Fair Trade FAQ's
WHAT IS FAIR TRADE?
Fair Trade is a movement: a socially innovative response to market
failure – the failure of the traditional trade system to incorporate fair
access to markets, wage justice and environmental standards. The origins
of the Fair Trade movement can be traced back 50 years where, rooted
in trade justice and human solidarity, it established alternative methods
of supplying products with a shared understanding of fairness and trading partnerships. Fair Trade products (craft and commodities) allows us, as
consumers, to support trade justice through our purchasing choices.
WHY FAIR TRADE?
The benefits of international trade are not shared fairly by everyone
in the world. Small producers have limited access to market and price information. As a result, they are often dependent on middlemen and receive smaller returns for their work. Many plantation and factory workers endure low pay, unsafe working environments and poor living conditions.
WHAT IS THE DIFFERENCE BETWEEN FAIR TRADE AND FAIRTRADE?
The term Fair Trade is used to refer to the Fair Trade movement as a whole and the organizations that abide to the 10 Principles of Fair Trade. This includes both labelled and unlabelled Fair Trade goods and the work of the World Fair Trade Organization.
Fairtrade (one word) is used to describe the certification and labelling system governed by Fairtrade International. The Fairtrade system allows consumers to identify commodity goods (tea, coffee, rice, cotton etc – and sportsballs) - that have met internationally-agreed Standards according to the Fairtrade system.
Fairtrade labelling is one component of the Fair Trade system.
WHAT IS THE FAIRTRADE LABEL?
One of the expressions of Fair Trade is the FAIRTRADE label. It is a label which appears on products as a guarantee that they have been certified against their internationally agreed Fairtrade standards. – it does not act as an endorsement of an entire company’s business practices because not all of their products may be Fairtrade. The Fairtrade label was introduced in Australia and New Zealand by the Fair Trade Association in 2006.
The FAIRTRADE label is one of two recognized Fair Trade Systems. The other is the World Fair Trade Organization (World Fair Trade). Both systems provide a better deal to the producers involved and each is equal in what is Fair Trade.
WHAT IS THE FAIR TRADERS OF AUSTRALIA ENDORSEMENT?
Endorsed Fair Traders of Australia are businesses that have committed to an Australian Standard for Fair Trade, which means that you can buy from them with the confidence that they have fair trade at the core of all that they do. The Standard for Fair Trade covers ten aspects of fair trade, including creating opportunities for economically disadvantaged producers, payment of a fair price, gender equity, working conditions, capacity building, and the environment. See all ten standards in full.
Endorsed Fair Traders sell a range of products, such as handcrafts, arts, giftware, clothing, and Fairtrade Certified products including tea, coffee, chocolate, and sports balls, just to name a few. However, whether their products have the Fairtrade Label or not, the Trader has completed the assessment process to ensure that all products are fairly traded.
This means that whatever products you buy from an Endorsed Fair Trader, you can be sure that the trader sources most of their products by partnering with disadvantaged producers to give them the opportunity to trade their way out of poverty with dignity.
Whenever a business displays a Fair Trader of Australia logo, you know that they have been assessed as operating according to Australian Fair Trade standards.
WHAT ARE THE 10 PRINCIPLES OF FAIR TRADE?
A full description can be found here on the World Fair Trade organization website.
1 Creating Opportunities for Economically Disadvantaged Producers
2 Greater Transparency and Accountability
3 Fairer Trading Practices
4 Fairer Prices for Producers
5 No Child Exploitation or Forced Labour
6 Non Discrimination, Gender Equity and Freedom of Association
7 Better Working Conditions
8 Capacity Building
9 Promotion of Fair Trade
10 Environmental Sustainability
WHO BENEFITS FROM FAIR TRADE?
Fair Trade provides tangible benefits to small-scale farmers and producers, consumers and the environment.
Small-scale Farmers and Workers: Fair Trade benefits millions of workers in 60 developing countries in Africa, Asia and Latin America. Including their dependents, five million people are affected. Fair Trade allows them to achieve economic independence and empowerment while improving their standards of living. Beyond being paid a fair price for their produce, Fair Trade premiums or other financial initiatives enable producers to better their communities by providing programs like:
- Improved access to low or no-interest loans
- Technical assistance for building infrastructure to improve production
- Communications systems, and collectively-owned transport and processing equipment
- Better health care and education
- Technical training and skill diversification for cooperative members and their families
Fair Trade benefits consumers by:
- Giving them the option of purchasing according to their principles and values,
- Empowering them to be a player in the solution to global trade inequities
- Providing them with products of superior quality
- Assuring them of the ethical source of their food and non-food purchases
Environment: Fair Trade rewards and encourages farming and production practices that are environmentally sustainable, such as:
- Integrated farm management systems which minimize pollutants, pesticides and herbicides
- Organic agriculture techniques
- Banning the use of dangerous pesticides
WHAT FAIR TRADE PRODUCTS ARE AVAILABLE?
In Australia and New Zealand, there is a wide variety of Fair Trade crafts and commodities, which include artisan craft, gifts, homewares, sportsballs, coffee, tea, chocolate cocoa, nuts, cotton, rice and quinoa, and in New Zealand - bananas.
ARE FAIR TRADE PRODUCTS ALSO ORGANIC?
Not necessarily. Fair Trade criteria however require sustainable farming techniques, and offer an extra premium for organic production. You will find a lot of Fair Trade products are organic, nonetheless (look for the organic bud). Revenues from Fairtrade cooperatives are often used to educate producers in organic and sustainable techniques like composting and integrating recycled materials. If the product is labelled Organic and also Fairtrade – you support both ethical approaches.
DO FAIR TRADE PRODUCTS COST MORE?
Not all Fair Trade products cost more than conventional products. Price differences need to consider many factors. Often they are of a superior quality due to their organic practices. There are other factors such as scale of economy. Production of smaller quantities can often cost producers and processors more at every turn (packaging, transport, etc) because they cannot benefit from a large enough scale to use as a bargaining position. Finally, retailers make the choice to set the final price to consumers. Retail pricing is not controlled or influenced by the Fair Trade movement. Both the Fair Trade labelling initiatives and World Fair Trade verifies the minimum guaranteed price has been made to the producer but the final price asked of the consumer is solely the decision of the retailer.
HOW LARGE IS THE FAIR TRADE MARKET?
Despite recent years being one of the most difficult economic years on record, retail sales of Fair Trade products in Australia and New Zealand increased by 58% or more. In 2010 Fair Trade sales skyrocketed by almost 200% to almost AU$150 million. Since the first Fair Trade products went on the market in the region in 2003, sales in 2010 passed a cumulative total of excess of AU$271 million. Being one of the fastest growing markets for Fair Trade products, Australia and New Zealand reached a combined retail sales total of AU$148.7 million in the 2010 calendar year, compared to AU$50.7 million in 2009. This substantial growth is a reflection of the global Fair Trade trend. Even amidst the recent economic downturn, businesses and consumers are increasingly choosing Fair Trade. The number of Fair Trade licensed operators, importers, and companies retailing products is also continuing to grow. There are currently almost 300 businesses who sell Fair Trade products in Australia and New Zealand. Globally, there were in excess of AU$5.48 billion in sales of Fair Trade products in 2009 – a 15% increase from the previous year.
HOW CAN I TELL A PRODUCT IS FAIR TRADE?
There are two things to look for:
1. If it is a craft product or a gift – ask the retailer if they are a Fair Trader of Australia – which has been endorsed (certified) as a Fair Trade by the Fair Trade Association. A growing number of retail shops are supporting Fair Trade and include Fair Trade products in their product range.
2. Look for the Label - Fairtrade certified products like sports balls, rice, quinoa, tea and coffee always have the FAIRTRADE Label on the front of their packaging.
WHERE CAN I BUY FAIR TRADE PRODUCTS?
Please refer to our our Buy and Sell page for ways to buy and support Fair Trade.
HOW CAN I SUPPORT FAIR TRADE?
Check the Get Involved page to find out about how to get involved with the Fair Trade Movement - locally through Fair Trade Communities, Fair Trade Fortnight and membership of the Fair Trade Association.