Fair Trade Principles

Fair Trade practitioners are committed to the following principles and practices in their trading relationships:

  • FAIR WAGES
  • COOPERATIVE WORKPLACES
  • CONSUMER EDUCATION
  • FINANCIAL AND TECHNICAL SUPPORT
  • ENVIRONMENTAL SUSTAINABILITY
  • RESPECT FOR CULTURAL IDENTITY
  • PUBLIC ACCOUNTABILITY

FAIR WAGES

Producers are paid fairly for their products, which means that workers are paid at least that country's minimum wage. Since the minimum wage is often not enough for basic survival, whenever feasible, workers are paid a living wage, which enables them to cover basic needs, including food, shelter, education and health care for their families. Paying fair wages does not necessarily mean that products cost the consumer more. Since fair trade organizations bypass exploitative middlemen and work directly with producers, they are able to cut costs and return a greater percentage of the retail price to the producers.

COOPERATIVE WORKPLACES

Cooperatives and producer associations provide a healthy alternative to large-scale manufacturing and sweatshops conditions, where unprotected workers earn below minimum wage and most of the profits flow to foreign investors and local elites who have little interest in ensuring the long term health of the communities in which they work. Fair trade organizations work primarily with small businesses, worker owned and democratically run cooperatives and associations which bring significant benefits to workers and their communities. By banding together, workers are able to access credit, reduce raw material costs and establish higher and more just prices for their products. Workers earn a greater return on their labor, and profits are distributed more equitably and often reinvested in community projects such as health clinics, child care, education and literacy training. Workers learn important leadership and organizing skills, enabling selfreliant grassroots-driven development. Safe and healthy working conditions are maintained and producers gain greater control and decision making power over the use of their local resources.

CONSUMER EDUCATION

Fair trade organizations educate consumers about the importance of purchasing fairly traded products which support living wages and healthy working conditions. By defining fair trade and conducting business in a manner that respects workers' rights and the environment, the fair trade movement strives to educate consumers about the often hidden human costs of their "bargains." By providing information about producers' history, culture and living conditions, fair trade Organizations enhance cross-cultural understanding and respect between consumers and communities in the developing world. They also educate consumers and policy makers about inequities in the global trading system.

ENVIRONMENTAL SUSTAINABILITY

Fair trade organizations encourage producers to engage in environmentally friendly practices which manage and use local resources that are sustainable. Many Fair Trade Federation members work directly with producers in regions of high biodiversity to develop products based on sustainable use of their natural resources, giving communities an incentive to preserve their natural environments for future generations.

FINANCIAL AND TECHNICAL SUPPORT

Small-scale farmers and artisans in the developing world lack access to affordable financing, impeding their profitability. Fair Trade Federation members that buy products directly from producers often provide financial assistance either through direct loans, prepayment or by linking producers with sources of financing. Unlike many commercial importers who often wait 60- 90 days before paying producers, many fair trade organizations ensure prepayment so that producers have sufficient funds to cover raw materials and basic needs during production time. They also often provide other critical technical assistance and support such as market information, product feedback and training in financial management. Unlike commercial importers, fair trade organizations establish long term relationships with their producers and help them adapt production for changing trends.

RESPECT FOR CULTURAL IDENTITY

Fair trade organizations encourage the production and development of products based on producers' cultural traditions adapted for Western markets. They seek to promote producers' artistic talents in a way that preserves cultural identity.

PUBLIC ACCOUNTABILITY

Organizations' finances, management policies, and business practices are open to the public and monitoring by the Fair Trade Federation (applies only if they are members of the Fair Trade Federation).



This information was obtained from the Fair Trade Federation. Visit them to learn more about fair trade!