Understanding Fair Trade Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers. Fair Trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional trade. Now that’s fair.

Fair Trade aims to give disadvantaged small producers and workers more control over their own lives. It addresses the injustice of insufficient income for a decent living and insufficient market access by guaranteeing that producers receive fair terms of trade and fair prices or wages. Most importantly, Fair Trade offers small producers the power to negotiate and the consumer a powerful way to participate in livelihood enhancement of the producers through their everyday buying.

Fair Trade principles:

• Creating opportunities for economically disadvantaged producers 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. • Transparency and accountability Fair Trade involves transparent management and commercial relations to deal fairly and respectfully with trading partners. • Capacity building Fair Trade is a means to develop producers’ independence. Fair Trade relationships provide continuity, during which producers and their marketing organizations can improve their management skills and their access to new markets. • Promoting Fair Trade Fair Trade Organizations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organization, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packing. • Payment of a fair price A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair Traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing. • Gender Equity Fair Trade means that women’s work is properly valued and rewarded. Women are always paid for their contribution to the production process and are empowered in their organizations. • Working conditions Fair Trade means a safe and healthy working environment for producers. The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play and conforms to the UN Convention on the Rights of the Child as well as the law and norms in the local context. • Child Labour Fair Trade Organizations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organizations working directly with informally organised producers disclose the involvement of children in production. • The environment Fair Trade actively encourages better environmental practices and the application of responsible methods of production. • Trade Relations Fair Trade Organizations trade with concern for the social, economic and environmental well-being of marginalized small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. An interest free pre payment of at least 50% is made if requested.

The role of IRFT in Fair Trade:

• Plays a stewardship role in propagating the principles of Fair Trade. • Promotes the principles of fair trade to all stakeholders along the supply chain through Capacity Building and long-term process Training • Will steer all efforts to mainstream Fair Trade in India and help further build partnerships of a wider fraternity in the larger interests of a unified, credible Fair Trade movement in India and beyond. • Develops Communication strategies to address different fora/ events/fraternity meets on Fair Trade, working in partnership with Fair Trade networks like FTFI, and its partners as a Group/Body, unified as Fair Trade change agents. • Takes a lead role in Fair Trade awareness at all forums and represent all Fair Trade partners, equally and fairly in the interest of a unified Fair Trade movement in India. IRFT assumes responsibility for creating plausible messaging with conviction, aimed at consumers to ensure that Fair Trade buying is not just an emotional buy, bordering on a fad or whim, but a long-term commitment to Fair Trade products. • Will continuously evolve simple acceptable and credible messaging to ensure a common man understanding of ‘Fairness in Trade and what it represents and how it affects his decision to make a change in buying. • IRFT will ensure that its Community Business Programme (CBP) and Ethical Business Programme (EBP) will be woven into the Fair Trade principles and its propogation at every step of the way, thereby addressing wider areas of awareness, through each of our stakeholders. • Is working harmoniously with funding organizations to ensure clear cut roles, responsibilities and deliveries as committed, and meet deadlines set by the projects.

FAQ

What is the history of Fair Trade? The international fair trade movement began in the 1940's when US and European churches began selling handicrafts made by European refugees after World War II. In the 1960’s and 1970’s, Alternative Trading Organisations (ATOs) and “World Shops” began to offer an alternative to conventional trade by offering higher returns to producers in the developing world through direct trade and fair prices. Today, many ATOs are members of The World Fair Trade Organization (formerly IFAT), an association of fair trade wholesalers, retailers, and producers whose members are committed to providing fair wages and employment opportunities to economically-disadvantaged artisans and farmers worldwide. Fair trade certification of agricultural commodities began in The Netherlands in 1988 in response to plummeting prices in the world coffee market. Through certification of “fair trade” business practices, fair trade certifiers aimed to infuse conventional supply chains with fair trade principles. Today, several Western countries have their own certification organizations which share certification criteria under the umbrella of Fairtrade Labeling Organizations.

What is the history of the domestic Fair Trade program in India? In the era of globalisation and open markets, small producers find it increasingly difficult to compete internationally; as a result, producers are forced to cater to local markets which are overcrowded and exploitative. Fair Trade has been the beacon of hope for marginalized producers, helping them develop skills, access markets, better price and sustainable livelihoods through the trading relationship. However, Fair Trade markets in the West have not been growing in proportion to the requirements of poor producers and there is a need to expand markets. With its focus on fair wages, fair treatment, long-term business relationships and more, Fair Trade has great potential to serve Indian producers and the Indian market. With a population of over 1 billion, and a growing middle class, India offers a huge opportunity for change – a market waiting to be tapped. The Fair Trade movement has great potential to tap the domestic market, which would benefit small producers and community businesses. IRFT and Traidcraft, at the helm of a multi stakeholder initiative, to launch the India Fair Trade Label respecting Fair Trade standards within the Indian context. The project PROFIT (Promoting Fair Trade in India) along with European Commission and Belgium Technical Cooperation (BTC) have supported the initiative to launch Fair Trdae market within India and thereby increase the ability of the pro- poor micro and small enterprises (SMEs) and their producers to benefit equitably from trade. Shop for Change (SFC), under section 25, not for profit company was established as a standard setting organization and a certification body that would eventually established a basket of fairly traded products under the brand label SFC. The first product has been launch on 7th January 2010. Trace this event on our event page.

Who really benefits from Fair Trade? For producers, Fair Trade ensures a sustainable livelihood, by engaging producers to build their capacity and work towards their long term profitability. This is possible by empowering the producer to negotiate along the supply chain, so that he establishes his right to a fair price. For workers hired by producers, the Fair Trade system helps secure healthy and safe working conditions, fair pay, and a working environment free from discrimination and harassment. For producer organisations, the Fair Trade system rewards strong collaboration with individual producers, facilitates identification of key needs and priorities for capacity building, and then helps ensure resources to address those needs over time. The harmony in fair trade for producer organization lies in the long term association with producers contrary to conventional trading, where the buyer would need to look at monitory returns more on short term basis. Thus a trading relationship doesn’t exist. For buyers and brand owners, the Fair Trade system helps identify reliable sources of responsibly produced products which hold a differential value as being directly responsible for sustainable livelihood development of producers, while meeting fair trade standards every step of production process. This will create a brand identity that for the first time represents both social and environmental value system attached to the brand. Adding value to already established brands can ensure wider market share.

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