Fair Trade Fast Facts

Description of Fair Trade

“Fair Trade is a strategy for poverty alleviation and sustainable development.  Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalized by the conventional trading system.”  (International Fair Trade Association at www.ifat.org)

Principles of Fair Trade

Criteria for Fair Trade vary somewhat, depending on the group and the products on which the groups focus (primarily agricultural products versus handcrafted items), but Fair Trade organizations generally hold six principles in common:

1) Ensuring that producers receive a fair price for their products, one that covers all costs of production, including a fair wage.  Fair wages are determined through conversation and reflect the local costs of living.

2) Guaranteeing fair labor conditions:  safe working environments, gender equality in pay, elimination of slave and forced child labor (or any child labor which harms children).

3) Transparent, accountable and democratic organizations and practices, including increasing producers’ independence through training and resources that develop the capacity of workers to manage their own enterprises.

4) Encouraging investment of some portion of producer profits in local community development:  education, health resources, safe water supply, preservation of local habitats, etc.

5) Direct trade between producers and consumers, with as few middlemen as possible, in order to return a reasonable proportion of the sales price to producers and create reasonable consumer prices despite the potentially higher costs of Fair Trade principles.

6) Encouraging practices that promote environmental sustainability.  This principle is most fully embodied by producers engaged in agriculturally-based Fair Trade.

History

* Fair Trade began in the late 1940’s when the Mennonite Central Committee (MCC) and the Church of the Brethren developed fair trade supply chains, including retail channels, for handcrafted items from developing countries.

* In the 1960s, the movement gained increasing recognition as it took further shape throughout Europe and as Oxfam created the first Fair Trade Organization.

* Fair Trade gained international recognition in 1968 when the slogan “Trade not Aid” was adopted by the United Nations Conference on Trade and Development (UNCTAD) to emphasize the establishment of fair trade relations with developing countries.

* Fair Trade coffee from Guatemala was first sold in 1973 in the Netherlands as a renewable source of income.  Since then, Fair Trade tea, sugar and chocolate have been introduced across the world, with some regions outside the US also importing Fair Trade wine, fruit and fruit juices, nuts, spices, rice and more.

* To set and audit international Fair Trade standards for agricultural products, Fair Trade Labeling Organizations International (FLO) was created in 1997.  Currently, FLO audits and certifies producers in seven agricultural categories.

* In the 1980s, a priest working with Mexican farmers conceived of a Fair Trade-labeled coffee product to distinguish Fair Trade items on retail shelves.  Working with a Dutch, church-based NGO (non-governmental organization, the term in Europe for a nonprofit organization), he introduced the “Max Havelaar” label in the Netherlands in 1988.

* The 1980s and 1990s saw the development of a number of national and international organizations dedicated to the promotion of Fair Trade ideals and the development of Fair Trade supply chains.  A list of the most prominent is shown under “Key Fair Trade Resources” below.
 
Sales Facts

* Worldwide sales of Fair Trade goods totaled nearly $1.5 billion in 2005, up 37% from 2004. (1)
 
* In the US, sales of Fair Trade goods totaled $438 million in 2005, up 60% from 2004. (1)

* Fair Trade goods come from roughly 60 countries, primarily in Africa, Asia, the Pacific Rim, the Middle East, Central and South America. (1)

* An estimated one million people in developing countries are involved in producing Fair Trade goods.  An additional four million household members, five million in total, benefit financially from their labor. (1)

* Fair Trade is estimated at only .01% of all goods exchanged globally. (2)

* Roughly 2/3 of artisans providing Fair Trade handcrafted items are women, who are often the sole wage earners in their households. (2)

* Globally, nearly 34,000 metric tons of Fair Trade coffee were sold in 2005, up 40% versus 2004.  Wine and beer are the fastest growing Fair Trade food items internationally, growing at rates of 126% and 97% respectively. (1)

* Cotton is the newest agricultural product to be marketed under Fair Trade.  In 2005, its first year of Fair Trade sales, cotton sales amounted to 1402 metric tons. (1)

Key Fair Trade Resources

* Fair Trade Federation (www.fairtradefederation.org), or FTF, is a membership organization of traders (retailers and wholesalers primarily, though some producers are also members) committed to purchasing from Fair Trade vendors in developing countries and following fair trade principles and practices in their trading relationships.

* International Fair Trade Association (www.ifat.org), or IFAT, members span the supply chain from producer coops and associations to export/import operators to retailers, all of which are dedicated to Fair Trade principles and practices. 

* Fairtrade Labeling Organizations International (www.fairtrade.net), or FLO, works with Fair Trade groups to set overall Fair Trade standards and regional variations for farmers as well as to certify that each farmer meets those criteria.

* TransFair USA (www.transfairusa.org) monitors manufacturers/processors and importers of agriculturally-based products (coffee, tea, chocolate, etc.) to ensure that Fair Trade criteria have been met once the goods leave the farm.

(1) Fair Trade Labelling Organizations International at www.fairtrade.net
(2) Fair Trade Federation at www.fairtradefederation.org