Terminology
Before reading this page, it would be helpful for you to understand the differences between a few common and similar phrases. Here is a short list with explanations.
Fair Trade: Fair Trade (or fair trade) is a phrase used to describe the action of trading fairly - i.e. paying producers a reasonable price for their goods instead of taking advantage of the vulnerable position many of them are in when it comes to selling their products. This is not the same as Fairtrade.
Fairtrade: Fairtrade (one word) is an official term used to describe fair trade that meets specific standards set by the Fairtrade Labelling Organizations International (FLO). Only products that have been approved by FLO are allowed to use this term and display the FAIRTRADE Mark on their packaging. 
The FAIRTRADE Mark: The international consumer label that appears on products certified by The Fairtrade Foundation and its partner organisations that operate under Fairtrade Labelling Organizations International.
The Fairtrade Foundation: The Fairtrade Foundation is the United Kingdom's national initiative for Fairtrade. There are national initiatives in 21 different countries, all governed by the Fairtrade Labelling Organizations International, also known as FLO. The Fairtrade Foundation is a charity, and does not sell Fairtrade products directly. Its purpose is to regulate and promote Fairtrade, giving the only independent guarantee that products have met the Fairtrade Standards laid down by FLO International.
Below is a selection of information from the Fairtrade Foundation's "About Fairtrade" pages. We would have simply linked to the pages, but they are harder to read there, so we have recreated some of their content here for you instead, with the Foundation's permission. In time we plan to write our own complete guide to Fairtrade and the issue of trade justice, but to save time in the short term we have simply used existing material from the Fairtrade Foundation and FLO Web sites.
The need for Fairtrade
International trade may seem a remote issue, but when commodity prices fall dramatically it has a catastrophic impact on the lives of millions of small scale producers, forcing many into crippling debt and countless others to lose their land and their homes. Too many farmers in the developing world have to contend with fluctuating prices that may not even cover what it costs to produce their crop.
The development of fair trade
| “We don't need any charity, we are not beggars. If we are paid a reasonable price for our coffee, then we can do without charity.” Isaías Martínez, UCIRI, Mexico |
Development agencies recognised the important role that consumers could play to improve the situation for producers. By buying direct from farmers at better prices, helping to strengthen their organisations and marketing their produce directly through their own one world shops and catalogues, the charities offered consumers the opportunity to buy products which were bought on the basis of a fair trade.
Fairtrade labelling
Fairtrade Labelling was created in the Netherlands in the late 1980s. Max Havelaar launched the first Fairtrade consumer guarantee label in 1986 on coffee sourced from Mexico.
Today, there are now 21 organisations including the Fairtrade Foundation, that run the international standard setting and monitoring body Fairtrade Labelling Organizations International (FLO). Producers registered with FLO receive a minimum price that covers the cost of production and an extra premium that is invested in the local community.
This international body incorporates various stakeholders including elected producer and commercial representatives. It sets standards and ensures the international regular auditing of producer and commercial partners.
By September 2004 there were 422 Fairtrade certified producer groups (including many umbrella bodies) in 49 producer countries selling to hundreds of Fairtrade registered importers, licensees and retailers in 19 countries.
Frequently Asked Questions About Fairtrade
Click on the questions below to read the answer.
Definitions and policy
- What is Fairtrade?
- What is the FAIRTRADE Mark?
- What does Fairtrade mean for third world producers?
- What is the difference between fair trade and ethical trading?
- Is Fairtrade a subsidy that encourages farmers to grow more coffee and therefore contribute to global oversupply and low prices?
Fairtrade products
- What products are available and where can I find them?
- Why are there not more types of FAIRTRADE Mark products?
- My existing tea/coffee supplier assures me that they pay a fair price and treat their suppliers decently. Isn’t this as good as Fairtrade?
- Are there organic Fairtrade products?
- What about Genetically Modified Organisms (GMOs)?
- Why do some products claim to be fair trade but not carry the Mark?
Promoting Fairtrade
- I use, sell or promote Fairtrade products, so can I use the FAIRTRADE Mark on promotional materials?
Fairtrade is about better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay above market prices, Fairtrade addresses the injustices of conventional trade, which traditionally discriminates against the poorest, weakest producers. It enables them to improve their lot and have more control over their lives. [Back To Questions]
The FAIRTRADE Mark is an independent consumer label which appears on UK products as a guarantee that they have given their producers a better deal. The Mark is awarded by the Fairtrade Foundation, a registered charity set up by CAFOD, Christian Aid, Oxfam, Traidcraft Exchange and the World Development Movement. It shares internationally recognised Fairtrade standards with initiatives in 21 other countries, working together as Fairtrade Labelling Organisations International (FLO). [Back To Questions]
What does Fairtrade mean for third world producers?
For 500,000 workers and farmers in the developing world, Fairtrade means better terms of trade and decent production conditions. The Fairtrade Foundation, with its partners, maintains these standards by regularly inspecting third world suppliers, and checking contracts and trade terms. [Back To Questions]
What products are available and where can I find them?
The FAIRTRADE Mark appears on over 250 different products. They are available in most major supermarkets, wholefood and Fair Trade shops, and by mail order. If your store doesn’t have the product you want, please ask the manager to stock it! Go to the Fairtrade Foundation's Products page for more information on the products available. [Back To Questions]
Why are there not more types of FAIRTRADE Mark products?
It takes much time and money to develop criteria to ensure that new Fairtrade products really will benefit producers. The initial focus of Fairtrade was on agricultural commodities, such as coffee and tea, which have the most widespread impact on the livelihoods of small producers in the developing world. More products are following year by year – we hope you will see Fairtrade rice, cotton and a variety of Fairtrade fruit in the shops over the next couple of years. [Back To Questions]
My existing tea/coffee supplier assures me that they pay a fair price and treat their suppliers decently. Isn’t this as good as Fairtrade?
The purpose of Fairtrade is not merely to avoid exploitation of suppliers but to help make a real improvement in people’s lives. Fairtrade is based on a clear set of internationally-agreed criteria, which are independently assessed and monitored, and the whole system is open and transparent. The FAIRTRADE Mark is the only independent consumer guarantee of fair trade. If a company is claiming that it meets these standards, ask them whether they are prepared to subject them to the independent scrutiny and monitoring of the FAIRTRADE Mark. [Back To Questions]
What is the difference between fair trade and ethical trading?
Ethical trading means companies are involved in a process of trying to ensure that the basic labour rights of the employees of their third world suppliers are respected. The FAIRTRADE Mark, which applies to products rather than companies, aims to give disadvantaged small producers more control over their own lives. It addresses the injustice of low prices by guaranteeing that producers receive fair terms of trade and fair prices – however unfair the conventional market is. [Back To Questions]
Is Fairtrade a subsidy that encourages farmers to grow more coffee and therefore contribute to global oversupply and low prices?
Absolutely not. Subsidies are government payments which lower the price of goods with the intention of encouraging their production and/or consumption or of making them more competitive than imported goods. The cost of these subsidies is borne by taxpayers or consumers.
Fairtrade, on the other hand, is a voluntary model of trade that brings consumers and companies together to offer small-scale farmers a price for their coffee that covers the cost of production and provides a sustainable livelihood so that they can send their kids to school and pay their bills.
Oversupply is usually a result of coffee growers increasing production in the brief periods when prices are high. However, it is clear that the recent surge in global coffee production, and consequent low prices, is largely a result of government agricultural export policies in Vietnam and large-scale farm expansion in Brazil. Paradoxically, in an attempt to compensate for lower prices, many small-scale farmers dependent on coffee will increase output at the expense of quality.
But our experience suggests that paying a higher Fairtrade price need not increase production; rather, it gives farmers other options – to invest in quality improvements and gain access to speciality markets or diversify into other crops to reduce their dependence on coffee. [Back To Questions]
Are there organic Fairtrade products?
There is a wide choice of organic coffee, tea, honey, cocoa and chocolate products carrying the FAIRTRADE Mark and the range is increasing steadily.
You can read more information on the differences between Fairtrade and organic, by going to the Fairtrade/Organic page of the Fairtrade Foundation's Web site. [Back To Questions]
What about Genetically Modified Organisms (GMOs)?
At the moment there are no GMO crops in the categories covered by the FAIRTRADE Mark* so all Fairtrade products are GMO-free. Should GMOs become available in these categories the Foundation and its partners would consult widely with producers and take account of any public concern on this issue before allowing their use – the key factor for Fairtrade organisations is whether such developments would help producers in developing countries. [Back To Questions]
I use, sell or promote Fairtrade products, so can I use the FAIRTRADE Mark on promotional materials?
We are usually delighted for people to do this, but you will need to obtain our permission to do so first. Read the terms and conditions for use of the FAIRTRADE Mark, and download copies to use (both links go to pages on the Fairtrade Foundation's Web site) [Back To Questions]
Why do some products claim to be fair trade but not carry the Mark?
Some organisations like Oxfam and Traidcraft have been trading fairly for many years, and sell a wide range of fairly traded products. Consumers can trust these organisations, because challenging poverty is their main purpose (see more about our partnership with Oxfam and Traidcraft - another link to the Foundation's site). However, some other companies make their own ‘fair trade’ claims without having the independent scrutiny of the FAIRTRADE Mark, or the interests of producers at heart. If you are shopping and see tea, coffee, bananas or cocoa products without the Mark, there is no guarantee that they give producers a fair deal. [Back To Questions]
The information in this section has come from the Fairtrade Labelling Organizations International Web site, and is designed to give you a clearer picture of exactly what Fairtrade is and how it stays fair.
About Fairtrade Labelling Organizations International (FLO)
Millions of landless labourers and small farmers don’t have what is their right: enough to feed the whole family, send their children to school, and that little extra to invest in sustainable development. Clearly, the advantages of international trade are not reaching all people in the world. For small farmers, access to market or price information is difficult and as a result, many small farmers become more and more dependent on middlemen.
In bad times, many lose their only property:
their land, and thus, their livelihoods.
Similarly, many plantation workers do not see the benefits of increasing world trade. They endure low pay, an unsafe working environment and poor living conditions. Too often they lack the freedom to join a union to defend their rights and the opportunity to participate in decisions that affect their lives on the plantation.
FLO is the worldwide Fairtrade Standard setting and Certification organisation. It permits more than 800,000 producers, workers and their dependants in more than 45 countries to benefit from labelled Fairtrade.
FLO guarantees that products sold anywhere in the world with a Fairtrade label marketed by a National Initiative conforms to Fairtrade Standards and contributes to the development of disadvantaged producers.
FLO International exists to improve the position of the poor and disadvantaged producers in the developing world, by setting the Fairtrade standards and by creating a framework that enables trade to take place at conditions respecting their interest. The National Initiatives, members of FLO International, encourage industry and consumers to support fairer trade and to purchase the products. Products carry a Fairtrade Label, as the independent consumer guarantee that producers in the developing world get a better deal.
FLO International’s Product Management team is in contact with producer organisations certified by FLO, and traders registered to purchase and sell Fairtrade labelled products, in order to match supply and demand in the best way. Since the aim of FLO International is to improve the position of disadvantaged producers in the developing countries, FLO Fairtrade Products are typical agricultural products in the first place, such as coffee, cocoa and sugar, etc. Manufactured products are becoming important future candidate products for Fairtrade certification. Footballs are the first manufactured products certified by FLO.
Here is a list of current Fairtrade products:
- Cocoa
-
Coffee - Tea
- Honey
- Fresh fruits
- Mangoes
- Juices
- Rice
- Sports balls
- Sugar
- Wine
You can find out more about individual products by going to the Products page of the Fairtrade Foundation's Web site.
FLO standards need to be met by producer groups, traders, processors, wholesalers and retailers:
There are two sets of generic producer standards, one for small farmers and one for workers on plantations and in factories. The first set applies to smallholders organised in cooperatives or other organisations with a democratic, participative structure. The second set applies to organised workers, whose employers pay decent wages, guarantee the right to join trade unions and provide good housing where relevant. On plantations and in factories, minimum health and safety as well as environmental standards must be complied with, and no child or forced labour may occur.
As Fairtrade is also about development, the generic standards distinguish between minimum requirements, which producers must meet to be certified Fairtrade, and progress requirements that encourage producer organisations to continuously improve working conditions and product quality, to increase the environmental sustainability of their activities and to invest in the development of the organisations and their producers/workers.
Trading standards stipulate that traders have to:
- pay a price to producers that covers the costs of sustainable production and living;
- pay a premium that producers can invest in development;
- partially pay in advance, when producers ask for it;
- sign contracts that allow for long-term planning and sustainable production practices.
Finally, there are a few product-specific Fairtrade standards for each product that determine such things as minimum quality, price, and processing requirements that have to be complied with.
FLO gives credibility to the Fairtrade Labels by providing an independent, transparent and competent certification of social and economic development.
The four main aspects for certification are:
- assessing the conformity of produces to the Fairtrade standards,
- assuring that Fairtrade benefits are used for social and economic development,
- auditing FLO-registered traders in order to make sure that the Fairtrade price reaches the producers, and
- assuring that the Labels are only used on products coming from Fairtrade-certified producers.
To ensure that producer groups comply with Fairtrade standards, FLO works with a network of independent inspectors that regularly visit all producer organisations.
To monitor traders’ and retailers’ compliance with Fairtrade conditions, a specially developed trade auditing system checks that every Fairtrade-labelled product sold to a consumer has indeed been produced by a certified producer organisation which has been paid the Fairtrade price.
If you want to know more about any aspect of Fairtrade, the best places to go are www.fairtrade.org.uk and www.fairtrade.net. Alternatively, if you would like to ask us something about it, please feel free to do so by emailing info@fairtradeforwoodbridge.org.uk.
Thank you for reading.
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