Fair trade is a global movement that aims to improve the lives of farmers and workers in developing countries by ensuring that they have access to export markets and are paid a fair price for their products.
Fair trade also promotes social and environmental standards, such as decent working conditions, gender equality, and environmental protection. In this article, we will explore how fair trade helps developing countries in various aspects, such as economic, social, and environmental.
Table of Contents
Key Takeaways
- Fair trade helps developing countries by providing them with a stable and higher income, which can be invested in improving their livelihoods and communities.
- Fair trade helps developing countries by empowering them to have more control over their production and trade, and by giving them a voice in the global market.
- Fair trade helps developing countries by encouraging them to adopt sustainable and organic farming practices, which can enhance their productivity, biodiversity, and resilience to climate change.
How Does Fair Trade Help Developing Countries Economically?
One of the main benefits of fair trade for developing countries is that it provides them with a stable and higher income than conventional trade. This is achieved by setting a minimum price for fair trade products, which covers the cost of production and provides a living wage for the producers.
The minimum price also acts as a safety net when the market prices fluctuate or fall below the cost of production. In addition, fair trade pays an extra amount called the fair trade premium, which is a collective fund that the producers can use to invest in their businesses or communities.
For example, they can use the premium to buy better equipment, improve their infrastructure, access education and health care, or support social projects.
According to Fairtrade International, in 2019-2020, fair trade producers received over €200 million in premium money1. Some examples of how fair trade producers have used the premium are:
- In Colombia, coffee farmers used the premium to buy solar panels and water tanks to reduce their dependence on fossil fuels and improve their water management2.
- In Ghana, cocoa farmers used the premium to build schools and provide scholarships for children, especially girls3.
- In Kenya, tea farmers used the premium to establish a microfinance scheme that provides loans and savings services for their members4.
Another way that fair trade helps developing countries economically is by empowering them to have more control over their production and trade. Fair trade encourages producers to form cooperatives or associations, which enable them to pool their resources, share knowledge and skills, negotiate better prices and terms, and access larger markets.
Fair trade also supports producers to diversify their products and markets, which can reduce their vulnerability to price shocks and increase their competitiveness.
Furthermore, fair trade gives producers a voice in the global market, by involving them in the decision-making and governance of the fair trade system. For example, half of the board members of Fairtrade International are representatives of producer organizations5.
How Does Fair Trade Help Developing Countries Socially?
Fair trade also helps developing countries socially by promoting human rights, labor rights, gender equality, and community development. Fair trade has a set of social standards that all fair trade producers must comply with, such as:
- Prohibiting child labor, forced labor, discrimination, harassment, and violence
- Respecting freedom of association and collective bargaining
- Providing safe and healthy working conditions
- Ensuring fair wages and benefits
- Offering training and capacity building opportunities
- Supporting democratic participation and transparency
By adhering to these standards, fair trade producers can improve their well-being, dignity, and empowerment. For example,
- In India, cotton farmers reported improved health outcomes after switching to organic farming methods as part of fair trade certification6.
- In Sri Lanka, spice farmers reported increased confidence and leadership skills after receiving training on quality management and business development as part of fair trade certification7.
- In Peru, handicraft artisans reported enhanced self-esteem and recognition after participating in fair trade exhibitions and events8.
One of the key social aspects of fair trade is gender equality. Fair trade recognizes the important role of women in agriculture and handicrafts, and supports them to overcome the barriers they face in accessing land, credit, education, markets, and decision-making. Fair trade also encourages women’s participation in producer organizations and leadership positions. For example,
- In Uganda, coffee farmers formed a women’s committee that advocates for women’s rights and interests within their cooperative9.
- In Nepal, felt producers formed a women’s cooperative that provides them with income opportunities, skills training, and social support10.
- In Mexico, honey producers elected a woman as their president for the first time in their cooperative’s history11.
How Does Fair Trade Help Developing Countries Environmentally?
Fair trade also helps developing countries environmentally by encouraging them to adopt sustainable and organic farming practices that can enhance their productivity, biodiversity, and resilience to climate change. Fair trade has a set of environmental standards that all fair trade producers must comply with, such as:
- Minimizing the use of chemical pesticides and fertilizers
- Managing waste and water resources responsibly
- Conserving soil quality and fertility
- Protecting natural habitats and wildlife
- Reducing greenhouse gas emissions and energy consumption
- Adapting to the impacts of climate change
By following these standards, fair trade producers can improve their environmental performance, reduce their costs, and increase their yields. For example,
- In Tanzania, coffee farmers adopted agroforestry practices that increased their shade cover, soil moisture, and crop diversity12.
- In Ecuador, banana farmers reduced their pesticide use by 31% and their water use by 44% after joining fair trade13.
- In Burkina Faso, shea butter producers planted over 10,000 trees to restore their degraded land and provide them with food and income14.
FAQ
Q: What are some examples of fair trade products?
A: Some of the most common fair trade products are coffee, tea, cocoa, sugar, bananas, cotton, handicrafts, flowers, and gold. However, there are many other products that can be certified as fair trade, such as rice, quinoa, spices, nuts, wine, honey, cosmetics, and clothing.
Q: How can consumers support fair trade?
A: Consumers can support fair trade by buying products that have the fair trade label or logo, which indicates that they meet the fair trade standards and principles. Consumers can also look for information about the origin and impact of the products they buy, and choose those that are ethically and sustainably sourced. Consumers can also raise awareness and advocate for fair trade in their communities, schools, workplaces, and online platforms.
Q: What are some of the challenges and criticisms of fair trade?
A: Fair trade faces some challenges and criticisms from different perspectives, such as:
- The lack of agreement on what fair trade really means and how it should be certified, regulated, and verified
- The uneven awareness and availability of fair trade products across different regions and markets
- The limited impact of fair trade on the overall structure and dynamics of the global trade system
- The potential trade-offs between economic efficiency and social equity in fair trade
- The possible negative effects of fair trade on non-fair trade producers or consumers
Conclusion
Fair trade is a global movement that helps developing countries by providing them with a fair price, a fair premium, a fair market access, a fair voice, and a fair environment for their products.
Fair trade also helps developing countries by improving their economic, social, and environmental conditions, and by empowering them to have more control over their production and trade.
Fair trade is supported by millions of consumers, producers, organizations, and governments around the world who believe in a more just and sustainable way of doing business.
