Fair trade

The dismal science Economics

Economic systems

$  Free market   €  Social democracy   ☭ Socialist economy

Major concepts

Brain drain Wage ceiling Conspicuous consumption Charter city Poverty

The worldly philosophers

Milton Friedman Amartya Sen Friedrich Hayek Akinwumi Adesina v - t - e

A Fair Trade display in Derbyshire, England

Fair trade is a set of commercial norms that aims to ensure that the producers of consumer products, especially those from the so-called "developing world," have decent working conditions and earn a reasonable income for their labour. Some fair trade organizations claim to be committed to environmental causes. Of course, where billions of dollars are at stake, there is bound to be funny business.

Note that the term "Fairtrade" refers to Transfair and the FLO, while "fair trade" denotes the practice more generally.

Certifying organizations

There are several different fair trade groups:

• FLO International. This is composed of two main entities and regional sub-organizations: the FLO, which creates the standards, and FLOCERT audits and enforces standards. FLOCERT claims to have certified more than 3000 producers. FLO International is closely linked to Fair Trade USA and any group with the name TransFair or with Fairtrade as one word.
• The World Fair Trade Organization
• Institute for Marketecology (IMO)
• International Resources for Fairer Trade

Other groups which certify products or producers include Fair Trade Federation and UTZ Certified.

There are dozens of Fair Trade certification organizations, and even Walmart now offers fair trade products.

None of these certifiers are governmental or quasi-governmental regulatory authorities, national or international.

Environmental standards

Some of the environmental standards include:

• Having a specific individual on the farm responsible for maintaining the standards. This is used as an internal control.
• Being able to apply pesticides "…based on knowledge of pests and diseases."
• Proper handling of pesticides, since pesticides are most often sold in concentrate and than diluted on site in commercial farming. (Transfair does not require organic farming methods.) This also includes having the pesticides properly labeled, stored, and using the correct personal protective equipment before and after pesticide application.
• Having equipment that can be used to respond to a pesticide spill.
• Using practices to reduce soil erosion.
• Finding sustainable water sources.
• Trying to improve soil fertility through methods such as crop rotation.
• Keeping a buffer zone between farming and "areas with high conservation value", as defined by the Forestry Stewardship Council, and includes areas inhabited by endangered species.
• Reducing and reporting greenhouse gas emissions from power consumption.
• DDT is not allowed.

Since the individual farms pay to meet these standards, it will often decrease their income from the fair trade coffee. In many cases using these standards may reduce yields. The requirements also appeal to larger, more skilled, producers than smaller impoverished producers.

Labour standards

• Fairtrade farmers cannot discriminate "..on the basis of race, colour, gender, sexual orientation, disability, marital status, age, HIV/AIDS status, religion, political opinion, membership of unions or other workers’ representative bodies, national extraction or social origin in recruitment, promotion, access to training, remuneration, allocation of work, termination of employment, retirement or other activities."
• Farms are also barred from testing for HIV, pregnancy, or genetic disorders as a part of employment
• Corporal punishment and sexual harassment are prohibited.
• Forced labour, debt bondage and slave labour are prohibited.
• Farms cannot hire children under 15, but children under 15 are allowed to "help" work outside of regular school hours, and aren't involved in dangerous work.
• Collective bargaining is permitted.

GMO

For more information, see: Genetically modified food

While non-organically farmed food may be certified as fair trade, most if not all fair trade certifiers will outright refuse to certify foods containing Genetically Modified Organisms (GMO). This arbitrary rule is a problem for those of us who want to approach environmental issues in a scientific manner but also are good-faith customers that want to support farmers as well. GMOs are a relatively new and incredibly powerful tool in producing a crop that is disease resistant, requires less work, increased nutrition, environmentally friendlier, etc etc, you know, things that would ensure that farmers have a steady source of income. Genetically modified food's problems are usually not unique to them, such as the oft-cited seed patents. And unlike organic farming which has imposed unnecessarily restrictive measures on farming (such as banning synthetic pesticides and allowing "natural" but not necessarily safer pesticides, and using fertilizers such as manure that can facilitate E. coli) that has led to outbreaks that can kill people, not a single death has been linked to GMO food. This is not touching into the problem of what is a genetically modified food, as most of the food we eat have been already genetically modified from constant selection of the most desirable traits over history to the point they resemble nothing like their wild counterparts.

Who gets the money

It is unclear how many extra cents the farmers get for every dollar increase in price for a product. In the case of Whole Foods Market Inc fair trade coffee, a consumer will pay an extra $4 per pound of coffee, but only 14 cents actually go to the farmer. So then who pockets the remaining $3.86? The fair-trade certifier takes a small cut, but most will go to intermediaries, such as roasting companies and distributors, and of course Whole Paycheck Foods themselves. In the end of the day, it's still the companies that make most of the money.

See also

For those of you in the mood, RationalWiki has a fun article about Fair trade.

• Free trade
• Just price