Creating An Alternative World By Buying Fair Trade

By Theresa

The introductory post on our Alternative World section already recommended buying fair trade products as one of many potential actions for a people-and-planet-friendly lifestyle. In today’s world most of us are consumers – and can take influence by making informed choices about our consumption. This post presents you to the idea of fair trade and tries to share a glimpse of the movement behind it. Think about how companies instrumentalise their employees and contractors, exploit finite resources and leave the costs of their actions to be paid by the public. It is easy to get lost in the labyrinths of problems, searching for root causes and consequences, right? Coming from academia where problems are analysed and issues debated, I have the urge to place greater focus on solutions. Fair trade is an alternative way of trading. There is no one-size-fits-all model – just as there is not one kind of producers and not one sort of consumers, let alone one box for ‘developing country’ and another for ‘developed country’.

The idea of fair trade is not new. It is usually traced back to the 1970s and 1980s as in the official overview by the World Fair Trade Organisation, others date it back to the 1940s just after World War II. Actually, every fair trade association and company has its own history, such as Equal Exchange in the US. I encourage interested souls to go on their own hunt online or in the coffee shop around the corner.

What Is My Angle?

In my never ending quest to be transparent about my perspective and my sources, I need to state: the main idea to write a mini-series about fair trade stems from my volunteering work at the Weltladen Bonn.

Weltladen Bonn is an independent shop in a small German town offering more than 1,000 fair trade products (in my third post on fair trade I’ll explain why I mentioned that it is ‘independent’ so stay tuned in). From the outside it may look like an ordinary shop, but behind the scenes there is no paid staff. Instead, around 40 volunteers dedicate parts of their spare time. Some buy fair trade food (coffee, tea, spices, cereals, pasta), clothing, shoes, tableware and handicrafts from fair trade companies or directly from suppliers. Others including me place these goods into shelves and sell them (without increasing the price for a profit margin! That’s why we are volunteers). And yet another group of people gives their time by organising lectures, discussions and other educational events to inform more people about fair trade.

This comprehensive presentation does not illustrate how the typical fair trade shop looks like. There is no typical fair trade shop! Instead, you find great diversity in approaches and people in the global fair trade movement. The main reason may be that the term ‘fair trade’ is not legally protected anywhere. I stand to be corrected (via bizolutioners’ email or in the comment section below), but existing ‘fair trading laws’ usually apply as concepts of national commercial law, not in the broader picture of sustainable and change-inducing transnational trade. For Germany, anybody could claim any good to be produced by fair standards as this video shows.

There are other fair trade shops run by volunteers organised in a nation-wide association for fair trade, and several commercial companies focussing for instance on fair clothes. They are distinct from the fair trade done in other European countries, and from other countries worldwide – yes there are also places selling fair trade outside of countries of Western affluence! Just as the worldwide spread of shops indicates, there is a global movement behind fair trade. Before talking about that, this post will explain its understanding of fair trade.

What Is The Concept Of Fair Trade?

Fair Trade is defined by the World Fair Trade Organisation and the labelling company Fairtrade International as

 “a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers – especially in the South. 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 international trade.” [Charter of Fair Trade Principles, page 6]

This definition is given life by the core principles in the Charter of Fair Trade Principles. From the perspective of Business and Human Rights three characteristics of fair trade are particularly noteworthy:

N° 1 Producer Is King

In the fair trade system, the livelihood of producers takes centre stage – without turning producers into recipients of charity. Usually, trade focuses on squeezing that number on the price tag as hard as possible. The objective is to lower the price all along the supply chain from the money paid to the producer by the next intermediate buyer, over all successive prices for the subsequently refined good until the ultimate stage. There the price tag for the end consumer is supposed to carry as small as possible a number ‘to stay competitive’. Exceptions exist: brands where ‘logic’ (social pressure?) dictates that it may cost more than a no-name substitute. I am not going to delve into this, but recommend questioning your own desires for buying well-known brands: why this product? And not any other?. The official story is that companies act according to the principle ‘customer is king’. In contrast to this, the idea of fair trade places the producer at its core.

It is one of the criteria of fair trade as defined in the Charter of Fair Trade Principles to cut the supply chain short and have goods to be produced in small cooperatives usually excluded from international markets. There, individuals decide firstly in a democratic way among each other how to produce and how to manage resources and income. Then, they negotiate the selling price at an eye level with buyers. Noteworthy, the workers decide what they produce – usually traditional goods made with little to no impact on the local environment.

N° 2 Holistic Understanding Of Costs

The Charter of Fair Trade Principles also stipulates: the economic transaction between buyers and sellers aims at considering all costs of production – direct and indirect expenses. Indirect expenses include the need to preserve natural resources, and to conduct investments in the future. Therefore, the price paid for the good is pre-set and is not adjusted according to the international market price. This is crucial like in the case of coffee growers during the coffee crises.

N° 3 More Than Exchanging Goods Against Money

The holistic understanding of costs renders the individuals in the trade and their different needs visible. Consequently, fair trade is about people – instead of merely buyers and sellers – entering a mutually beneficial relationship with each other. All trade relationships aspire to be long-term. This creates the trust necessary to negotiate at eye-level – and to make investments like learning new methods or changing crop. To the latter end, the fair trade organisation interested in buying goods offers technical assistance. Producers also receive financial support from the beginning. The extra money is crucial since reforms of production processes are costly. For instance in organic agriculture, it may take one if not several years before the change reaps income.

How Can You Be Sure It Is Not Yet Another Marketing Trick?

Underlying these and all other principles of fair trade is the objective to create an alternative trading system. In this alternative system, workers are not pressured by powerful company representatives to produce a set amount to a set price for a set date. They negotiate the conditions and the price of their work with the buyer.

How is the adherence to fair trade standards guaranteed? External certifiers tasked by the World Fair Trade Organisation and the Fairtrade company monitor that all fair trade criteria are respected. In line with the ever changing circumstances of living and producing in a community monitoring includes continuous cycles which also contain recommendations for further improvements (stay tuned for the difference between the World Fair Trade Organisation and Fairtrade in my next post!).

What Is The Fair Trade Movement?

At second sight it is also the consumers who control that fair trade holds its promise. Rember the long quote? There it said “Fair Trade Organizations, backed by consumers, are engaged actively in supporting producers (…)“. Refusing to buy products which involve human rights violations like forced labour, or cause harm to the environment is very distinct from the bargain hunter to which many companies cater. Many fair trade consumers are aware that everything they consume has been produced by somebody somewhere and that this production process has had social, economic and environmental impacts. Even if these impacts are invisible to them – the end consumer. They care enough to ask questions and to discuss with others whether a product is really as social and green as it claims to be. Some donate money or work for NGOs on the topic, and incite media to scrutinise fair trade organisations.

© Max Havelaar France

© Max Havelaar France; picture taken by Theresa from a take-away postcard

There is a school of thought holding that every time you spend money, you vote. You vote for this company and its practices by supporting them financially. Just as you donate for a certain organisation and want them to succeed in their actions, you also want the company whose products you buy to continue their practices: even if their practices are harmful to your fellow beings and the planet as a whole. The advertisement campaign of the French Fair Trade company Max Havelaar France reminds me of this way of thinking (note: the postcard  may actually make a different point. It stipulates that consumers have the power to choose and that what they buy has an impact on other people at a different place in this world; the card says in French “choosing is committing yourself”; more information on the campaign).

In my human rightsy-heart I agree with the statement on voting by buying. Following the stylised idea of the market propagated in economics courses, it assumes that demand creates supply. For many non-essential products this rings true.

In our perfectly imperfect world, however, I cannot fully endorse this perspective for two reasons: even in relatively well-off countries in the Western hemisphere, many people cannot afford buying fair trade products – like when you are stuck job-hunting, or studying or can barely make ends meet with your current income. Or fair trade shops are simply not accessible in the place where you live. Maybe you are in a position to order fair trade products online? Or you might discover that this would lead to higher CO2 emissions than buying local products. And/or you live in a part of this world where you need to wrestle with postal service to get deliveries. Telling people that they vote for a company exploiting fellow humans and our planet without offering tangible alternatives is pure shaming, and depressing. It could even back-fire against any willingness to question one’s consumption habits. Working in a fair trade shop my greatest respect goes out to all those customers who do not have huge incomes, but organise their budgets so they can afford fair trade products. Even though it means they must consume less goods in total. Not entirely unrelated: many customers, especially coffee-lovers, quote quality as one of the main reasons for their purchase decision.

Just as Fair Trade is more than giving money for goods, you can also join the fair trade movement without becoming a consumer. You could simply decide to not consume specific luxury items like well-advertised black soda or no-brand products instead of buying from a company pursuing the privatisation of water.

As stated in the long quote above “awareness raising” – educating more people about the idea of fair trade – is at the heart of this movement. If you are lucky and live in a place where there are already initiatives, go and check them out – or create one if your time allows for it. If you happen to come across a volunteer-based project, your chances are high that they welcome with open arms any skill, knowledge or connection you have. Others convince their colleagues at work to switch to fair trade coffee and tea, and buy these products on the office bill. If you are not able to volunteer and have no office full of coffee drinkers, there are still many public events like the Fairpride festival in Paris and the World Fair Trade Day.

The next posts will present the two different channels which bring fair trade products to consumers in accordance with the idea of ‘fair trade’ defined by the World Fair Trade Organisation and other fair trade institutions. Meanwhile: ask google, go out and find fair trade where you live.

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