trade workers are organized into cooperatives or other participatory workplaces. That way, each worker can have a say in local issues, such as working hours and safe and dignified working conditions. The cooperatives often take initiatives with respect to other worker benefits, such as health care, child care and education. Some cooperatives can provide loans and other assistance to workers as they set up their own small businesses. Fair trade cooperatives will often work to improve conditions in the community. Up to 70% the workers empowered and assisted by fair trade cooperatives are women who are often mothers and the sole wage earners for their families.

A living wage and decent working conditions are one of the two founding principles of the fair trade movement. The other founding principle is environmental sustainability. Fair trade coffee and cocoa cooperatives require their members to use sustainable agricultural methods and to grow organic agricultural products. Raw materials used for textiles and other products are produced using environmentally sustainable methods. Some fair trade cooperatives have sought out producers in geographical regions with rich biodiversity and developed products that use the local resources in a sustainable way.

In addition to a living wage for their producers and an environmentally sustainable approach to commerce, fair trade enterprises also give importance to other social issues. For example, fair trade artisans often use traditional crafts and skills in making their products. Doing so preserves their cultural identity and furthers world-wide cultural diversity. Fair trade cooperatives find it essential to be accountable to the public, so they set up review processes in which accountability and transparency are fundamental. Finally, because the concept of fair trade is dependent upon the ability of consumers to make educated purchases, fair trade cooperatives consider the education of their consumers to be one of their most important responsibilities.

Best of all, fair trade products are excellent products. As important as the economic, environmental and social principals are to your purchase of a fair trade product, the most important reason to buy them is their quality. Fair trade clothing and accessories are beautiful, unique, sometimes exotic. The coffee and cocoa are rich and flavorful. The home décor items are always unusual as well elegant, whimsical and well-made. Try a fair trade product the next time you make a purchase. In addition to ensuring a living wage, sustaining biodiversity and local environmental conditions and assisting an impoverished community to establish health care, child care and education, you will become the owner of some very wonderful stuff!

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