5 Benefits of Fair Trade Everyone Should Understand
A growing number of consumers do understand, in a rather vague way, that fair trade, and buying fair trade products, is a good thing, whether it’s coffee, clothing, shoes or something else. However, accepting that it is ‘good’ isn’t enough to swing many in their purchasing decisions, a better understanding of fair trade and its benefits is called for. Here’s a run down of five of the biggest benefits of fair trade that will help further that understanding.
Individual Income Increases
Fair trade increases the income of the farmers, craftsman and others that participate in it. They are paid for their goods at an agreed upon, set price that all parties agree is fair and then given access to less complicated distribution channels, allowing them to keep more of their profits for themselves.
Producers Gain Access to a World Market
Farmers, craftspeople and others who live and work in small communities in developing countries benefit when they have access to the rest of the world, its markets and its consumers. This is exactly what fair trade provides. A small fair trade coffee producer from Costa Rica, for example, has the chance to get their products into the hands of people in say, Kansas City, Missouri, far away in the US, something that would have been unthinkable just a few decades ago.
Fair trade producers are, as a part of the agreements that grant them their certifications, held to higher environmental standards than many who mass produce goods. Farmers are limited in the number of pesticides they can use and complete transparency is required in detailing growing and production methods. This results in environmental benefits not only for the country the good are being produced in but for the world in general.
It’s a basic financial truth; those who make more spend more. As those involved in fair trade increase their income the positive effect is passed on to the communities they live in. Often fair trade pricing includes a premium that covers the costs of local projects including the construction of schools, hospitals and other community centres, educational scholarships and even low cost loans that allow producers to expand their operations.
The world is a big place and even with the rise of the Internet far too many people are unaware of just how others live, the struggles they face and the help that they need. When purchasing fair trade goods, it’s far from unusual for consumers to become more interested in where these products came from, who produced them and how those people live. This increased awareness is good for everyone, as it fosters a global understanding that is desperately needed right now. These are just some of the benefits of fair trade, there are many more. Understanding these basics however is a great start for anyone who has ever wondered if by opting to buy fairtrade goods they are really making a difference.
The many benefits and pros of fair trade clothing, fair trade shoes and products are clear once one learns that its main goal is to alleviate poverty in developing countries and inculcate the value of sustainable development. It aims to create more opportunities for producers facing economic disadvantage over multinational companies. Because it also aims for sustainable development, both workers and producers are being offered much better trading conditions than before. Here we aim to answer “What are Trade Benefits of Fair Trade?”
Five Benefits of Fair Trade can easily be seen
First benefit is that it increases the income of the producers of the farmers. This is achieved through two steps –
- The price of the goods are paid at an agreed and guaranteed fair price for the producer and manufacturer.
- The distribution channels involved in marketing the goods is also reduced thus the producers get a larger share from the price of the goods rather than the distribution company.
Second benefit is that because they now have a larger share of the pie, both farmers and workers have extra income with which to improve their lives. The price of a specific good is typically computed to cover the cost of both sustainable production and livelihood. A premium is also added to the price to be used as investment for development projects. These projects include building schools, funding scholarships and even used to fund low-interest loans for farmers and workers.
Third benefit is that is involves greater environmental protection. The Fair Trade Certification being used to market the products does not only show where the good comes from and who benefits from it. It also tells consumer how the good was made and manufactured. For agricultural goods for example, the use of some pesticides is not allowed and hence giving consumer greater satisfaction in knowing that the goods are safe.
Fourth benefit is the advantage that farmers are able to obtain a better and stronger foothold in the world market. Because buyers deal directly with the farmers, the farmers are able to get good prices for their products in the market.
Fifth benefit is that it provides a closer link to the producers and consumers. Most consumers nowadays are environmentally conscious and thus want to know more about their products. In addition, consumers also want to know just how much the ones who originally make the products are getting. Thus in the end consumers become satisfied with the quality of their products and the farmers get satisfaction from knowing that they got paid accordingly for the goods they produced.
Benefits of Fair Trade Products
These are just a few of the many benefits of fair trade has, for most consumers, knowing where the product came, who benefits from it and how it was made makes the purchase all the more fulfilling.
When Paballo was eleven years old in Grade 5 at school, his mother became mentally ill and had to give up her work in a bookshop. As a result, Paballo became very dependent on his father. In his second year at high school when he was fifteen, he was devastated when his father died. As there was now no means of raising the fees required for his schooling, Paballo dropped out of school.
How Fair Trade changed Paballos’ life
Three years later, a past school principal of his paid the fees to enable him to go back to school. It was at this time that the Christian Revival Church through the outreach ministry arm of the church called ‘Love in Action Lesotho’ and one of the projects under this umbrella ‘Jewels of Hope’ (JoH) became aware of his situation and he was invited to join the first group of JoH in 2005. With the financial assistance that he was given he was able to finish his high schooling and went on to college to study home economics. He also learnt the skills of Jewellery making.
Fair Trade Skills
During his schooling he worked in making Fair Trade jewellery in Lesotho. Paballo was mentored and taught many skills. He learnt a variety of jobs including renovating, and showed how to maintain,
his house. At the age of twenty-one, Paballo was still sleeping in the same room as his mentally ill mother – two other rooms in the house where un-liveable. Paballo was also taught how to repair and restore these two rooms. He now has a bedroom of his own and is able to rent out the other room to bring in some income.
After completing the three-year ‘Jewels of Hope’ (JoH) Fair Trade Jewellery program, he became a trainer and worked with a group of five children to disciple and mentor them as well as teaching them how to make jewellery. He has gone on to be a teacher’s aide at the American International School in Maseru, the capital city of Lesotho. Life would have been very different for Paballo if he had not had the opportunity to learn many skills including making Fair trade jewellery.
‘Jewels of Hope’ (JoH) is an organization started to teach orphans and vulnerable children how to make Fair Trade jewellery as a source of income. It was started under ‘Love in Action Lesotho’ (LiAL) in Lesotho, Africa.
Fair Trade Jewellery made by orphans and vulnerable children
By supporting Jewels of Hope you enable children to receive:
- Basic income to buy food, shoes & clothes
- The means to attend school
- Access to care, mentorship and personal development
- Finance to purchase materials to make more products
- A sense of pride and purpose
The Jewels of Hope Fair Trade Jewellery Online Store
After the death of his mother when he was six years old, Daniel went to live with an uncle. When he was in Grade 3 at school, he went into the mountains to live with his father but as he was required to herd the cows every second day, he only went to school on alternate days. After his father died when he was in Grade 6, so Daniel returned to live with his uncle again. Unfortunately, his uncle became blind and died, so the following year, when Daniel was in Grade 7, he went to live with his grandmother.
Daniel’s aunt had recently become involved as a trainer in a project called ‘Jewels of Hope’ (JoH) that had been started under ‘Love in Action Lesotho’ (LiAL), so Daniel was taken into the program in 2006. When Graeme became a trainer in May of 2008, he began to disciple and mentor Daniel (second from the left) as well as teach him how to make jewellery. With the help of LiAL and JoH, he was able to finish his high schooling and is now in his third year at college doing a course in Business Management. To raise money for transport and other necessities, he has been raising chickens, putting in to practice the business principles that he learned at JoH. He ultimately hopes that he will be able to become an accountant in the future.
In 2009, Daniel (left) became a trainer in the JoH program and now successfully leads a group of five children seeking to disciple and mentor them as well as teach them how to make jewellery.
Benefits of Fair Trade
In May of 2014, Daniel (left) was one of eight graduates from the LiAL project to be trained in the making of paper beads. The organization ‘Jewels of Hope’ based in Johannesburg will buy the beads and use them in their Fairtrade jewellery designs. This gives these young people a means of earning an income to assist them as they continue their studies. This is just one of many examples where buying Fair Trade products makes a difference to a children and a community.
Fair Trade USA (formally TransFair USA) have introduced the first US certification for Fair Trade Clothing, to specifically protect cotton farmers. The certification is a 2 year pilot test which aims to improve the conditions of workers and cotton farmers. This is very exciting news for producers and manufactures of fairtrade around the world, let’s hope more countries will introduce this certification too.
Fair Trade Products
Today, the third-party certifier of these products, launched the first US certification for Fair Trade clothing as part of a two-year pilot test, because the term “sustainable fashion” should mean more than just organic cotton or materials. It should include the working conditions and livelihoods of garment workers and cotton farmers as well.
Fair Trade ensures “cotton farmers receive a guaranteed minimum price to protect them from price fluctuations…” Hopefully, this guaranteed minimum price is significant enough to help the world’s subsistence cotton growers compete with the over-subsidized American cotton farmers.
How do you think this certification compares to that of Oxfam’s Fair Trade Act?
There are already a lot of studies made concerning the impact of fair trade on the lives of producers and farmers from developing countries. Though a lot has been said on fair trade, knowing the results of such studies can enhance our knowledge of how it has truly helped.
Why not do some reading to help keep yourself informed of discussions, questions and information on what we can do as consumers, to help make a difference as seen below in these studies. There are many books available on this topic, why not ‘Click’ on the book featured here to see a small range of the many books available and resource yourself to ‘make a difference’.
Impact of Fair Trade In Mexico
One such study was on the impact of fair trade was done by a Daniel Jaffee of Michigan State University. His study was conducted for over four years and looked into how it made a difference on coffee producers in Oaxaca, Mexico. His study revealed that while fairtrade has higher production costs, the higher prices has enabled gross household income in the area to increase. It did not only reduce their debts but also enhanced their economic options. This enabled households to have a better chance of feeding their families and educating the children. Because of the minimum price level set under fair trade standards, households were able to get some breathing room in cases when a commodity crisis was occurring. It also allowed them to engage in more sustainable practices. He added however that although some farmers continued to live in poverty, increasing the demand for fair trade products can augment the economic benefits that small farmers experience.
Impact of Fair Trade In Kenya
Another example of a study done about the impact was on farmers in Kenya. The researchers compared the status of farmers with product that have certification to those without. There results were similar to the first study mentioned. The farms were successful in diversifying the products on their farms. They were also able to experience a drop in child mortality rates and improve the household’s monthly food consumption.
Impact of Fair Trade In Nicaragua
Another study done was on small-scale coffee farmers in Nicaragua. Farmers were currently experiencing problems with their livelihood considering that Nicaragua had changing government structures and corporate concentration. There was oversupply but farm gate prices were low. The study showed that if their coffee was certified, such vulnerability to changing conditions was reduced. It also enabled farmer to practice a bottom-up approach to management.
Studies Confirm Notion On Fair Trade
These are just a few of the many studies conducted. The results however showed that there was an impact of fair trade act and it was a good and a very beneficial impact. The studies confirm our notion that fair trade is indeed beneficial to farmers and workers in developing countries. While some remain in poverty, increased awareness of people buying fair trade products could help lessen this number in the coming years.
In applying the standards to small-scale producers and the workers, ‘FLO International’ sets three common fair trade principles to follow. Each of these areas is necessary if the practice of the fair trade act to succeed.
These 3 principles are in the areas of:
- Economic Development
- Environmental Development
- Social Development.
The First Fair Trade Principle
– Economic Development
Under the principle of economic development, for any goods or products to be certified as fair trade products it requires buyers to pay the minimum price and, in some cases, the fair trade premium, to the producers. The goal of the minimum price is to help the producers cover the cost of the sustainable production. The premium is to be used as capital and invested in improving the lives of the workers and the producers alike. This is done through investments in health, environment, and education, among many others. To ensure that the amount is used correctly, it is the workers who decide what to prioritize. They are also the ones charged with managing the amount obtained from the premium, this empowers the workers and the producers.
The Second Fair Trade Principle
– Environmental Development
The principle relates to environmental development. Workers and producers alike must ensure that their products are grown using sound and environment friendly agricultural methods. These include minimizing on the use of agrochemicals, maintaining the fertility of the soil and the water resources, and managing waste properly. The most important however is that producers never use genetically modified organisms. Though the FLO International does not require organic certification, doing so ensures that the producers will be able to sell their products at higher minimum prices.
The Third Principle
– Social Development
Social development is just as important as the other two. Standards require producers to have an organizational structure that will allow them the ability to directly bring their products to the market. It is also important that everyone involved in the production has a say on the decision-making process and it is encouraged that everyone participate when such activities are done. In addition, the organization must be set-up in a way that there is transparency and there is no discrimination.
The Heart of the Fair Trade Definition
The principles are stated in general terms in order to allow for flexibility to the producers and the farmers. This is more effective since being too specific may result in the producers not being able to understand and meet the guidelines. These three principles are the heart of what fair trade is all about, it is important not only for producers but also for buyers to always remember it.
I’ll be honest fair trade shoes, when I first heard about it seemed really ridiculous. I had heard of fair trade products, fair trade clothing and coffee and lots of other things, but they weren’t related to fashion or shoes for that matter at all. However the more I thought about it the more I thought that shoes and footwear were prime offenders in the ethical products scheme of things. Shoes are more often than not made in factories with poor conditions for their workers and extremely low pay and even dangerous conditions for the workers. Also with unsustainable practices that harm the environment and the communities in which the factories and manufacturing plants are based.
Fair Trade is Good For the Planet
From production methods right through to materials used, fair trade shoes are considered a great solution to making sure your footwear choices are good for the planet both from an environmental perspective and from a humanitarian perspective.
Producers of Fair Trade Shoes
Shoes are often made by some of the poorest countries in the world, the programs are designed to help further fund these shoes manufacturers into developing their trading structures and practices but must adhere to strict humanitarian and ethical standards.
So if you’re out shopping for a new pair of shoes, I hope this article has helped you understand how your purchasing decisions can have a global impact for the better, consider purchasing a pair of fair trade boots, shoes or even slippers.