Fair Trade can be described as a system where producers, mainly small farmers and artisans are connected directly with their buyers.
The Fair Trade Products system is designed in such way that traders and middlemen are not needed, in this system producers have more freedom and control over their own pricing model.
The Fair Trade system allows these producers to get adequate or fair compensation for the products they produce.
Let’s say we have two farmers selling their products in a local market.
Farmer 1 represents free trade production which is dominated by larger corporations.
Farmer 2 participants in a Fair Trade system with items included on the list of Fair Trade products.
The first farmer, as is the case with the majority of farmers, does not have any contact with end buyers. Farmer 1 is forced to sell her products to middlemen representing larger corporations. Farmer 1 is forced to work longer and harder to produce an income because of the low price that is often dictated by middlemen and larger corporations. Despite the fact this farmer works very hard, Farmer 1 is usually very poor and struggles to provide for her family. Farmer 1's quality of life suffers as she has to consistently produce products for a wage that is just barely keeping her business operating.
The second farmer is included in the fair trade system. Farmer 2 sells direct to buyers and is compensated fairly which means her business is sustainable. This farmer will be in a position to work less and earn more which positively impacts the quality of her life, her family and people from her local community. In addition, this farmer will be in a position to focus all of her attention on the quality of her products which is better for everyone including the environment.
This is just one example of fair trade products and how they are produced. Today, almost every product can be included in the fair trade system.
A fair trade item can be any product that is made using humane production conditions that are not connected with the exploitation of the people making it. In addition, these products are usually by local farmers and artisans.
A fair trade item will be labeled with a fair trade certificate making it easy to spot at any market or retail store.
There are many options in todays global market. There are at least five different options for a single type of product in your average supermarket. The fierce competition between major producers creates a business environment that drives down the cost of most products.
More often than not, companies focus on slashing production costs to keep their products less expensive than their competitors. In extreme cases, this race for lower prices leads to abuse and exploitation of workers by paying them wages that are so low that they can’t even afford to feed their families. In the meantime these companies see their profits rise as their cheaper priced products fly off the shelves.
Fortunately, not all producers are infected by this greed. Many of them are taking an active role in the fair trade movement.
You can find more fair trade information on specialized websites and blogs.
Are you looking for information on how a product is certified as fair trade, read our article here: 5 Things You Should Know About Fair Trade Certified Products