What is Fair Trade?

What is Fair Trade?

Here at Traidcraft, we know our stuff when it comes to all things fair trade. So, if you’re looking for fair trade information, fair trade facts, the history of fair trade, how to get involved in fair trade and the definition of fair trade, you’ll find all the information you need here. 

How do we know so much about fair trade, you may be thinking? Well, back in 1979, we pioneered the fair trade movement. Chocolate, coffee, tea, fruit juice, wine, rice, honey, charcoal, rubber… Believe it or not, but almost everything that we know today as being fair trade began with Traidcraft. That’s why we’ve bundled up four decades and more of fair trade information onto these pages for you.

The Definition of Fair Trade

Fair trade, defined simply, is when products including food, drink and craft, are sourced through a fair supply chain, where small-scale farmers, producers and artisans are treated with dignity, respect, equality and fairness.

Sourcing these items involves developing trading partnerships to help producers in developing countries achieve better trading conditions. Fair trade is when the price we pay for products such as food, drink, fashion and crafts, gives enough to producers to cover the cost of their products – and to have enough left over to invest in their farms, of businesses. It’s not just about survival, it’s about improving year on year and building resilience. And on top of that, they receive a "social bonus”, that can be invested in healthcare, education – in fact, whatever they think will bring their community the most benefit.

Fair trade was created as an alternative way of doing trade (find out a little bit more about the origins of fair trade in the UK in our timeline). It is based on partnership, which means that the interests of farmers and workers are just as important as other commercial considerations. It also represents a solution to poverty and a model for development. 

If you want to see fair trade in action, have a look at the fair trade goods we have on offer, and the stories behind them, too.

The Definition of Fair Trade

You may have noticed that we have been discussing what fair trade means, we’ve been using the term ‘fair trade’ as two words. Before going any further into what fair trade means, it is important to understand the differences between fair trade and Fairtrade. Here are the definitions of both.

Fairtrade (One Word)

Fairtrade is an international standards and certification system in which producers and buyers agree to uphold certain minimum standards and payments and in return their product can be labelled with the Fairtrade Foundation’s Fairtrade Mark. Think of it as a kind of “organic” system for the way buyers and farmers behave. See more on Fairtrade labels in our article.

These social, economic and environmental standards are for both companies and the farmers and workers to adhere to. For companies, these standards include payment no lower than the Fairtrade Minimum Price and an additional Fairtrade Premium to invest in business or community projects of the community’s choice. As for the farmers and workers, the standards include the likes of product quality and environmentally friendly farming practices.

Fair Trade (Two Words)

Fair trade, written as two words, means that something has been fairly traded, often above and beyond the minimum standards which Fairtrade sets. The Fairtrade Mark ensures that these minimum standards have been observed, which is of course a great start. Companies like Traidcraft, however, have a more nuanced view which focuses not on a set of minimum standards, but on a holistic approach to food. We deliberately only buy food from smallholders (farmers who own their own land) and not from plantations which are often owned by mega-corporations. We focus on organic produce wherever possible and on good food quality.

Our philosophy extends to how we treat our own staff, the rights of non-discrimination, self-organisation, for opportunities to train ourselves and for the pay gap between top and bottom to be no more than a factor of 2.6. This is all embedded in what fair trade (written as two words) always set out to achieve.

These 10 Fairtrade Principles are as follows:

  • Creating Opportunities for Economically Disadvantaged Producers: Poverty reduction by making producers economically independent.
  • Transparency and Accountability: Involving producers in important decision making.
  • Fair Trading Practices: Trading fairly with concern for the social, economic and environmental well-being of producers. 
  • Payment of a Fair Price: Paying producers a fixed price by mutual agreement, ensuring socially acceptable wages depending on the location.
  • Ensuring no Child Labour and Forced Labour: Adhering to the United Nations (UN) Convention on children’s rights.
  • Commitment to Non-Discrimination, Gender Equity and Women’s Economic Empowerment and Freedom of Association: Respecting the trade union rights and rejecting discrimination based on gender, religion or ethnicity.
  • Ensuring Good Working Conditions: Providing a safe and healthy working environment for producers and workers in line with the International Labour Organization conventions.
  • Providing Capacity Building: Seeking to develop the skills of producers and workers so they can continue to grow and prosper.
  • Promoting Fair Trade: Raising awareness for the need of greater justice in world trade by trading fairly with poor communities.
  • Respect for the Environment: Caring for the environment by maximising use of sustainable energy and raw materials while minimising waste and pollution.

What are the Benefits of Fair Trade?

Fair trade, written as two words, means that something has been fairly traded, often above and beyond the minimum standards which Fairtrade sets. The Fairtrade Mark ensures that these minimum standards have been observed, which is of course a great start. Companies like Traidcraft, however, have a more nuanced view which focuses not on a set of minimum standards, but on a holistic approach to food. We deliberately only buy food from smallholders (farmers who own their own land) and not from plantations which are often owned by mega-corporations. We focus on organic produce wherever possible and on good food quality.

For producers, farmers, growers and artisans, fair trade offers many advantages: 

  • Producers are given enough to cover the cost of their products/materials – and to have enough left over to invest into the improvement of their farms/workplaces. The additional “social bonus” can be invested in healthcare, education and other forms of strengthening their communities.
  • Trading partnerships are developed, to help producers in developing countries achieve better trading conditions for now and the future.
  • They are given market access that enables buyers to trade with producers who may have otherwise been excluded.
  • Everyone throughout the supply chain is treated with dignity, respect, equality and fairness.
  • Producers are empowered to understand more about market conditions, as well as developing their skills, knowledge and resources, allowing them to thrive. If you want to discover the definition of fair trade, answer the question ‘what is fair trade?’, or uncover 10 facts about fair trade, then you are in the right place. Read on for everything you need to know about fair trade, from the pioneers of fair trade itself!

Key Principles of Fair Trade

  • Trading practices are fair and not one-sided.
  • Prices paid are fair and sufficient for producers and workers to earn more than enough to meet their day-to-day needs. 
  • Payments are often made in advance to ensure the supplier can fulfil orders.
  • Producers and workers have a voice, whether organised into groups or involved in workplaces where there is freedom of association.
  • Safe working conditions, non-discrimination and welfare of children. 

The Wider World of Fair Trade

Fair trade has grown enormously since its origins. There are lots of organisations throughout the world whose philosophy, mission and values are aligned with Traidcraft’s. We call ourselves Fair Trade Organisations (FTOs) and often work together. 
Traidcraft is a member of two larger membership organisations: 

The European Fair Trade Association (EFTA), which is a group of like-minded FTOs in Europe, collaborating in product development, purchasing and a whole range of other things. 

The World Fair Organisation (WFTO), which is a larger global membership body of FTOs and importantly includes membership in the global South – in other words producers from Africa, Central and Latin America and Asia who are seeking to benefit from Fair Trade.

We are very mindful of our heritage here at Traidcraft and being co-founders of the world fair trade movement could either mean a weight on our shoulders to uphold the original vision in all its glory, or a liberating sense of freedom to carry on breaking the normal rules of trade, whenever and wherever we can. We prefer the latter; guarding the flames, not tending the ashes.

How Can I Get Involved in Fair Trade?

There are many exciting ways to support the fair trade movement and get involved with Traidcraft, so why not start today? Firstly, you may be looking to buy fair trade products for your school, church, workplace, shop or stall, or you may be hoping to participate in fundraising. Alternatively, you can support fair trade by getting involved in many events throughout the year, including Fairtrade Fortnight, and you require fair trade resources. If any of the above apply to you, you’ll find just what you need here.

Fair Trade Facts: 11 Things You Didn’t Know About Fair Trade

  • The World Fair Organisation (WFTO), which is a larger global membership body of FTOs and importantly includes membership in the global South – in other words producers from Africa, Central and Latin America and Asia who are seeking to benefit from Fair Trade.
  • The World Fair Organisation (WFTO), which is a larger global membership body of FTOs and importantly includes membership in the global South – in other words producers from Africa, Central and Latin America and Asia who are seeking to benefit from Fair Trade.
  • Fair trade products are sold in over 120 countries across the world.
  • Fair trade started in 1946, in the United States, where Ten Thousand Villages (formerly Self Help Crafts) began buying needlework from Puerto Rico, and SERRV began to trade with poor communities in the South in the late 1940s. The first fair trade shop which sold these and other items opened in 1958 in the USA.
  • Garstang was the first town in the world to achieve Fairtrade status. Over 600 communities across the UK have since followed suit.
  • Some items, such as fish, cannot be certified by the Fairtrade Foundation as there are no set standards, and therefore cannot carry the Fairtrade Mark.
  • The first fair trade label was used in 1988. It was created by a Dutch organisation who were selling fair trade coffee. The label was called Max Havelaar after a character from a novel written in the 19th century. Max Havellar was a bit like our Robin Hood.
  • If you see the Fairtrade Mark with an arrow next to it, it means to look on the back of the packaging to learn more about the ingredients and sourcing method. All the ingredients that are available under Fairtrade standards have to be Fairtrade (e.g., all the cocoa, sugar and spice). The minimum total Fairtrade content is 20% but many companies, such as Traidcraft, go above and beyond that. Why not check out the percentages of Fairtrade ingredients on your next purchase?
  • The Fairtrade Foundation licenses the Fairtrade Mark to over 6,000 types of products in the UK; including coffee, tea, fruit, flowers, juice, wine, sugar, herbs, spices and so many more.

Fair Trade Questions

We deal with all things fair trade, all day every day; it’s our job to be able to answer all of your questions. If you have a question about anything regarding fair trade, such as:

  • ‘What are Fairtrade labels?’
  • ‘Does fair trade ensure a better life for people?’
  • ‘How did fair trade in the UK start?’
  • ‘How can I be sure I'm buying fair trade?’
  • ‘What is fair trade palm oil?’, we’ve got the answers. 

If you have a question we haven’t answered, do get in touch! We’re a friendly bunch and will be happy to help!