How does Fair Trade work?


About Fair Trade

Fair Trade in context



" People see it as charity, but it is not, it is justice. We have to get rid of the charity way of thinking. I see Fair Trade as doing two things: one, it is helping people immediately and changing their lives; then, there is the bigger picture where it is a protest tool, a way of registering your vote. But now we are not boycotting something, we are supporting something positive.”

Bruce Crowther, Fair Trade Towns Co-ordinator, Fairtrade Foundation (2003) as quoted in Nichols and Opal p.4



Photographed by Piper O'Sullivan, North India 2006


How does Fair Trade work?

Businesses that would like to adopt Fair Trade practices have to purchase certification licenses. The international Fairtrade Labeling Organization (FLO) sends representatives to the farms from which the products are purchased and ensures that the farmers adhere to the procedures outlined in the Fair Trade standards. FLO or one of its 19 National Initiatives (NI), also audits the supply chain for the product to ensure that the Fair Trade prices have been paid. After successful completion of the process, the product is certified and the Fair Trade label can be displayed on it. Products marked by the Fair Trade label contain 100% Fair Trade certified contents.
The importer and the processor have to pay the costs for acquiring the license. The farmer himself does not have to carry the burden. However, it is worth noting, that some co-operatives encompass all these functions, therefore indirectly the farmer does end up paying. The FLO as well as its NI are registered nonprofit organizations. They are constantly being monitored by an independent Boards of Trustees. Therefore, consumers can be quite certain that these organizations adhere to their standards as impartial and nonpartisan.

Back to top


How can I be sure to buy Fair Trade products?

Fair Trade products have to undergo a rigorous testing to acquire the certificate. This works through a process of third-party auditing and certification. The Fair Trade system certifies as of now agricultural products, such as coffee, bananas, tea, sugar, rice, and fresh fruit. A slightly different system is used for handicrafts. Importing organizations for handicrafts such as Ten Thousand Villages have to register with the Fair Trade Federation, which requires them to uphold a related but different set of standards to what is explained above. When a product is branded with the Fair Trade Certified label, you know for sure that the Fair Trade standards have been met.

Back to top


What is the consumer’s role in the Fair Trade movement?

In Europe for example, the Fair Trade movement has been instrumental in building up consumer pressure on coffee and banana companies to stop using forced and child labor and to examine their business practices, etc. Therefore, the conscious decision to pay for Fair Trade products sends a message to competing companies.

Back to top

Send feedback to
  Links, Contact