Day 18: Fair Trade, the Market, and You
Fair Trade is a market-based system. This means that Fair Trade Certified products utilize the same rules of supply and demand as any other product. The men and women that make Fair Trade Certified products work hard to receive a fair wage, and Fair Trade ensures that they receive these fair wages*. Fair Trade Certified producers are also empowered by the Fair Trade system to form cooperatives that enable them to create sustainable working and living conditions within their communities. Through these democratic cooperatives, producers are able to make sound economic decisions as a democratic group, deciding, for example, where to invest money in order to better their products and their communities. The cooperatives also allow producers to receive benefits they might not otherwise receive, such as scholarships to send their children to school, access to medical clinics, and credit to invest in their futures.
All of this is possible through a market-based model that empowers consumers to make the conscientious choice to support Fair Trade through their purchases. This demand allows for producers to continue supplying their goods, to continue to provide benefits to their communities through the cooperatives, and to continue to develop and better the business skills needed to compete in the global marketplace.
* When a product is Fair Trade Certified it means that the producer of the product was given a fair wage. A “fair wage” is a negotiated price that allows for the sustainable production of the product in the future. If the market price falls below this agreed upon price, the producer continues to get the sustainable, fair price for his or her product. If the market price goes over the agreed upon price, the producer gets the higher market price. Producers may also receive premiums above the agreed upon price, for example, if their products are certified organic, as well.
More information from:
TransFair USA (for Advanced FAQ from Transfair USA, go HERE)
Fairtrade Labeling Organizations International
[...] is Fair Trade Month: learn about fair trade – Day 18: Fair Trade, the Market, and You. Fair Trade Certified producers are also empowered by the Fair Trade system to form cooperatives [...]