Introduction
Coffee Supply Chains
The Coffee Crisis
Cooperatives
Fair Trade Certification
What Can You Do?
Links
Contacts
 

What is Fair Trade?

Fair Trade is the idea that the people that make goods that you buy get a fair price for the goods that they make.

Definitions

Producer:(n.) person or group of people that makes products that are used by consumers.
Consumer: (n.) entity that buys and/or uses products
Good: (n.) any kind of product that is bought or sold
Developed world: (n.) includes most of North America, Europe, and Japan
Cooperative: (n.) democratically organized group of people who come together to do business in greater numbers
Cost: (n.) Price paid for a product or service

Many people around the world that make the goods you consume are barely able to make ends meet after they pay for food and shelter for themselves and their families.

Fair Trade is also known as Alternative trade. Producers organize into cooperatives and sell their product to Alternative Trading Organizations (ATOs) in the developed world. These ATOs package the product for you to buy and stamp the product with the label "Fair Trade". When you see that label or hear the words "Fair Trade", that is a signal to you that much more of the money you pay for that product is going back to the producer.

Alternative Trade Organizations are able to send much of the money made on the sale of goods back to the producers because they keep costs down. Fair Trade cuts out many middlemen. Middlemen can raise the cost of a product significantly.

Producers also have to abide by certain criteria to be able to keep labelling their products "Fair Trade." They must pay their employees a fair wage. They must abide by environmental standards. If producers do not abide by these rules, they lose the right to label their products "Fair Trade". The producers are watched on the ground by Fair Trade Labelling Organizations (FLOs) to make sure that they follow the rules.

Because producers are able to earn more from what they produce, they can reinvest that money back into their communities. They can use the money to dig wells or build pumps to provide for clean drinking water for the community, for example. Or they can use the money to pool together with others in the cooperative to provide health care. Or they can use the money to reinvest in their business to buy machines that they need, such as garden tools.