![Fairtrade-logo](https://upload.wikimedia.org/wikipedia/commons/0/02/Fairtrade-logo.jpg)
A fair trade certification is a
product certification
Product certification or product qualification is the process of certifying that a certain product has passed performance tests and quality assurance tests, and meets qualification criteria stipulated in contracts, regulations, or specifications ...
within the market-based
movement fair trade. The most widely used fair trade certification is
FLO International's, the
International Fairtrade Certification Mark
The International Fairtrade Certification Mark is an independent certification mark used in over 50 countries. It appears on products as an independent guarantee that a product has been produced according to Fairtrade political standards.
The ...
, used in
Europe
Europe is a large peninsula conventionally considered a continent in its own right because of its great physical size and the weight of its history and traditions. Europe is also considered a subcontinent of Eurasia and it is located entirel ...
,
Africa
Africa is the world's second-largest and second-most populous continent, after Asia in both cases. At about 30.3 million km2 (11.7 million square miles) including adjacent islands, it covers 6% of Earth's total surface area ...
,
Asia
Asia (, ) is one of the world's most notable geographical regions, which is either considered a continent in its own right or a subcontinent of Eurasia, which shares the continental landmass of Afro-Eurasia with Africa. Asia covers an are ...
,
Australia and
New Zealand
New Zealand ( mi, Aotearoa ) is an island country in the southwestern Pacific Ocean. It consists of two main landmasses—the North Island () and the South Island ()—and over 700 smaller islands. It is the sixth-largest island count ...
.
Fair Trade Certified Mark
The Fair Trade Certified Mark is a fair trade certification mark used primarily in the United States and Canada. It appears on products as an independent guarantee that disadvantaged producers in the developing world are getting a better deal. The ...
is the North American equivalent of the International Fairtrade Certification Mark. , there were more than 1,000 companies certified by FLO International's certification and a further 1,000 or so certified by other ethical and fairtrade certification schemes around the world.
The Fairtrade International certification system covers a wide range of products, including banana, coffee, cocoa, cotton, cane sugar, flowers and plants, honey, dried fruit, fruit juices, herbs, spices, tea, nuts and vegetables.
How it works
Fair trade is a strategy for poverty alleviation and sustainable development. It aims to create greater equity in the international trading system. It creates social and economic opportunities through trading partnerships with marginalised farmers and craftspeople in developing countries so that more customers are accessible to their products and they receive a favorable deal. In return, the producers must comply with the standards set by the certifying authority.
Packers in developed countries pay a fee to the Fairtrade organisation for the right to use the Fairtrade certification logo. Importers of Fairtrade certified products must pay exporters a price higher than the market price for non-Fairtrade certified products to cover additional costs borne by Fairtrade certified firms in marketing and inspection. Any surplus after paying these costs must be used for social, environmental, and economic projects.
Fairtrade Standards
![FairtradeCertifiedCottonTShirt](https://upload.wikimedia.org/wikipedia/commons/a/a5/FairtradeCertifiedCottonTShirt.jpg)
Fairtrade Standards aid the sustainable development of some smaller producers and agricultural workers in
third world countries
The term "Third World" arose during the Cold War to define countries that remained non-aligned with either NATO or the Warsaw Pact. The United States, Canada, Japan, South Korea, Western European nations and their allies represented the " Firs ...
. In order to become certified Fairtrade producers, the cooperatives and their farmers have to comply with standards set by Fairtrade International. FLO-CERT inspects and certifies producer organizations in more than 70 countries in Europe, Asia, Africa, and Latin America.
The standards set for different stakeholders are as follows:
Small Producer Organizations
* The majority of the members of the organization must be small-scale producers who do not highly depend on hired workers, but run their farms mainly by their own effort.
* Profits earned must be equally distributed among the producers.
* Every member in the organisation should have the right to vote in the decision-making process.
Hired Labour
* Workers have the right to join an independent union to
collectively bargain their working conditions.
* No forced or child labour.
* Working conditions have to be equitable for all workers. Salaries must be at least equal to or higher than the
minimum wage in effect.
* Safety and health measures must be implemented properly so as to avoid injuries at work.
Trade Standards
* Pay a price higher than the Fairtrade Minimum Price in order to cover the costs of sustainable production.
* Pay an additional amount of money that allows producers to invest in development (the Fairtrade Premium).
* Sign contracts that assist long-term planning and sustainable production practices.
Fairtrade Pricing
The Fairtrade system consists of two types of pricing: the Minimum Price and the Premium. These are paid to the exporters according to the proportion of output companies are able to sell with the brand 'Fairtrade Certified', typically ranging from 17% to 60% of their turnover.
* The Fairtrade Minimum Price is the price that must be paid by buyers to Fairtrade Certified producers. It is a floor price that covers producers' average cost of production, protecting producers from selling their products underpriced.
* The Fairtrade Premium is a sum of money which in addition to the payment for the products. It must be invested in the producers' business, livelihood and the socio-economic development of the workers. The producers have the largest power deciding how these funds are to be spent.
How fairtrade measures its impact
The Fairtrade system committed to a programme of Monitoring, Evaluation and Learning (MEL), which aims at generating recommendations and analysis in support of greater effectiveness and impact. is monitored by market-facing organizations present in countries where Fairtrade certified products are sold; market data is consolidated by Fairtrade International on an annual basis. These data form a basis for understanding the dynamics of how certification is developing, and how the impacts of Fairtrade are being distributed between producer organizations, geographies and products.
Fairtrade's governance bodies also review key results and evaluate regularly in order to improve strategy and decision-making. These results are publicised within the Fairtrade system and among relevant stakeholders for further discussion of findings and recommendations.
Criticisms
Little money reaches the farmers
The Fairtrade Foundation
The Fairtrade Foundation is a charity based in the United Kingdom that aims to empower disadvantaged producers in developing countries by tackling injustice in conventional trade, in particular by promoting and licensing the Fairtrade Mark, a gu ...
does not monitor how much of the premium paid to exporters reaches farmers. As the cooperatives incur heavy fees on inspection, certification and marketing, only a small amount of money is retained for the farmers. In general, Fairtrade producers are only able to sell 18% to 37% of their output as Fairtrade certified while the rest is sold as uncertified at market prices.
Fairtrade helps the rich to a larger extent
Fair Trade is profitable for traders in rich countries rather than those in poor countries. In order to qualify as Fairtrade producers, cooperatives must meet the strict standards set by certifiers which implies that their constituent farmers must be quite skillful and educated. However, these farmers are predominantly from the poorest countries and lack the leverage to bargain with the cooperatives. Corruption even occurs in some cases.
Inefficient marketing system
Fairtrade certified products sold through a
monopsonist
In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity ...
cooperative may be inefficient and prone to corruption. Fairtrade farmers should have the right to choose the buyer who offers the best price, or switch when their cooperatives are going bankrupt. A
monopsonist
In economics, a monopsony is a market structure in which a single buyer substantially controls the market as the major purchaser of goods and services offered by many would-be sellers. The microeconomic theory of monopsony assumes a single entity ...
cooperative in charge of Fairtrade certification may try to grow the fair trade industry for profit and not so much for the lives of the small farmers. At this point they are trying to increase the supply of fair trade when the supply is already far beyond the demand.
Other certification and product labelings
* The
Fair Trade Federation
The Fair Trade Federation (FTF) is a nonprofit trade association that provides support to and promotes North American businesses that they identify as being fully committed to the principles of fair trade.The Fair Trade Federation. http://www.fai ...
does not certify individual products, but instead evaluates an entire business.
* The FTO Mark, launched in 2004 by
World Fair Trade Organization
The World Fair Trade Organization (WFTO), is a global association of 401 organizations who are committed to improving the livelihoods of economically marginalised producers. WFTO has members in 76 countries. Members are primarily fair trade enterpr ...
, and identifies registered fair trade organizations.
*
UTZ CERTIFIED
UTZ, formerly called UTZ Certified, is a program and a label for sustainable farming. The organization was founded as a non-profit in the Netherlands in 2002. The UTZ label is featured on more than 10,000 product packages in over 116 countries. ...
is a coffee certification program that has sometimes been dubbed "
Fairtrade
A fair trade certification is a product certification within the market-based movement fair trade. The most widely used fair trade certification is FLO International's, the International Fairtrade Certification Mark, used in Europe, Africa, As ...
lite"
[Conroy, Michael (2007). ''Branded!'' p. 252]
Counter Culture Direct Trade Certificationis a
direct trade
Direct may refer to:
Mathematics
* Directed set, in order theory
* Direct limit of (pre), sheaves
* Direct sum of modules, a construction in abstract algebra which combines several vector spaces
Computing
* Direct access (disambiguation), ...
alternative to the
Fairtrade certification.
*
Whole Trade Guarantee
Whole Foods Market IP, Inc., a subsidiary of Amazon, is an upscale American multinational supermarket chain headquartered in Austin, Texas, which sells products free from hydrogenated fats and artificial colors, flavors, and preservatives. A USDA ...
, a purchasing initiative launched in 2007 by
Whole Foods Market
Whole Foods Market IP, Inc., a subsidiary of Amazon, is an upscale American multinational supermarket chain headquartered in Austin, Texas, which sells products free from hydrogenated fats and artificial colors, flavors, and preservatives. A US ...
.
"Fair's Fair at Whole Foods"
''The Motley Fool'', April 2, 2007.
References
External links
Fairtrade America Official Website
{{Social accountability
Fair trade
Product certification