What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration

What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration What is Fair Trade? What are the Principles of Fair Trade? Give examples for illustration

CONTENTS

As the world is revolving around globalization, everyone's heard the term Fair Trade.The words conjure images of coffee, chocolate and happy farmers with fresh produceadvertised on a product As a country with a thriving agriculture, Vietnam needs to payspecial attention to Fair Trade certification, especially when exporting goods tocountries with difficult markets such as the EU, the US, Canada, etc So, our groupexplored Fair Trade with the topic “What is Fair Trade? What are the Principles of FairTrade? Give examples for illustration”

Fair trade was created as an alternative way of doing trade It is based on partnership,which means that the interests of farmers and workers are just as important as othercommercial considerations It also represents a solution to poverty and a model fordevelopment In short, fair trade is a way of buying and selling products that makescertain that the people who produce the goods receive a fair price.

Fair trade is understood as a foundation to promote equality in international trade.With the aim to build and develop a global trade system based on fair principles ofproduction and trade, fair trade contributes to sustainable development by proposingbetter and healthier trade conditions, while guaranteeing rights for workers

For example, most developed countries like the United States grow sugar that isinsufficient for consumption However, the dilapidating international market prices,poor working conditions, and environmental deprivation pose severe challenges tofarmers in developing countries

Nonetheless, fair trade sugar ensures that cane farmers from developing countries getreasonable prices for their commodity Also, fair trade in sugar establishes a tradeconnection between farmers and importers Moreover, the money realized from thesale of sugar to importers enables farmers to improve their livelihoods besidesimproving their yield (BBC News, p.1)

Research shows that farmers who sell their sugar cane to certified fair trade dealsenjoy higher fair trade prices on top of receiving expertise on sugar cane productionsustainable techniques

2. Why do we need fair trade?

The truth of the matter is half of the world — nearly three billion people — live onless than two dollars a day, a number that does not even equate to a fair living wage

We all deserve a living wage - one that enables workers and their dependants to meettheir needs for nutritious food, clean water, shelter, clothes, access to education, access

to health care and transport And in a globalised world where factories are churningout cheap fast fashion, children are exploited in the supply chain According to theInternational Labour Organisation (ILO) there are around 260 million children in

employment around the world A truly staggering number and of them, the ILOestimates that 170 million are engaged in child labour, defined by the United Nations

as “work for which the child is either too young – work done below the requiredminimum age – or work which, because of its detrimental nature or conditions, isaltogether considered unacceptable for children and is prohibited” This needs to stopand we as consumers have a powerful voice in creating this change throughknowledge, awareness and choice

Fair trade is just as the words sound Farmers and workers around the world receive afair price for the trade of their goods

The concept of fair trade is global with many companies across different productcategories working hard to ensure that farmers and workers are given the basicfundamental human rights by being treated honestly and fairly whilst also promotingsustainable environmental practices In addition to fair prices and payment, strict fairtrade certification ensures absolutely NO child labour, good working conditions, nodiscrimination, no forced labor and no bonded labour There is a transparency fromseed to shelf and accountability at every stage to ensure there is positive impact onhumanity with no room for anything but the strictest social justice practices beingupheld

3 Benefits of Fair Trade:

• Fairtrade provides a fair price to farmers who grow the things we love, coveringthe cost of sustainable production and an additional sum of money to invest incommunity or business projects

• Fairtrade is good for the environment - Fairtrade supports sustainable farmingpractices which helps to minimize our environmental footprint Many Fairtradefarmers are also organic

• Fairtrade is safe - Fairtrade has standards that protect workers’ rights andpromote good health and safety practices Fairtrade has a list of harmfulchemicals that are banned from production

• Fairtrade supports communities By working through cooperative structures,Fairtrade farmers and workers are able to invest Fairtrade earnings in theircommunities, improving housing, healthcare, and schools

• Market access and fairer trade - Fairtrade is about doing trade differently Itempowers farmers and workers to take control of their lives, businesses andcommunities through trade Fairtrade also enables businesses – and throughthem, consumers – to understand the whole supply chain because it is trackedfrom producer to buyer

• Fairtrade promotes gender equality - Fairtrade believes the role of women inagriculture needs more visibility, recognition and value, and that gender equity

is important to social sustainability Currently, 350,000 women farmers andworkers are part of Fairtrade, a quarter of the total.

• Fairtrade is about quality and productivity - Supporting farmers to improve theamount of crop they produce and its quality are important for sustainablelivelihoods It means farmers can earn more from what they produce to becomemore economically stable and more reliable suppliers

• Fairtrade means what you buy matters - By choosing Fairtrade products, youare not only accessing high quality products, you are making a difference in thelives of the people who grow the food you eat and the goods you use

• Fairtrade sets standards - Fairtrade Standards social, economic andenvironmental standards that are set for both companies and the farmers andworkers who grow the food we love For farmers and workers the standardsinclude protection of workers’ rights and the environment, for companies theyinclude the payment of the Fairtrade Minimum Price and an additional FairtradePremium to invest in business or community projects of the community’schoice

• Fairtrade supports farmers to implement climate change adaptation measures.The Fairtrade Standards promote sustainable development through bestagricultural practices, which not only guide producers to adapt to climatechange, but also encourage them to mitigate their impact

4 Activities:

The goal of the fair trade movement is to ensure that farmers and workers areadequately compensated for their products There are four stages of the fair tradecertification process

• Formation of cooperatives: Typically, to qualify for fair trade certification, fairtrade farm workers join democratically organized fair trade cooperatives

• Third-party audit: These cooperatives—or the packer with whom they work—then pay for an audit to ensure that their processes and supply chains are up tofair trade standards Once approved, they’re eligible for fair trade certification

• Certification: A fair trade certification organization reviews the audit and grantsthe packer use of a fair trade label, a process similar to organic certification

• Pricing: After consulting producers and buyers, the fair trade labelingorganization sets a minimum price that must be paid to producers for fair tradeproducts The price covers the costs of producing their crop sustainably despitefluctuating market prices

5. History:

Fair trade started in the United States, where Ten Thousand Villages (formerly SelfHelp Crafts) began buying needlework from Puerto Rico in 1946, and SERRV began

to trade with poor communities in the South in the late 1940s The first formal “FairTrade” shop which sold these and other items opened in 1958 in the USA.

The earliest traces of Fair Trade in Europe date from the late 1950s when Oxfam UKstarted to sell crafts made by Chinese refugees in Oxfam shops In 1964, it created thefirst Fair Trade Organisation Parallel initiatives were taking place in the Netherlandsand in 1967 the importing organisation, Fair Trade Original, was established

At the same time, Dutch organisations began to sell cane sugar with the message “bybuying cane sugar you give people in poor countries a place in the sun of prosperity”.These groups went on to sell handicrafts from the South, and in 1969 the first “ThirdWorld Shop” opened World Shops, or Fair Trade shops as they are called in otherparts of the world, have played (and still play) a crucial role in the Fair Trademovement They constitute not only points of sales but are also very active incampaigning and awareness-raising

During the 1960s and 1970s, Non-Governmental Organisations (NGOs) and sociallymotivated individuals in many countries in Asia, Africa and Latin America perceivedthe need for fair marketing organisations, which would provide advice, assistance andsupport to disadvantaged producers Many such Southern Fair Trade Organisationswere established, and links were made with the new organisations in the North Theserelationships were based on partnership, dialogue, transparency and respect The goalwas greater equity in international trade

Parallel to this citizens’ movement, the developing countries were addressinginternational political fora such as the second UNCTAD conference (United NationsConference on Trade and Development) in Delhi in 1968, to communicate the message

“Trade not Aid.” This approach put the emphasis on the establishment of equitabletrade relations with the South, instead of seeing the North appropriate all the benefitsand only returning a small part of these benefits in the form of development aid

The growth of Fair Trade (or alternative trade as it was called in the early days) fromthe late 60s onwards has been associated primarily with development trade It grew as

a response to poverty and sometimes disaster in the South and focused on themarketing of craft products Its founders were often the large development andsometimes religious agencies in European countries These NGOs, working with theircounterparts in countries in the South, assisted to establish Southern Fair TradeOrganisations that organize producers and production, provide social services toproducers, and export to the North Alongside the development trade there was also abranch of solidarity trade Organisations were set up to import goods from progressivecountries in the South that were both politically and economically marginalised

6 Organizations promoting fair trade:

Most of the fair trade import organizations are members of, or certified by one ofseveral national or international federations These federations coordinate, promote,and facilitate the work of fair trade organizations The following are some of thelargest:

• FLO International (Fairtrade International), created in 1997, is an association ofthree producer networks and twenty national labeling initiatives that developfair trade standards, license buyers, label usage, and market the Fair tradeCertification Mark in consuming countries The Fairtrade International labelingsystem is the largest and most widely recognized standard setting andcertification body for labeled Fair trade Formerly named Fairtrade LabellingOrganizations International, it changed its name to Fairtrade International in

2009, when its producer certification and standard setting activities wereseparated into two separate, but connected entities FLO-CERT, the for-profitside, handles producer certification, inspecting and certifying producerorganizations in more than 50 countries in Africa, Asia, and Latin America.Fairtrade International, the nonprofit arm, oversees standards development andlicensing organization activity Only products from certain developing countriesare eligible for certification, and for some products such as coffee and cocoa,certification is restricted to cooperatives Cooperatives and large estates withhired labor may be certified for bananas, tea and other crops

• Fair Trade USA is an independent, nonprofit organization that sets standards,certifies, and labels products that promote sustainable livelihoods for farmersand workers and protect the environment Founded in 1998, Fair Trade USAcurrently partners with over 1,000 brands, as well as 1.3 million farmers andworkers across the globe

• Global Goods Partners (GGP) is a fair-trade nonprofit organization founded in

2005 that provides support and US market access to women-led cooperatives inthe developing world

• World Fair Trade Organization (formerly the International Fair TradeAssociation) is a global association created in 1989 of fair trade producercooperatives and associations, export marketing companies, importers, retailers,national and regional fair trade networks, and fair trade support organizations

In 2004 WFTO launched the FTO Mark which identifies registered fair tradeorganizations (as opposed to the FLO system, which labels products)

• The Network of European Worldshops (NEWS!), created in 1994, is theumbrella network of 15 national worldshop associations in 13 differentcountries all over Europe

• The European Fair Trade Association (EFTA), created in 1990, is a network ofEuropean alternative trading organizations that import products from some 400economically disadvantaged producer groups in Africa, Asia, and Latin

America EFTA's goal is to promote fair trade and to make fair trade importingmore efficient and effective The organization also publishes yearly variouspublications on the evolution of the fair trade market EFTA currently haseleven members in nine different countries.

In 1998, the first four federations listed above joined together as FINE, an informalassociation whose goal is to harmonize fair trade standards and guidelines, increase thequality and efficiency of fair trade monitoring systems, and advocate fair tradepolitically

• Additional certifiers include IMO (Fair for Life, Social and Fair Trade labels),Eco-Social and Fair Trade USA

• The Fair Trade Federation (FTF), created in 1994, is an association of Canadianand American fair trade wholesalers, importers, and retailers The organizationlinks its members to fair trade producer groups while acting as a clearinghousefor information on fair trade and providing resources and networkingopportunities to its members Members self-certify adherence to defined fairtrade principles for 100% of their purchasing/business Those who sell productscertified by Fairtrade International must be 100% certified by FI to join FTF

In Vietnam, farms developed under Fairtrade standards are often financed by foreignfunds, typically Irish Aid, Oxfam, Center for Development and Integration (CDI) andGreen Fair Trade Vietnam

7 Distributions and shops:

There are over 1.7 million farmers and workers in 1,707 producer organisations thatare part of Fairtrade Fair Trade sales have risen considerably during the last years,Fair Trade is expanding to address the mass market and many new Fair Trade productshave been launched in recent years So, have you ever asked yourself where are FairTrade products bought?

According to the survey, the most popular purchasing location for Fair Trade products

is the supermarket 68% of the respondents indicated to buy their Fair Trade products

in the supermarket, and the second most popular location to buy Fair Trade products isthe Café or Restaurant with 26% 22% of the respondents claimed to buy Fair Tradeproducts also in a Bio-Supermarket, whereas only 17% go to a Worldshop and 12%purchase Fair Trade products on the Internet The most popular location for buyingFair Trade products in Germany in 2007 was the supermarket, with 42.6% of theconsumers purchasing their Fair Trade products there (fair feels good, 2007) The samedevelopment can be seen in international sales figures, which show that the biggestincrease of Fair Trade sales has been reached with supermarket sales Almost asimportant as the supermarkets are the organic food shops (41%) This shows that the

combination of organic and Fair Trade is becoming more and more popular amongconsumers.

Distribution relied on mail order and a limited number of world shops (see, as anexample www.giftswithhumanity.com) The niche market era saw an increase inparticipants In addition to ATOs, fair trade companies started to emerge The productrange and brands extended to a wider choice of commodity products, such as tea,chocolate, cocoa, sugar, nuts and fruits Furthermore, quality levels and consistencyimproved This made it possible for fair trade to reach a larger customer base andappeal to a wider range of consumers in different segments

In short, Fair trade products are now available in supermarkets, corner shops, worldshops, online, and through mail order

8 Fair trade certificate:

Fairtrade serves as an alternative to conventional trade and is based on the partnershipbetween producers and consumers with the goal of improving lives and reducingpoverty through ethical trade practices

a) Definition:

A fair trade certification is a product certification within the market-based movementfair trade The most widely used fair trade certification is FLO International's, theInternational Fairtrade Certification Mark, used in Europe, Africa, Asia, Australia andNew Zealand Fair Trade Certified Mark is the North American equivalent of theInternational Fairtrade Certification Mark As of January 2011, there were over 1000companies certified to the FLO International's certification and a further 1000 or socertified to other ethical and fairtrade certification schemes around the world

The Fairtrade system monitors the buying and the selling of the product until it isconsumer packaged and labelled Certificates are only issued after a physicalinspection has confirmed that all relevant Fairtrade Standards have been compliedwith

So, the Fairtrade certification system aims to assure consumers that their purchasemeets special social, economic and environmental standards

b) How it works:

Fair trade is a strategy for poverty alleviation and sustainable development, aiming atcreating greater equity in the international trading system Through tradingpartnerships with marginalised farmers and craftspeople in developing countries,social and economic opportunities are created for these producers in a way that morecustomers are accessible to their products and a better deal is issued In return, theproducers have to comply with all the standards laid down by Fairtrade International

In reality, packers in developed countries pay a fee to the Fairtrade organisation for theright to use the Fairtrade certification logo Importers of Fairtrade certified productsare required to pay exporters a price higher than the market price of non-Fairtradecertified products, so as to cover the additional costs used by Fairtrade certified firms

in marketing and inspection Any surplus after paying these costs must be used forlocal social, environmental and economic projects

9 Fair trade standards:

Fairtrade Standards are designed to aid the sustainable development of some smallerproducers and agricultural workers around the world In order to become certifiedFairtrade producers, the cooperatives and their fellow farmers have to strictly complywith the standards laid down by Fairtrade International FLO International'scertification, the for-profit side, is responsible for inspecting and certifying producerorganizations in more than 70 countries in Europe, Asia, Africa and Latin America.The general standards set for different stakeholders are listed as follows:

Small Producer Organizations

• The majority of the members of the organization must be small-scale producerswho do not highly depend on hired workers, but run their farm mainly by theirown effort

• Any profits earned must be equally distributed among the producers

• Every member in the organisation should have the right to vote in the making process

Hired Labour

• Workers possess the right to join an independent union to collectively bargaintheir working conditions

• No forced or child labour

• Working conditions have to be equitable for all workers Salaries must be atleast equal or higher than the minimum wage in effect

• Safety and health measures must be implemented properly so as to avoidunwanted injuries at work

10 Commodities:

Fair trade commodities are goods that have been exchanged from where they weregrown or made to where they are purchased, and have been certified by a fair tradecertification organization, such as Fairtrade International or World Fair TradeOrganization Sixty percent of the fair trade market revolves around food productssuch as coffee, tea, cocoa, honey and bananas Non-food commodities include crafts,textiles, and flowers

a) Coffee:

Coffee is the most well-established fair trade commodity The largest sources of fairtrade coffee are Uganda and Tanzania, followed by Latin American countries such asGuatemala and Costa Rica Most Fair Trade coffee is Coffee arabica, a type of coffeeknown to be grown at high altitudes A lot of emphasis is put on the quality of thecoffee when dealing in Fair Trade markets because Fair Trade markets are usuallyspecialized markets that appeal to customers who are motivated by taste rather thanprice The fair trade movement fixated on coffee first because it is a highly tradedcommodity for most producing countries, and almost half the world's coffee isproduced by smallholder farmers While initially sold at small scale, currentlymultinationals like Starbucks and Nestlé use fair trade coffee

b) Cocoa

Cocoa is farmed in the tropical regions of West Africa, Southeast Asia, and LatinAmerica Many countries that export cocoa rely on cocoa as their single export crop

In Africa in particular, governments tax cocoa as their main source of revenue Cocoa

is a permanent crop, which means that it occupies land for long periods of time anddoes not need to be replanted after each harvest

c) Textiles

Fair trade textiles are primarily made from fair trade cotton By 2015, almost 75,000cotton farmers in developing countries had obtained fair trade certification Theminimum price that fair trade pays allows cotton farmers to sustain and improve theirlivelihoods Fair trade textiles are frequently grouped with fair trade crafts and goodsmade by artisans in contrast to cocoa, coffee, sugar, tea, and honey, which areagricultural commodities

d) Seafood

With increasing media scrutiny of the conditions of fishermen, particularly inSoutheast Asia, the lack of transparency and traceability in the seafood industryprompted new efforts In 2014, Fair Trade USA created its Capture Fisheries Programthat led to the first instance of Fair Trade fish being sold globally in 2015 Theprogram "requires fishermen to source and trade according to standards that protect