Introducing Fairtrade

Fairtrade is an alternative approach to conventional trade and is based on a partnership between producers and consumers. When farmers can sell on Fairtrade terms, it provides them with a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future. Fairtrade offers consumers a powerful way to reduce poverty through their every day shopping.

When a product carries the FAIRTRADE Mark it means the producers and traders have met Fairtrade Standards. The Fairtrade Standards are designed to address the imbalance of power in trading relationships, unstable markets and the injustices of conventional trade.


Why is Fairtrade a necessity?

In Asia, Africa and South America many small-scale farmers are in constant uncertainty about their income. The strongly fluctuating world market determines that the crop yield is often so low that farmers are unable to support their families. Without a reliable income, they cannot invest in their company, in the future of their children or in their community. This is how poverty is maintained. Fairtrade breaks this vicious circle.

In addition to small-scale farmers plantations can also qualify for certification. The Fairtrade standards are aimed at a better life for the workers.

The Standards

There are distinct sets of Fairtrade Standards, which acknowledge different types of producers. One set of standards applies to smallholders that are working together in cooperatives or other organizations with a democratic structure. The other set applies to workers, whose employers pay decent wages, guarantee the right to join trade unions, ensure health and safety standards and provide adequate housing where relevant.

Fairtrade Standards also cover terms of trade. Most products have a set Fairtrade Minimum Price, which is the minimum that must be paid to the producers. In addition producers get an additional sum, the Fairtrade Premium, to invest in their communities or businesses.

Fairtrade Minimum Prices

The minimum price paid to Fairtrade producers is determined by the Fairtrade Standards and Pricing Unit. It applies to most Fairtrade certified products. This price aims to ensure that producers can cover their average costs of sustainable production. It acts as a safety net for farmers at times when world markets fall below a sustainable level.

When the market price is higher than the Fairtrade Minimum Price, the buyer must pay the higher price. Producers and traders can also negotiate higher prices on the basis of quality and other attributes.

The Fairtrade Premium

In addition to the price paid for the product, there is an additional sum of money, called the Fairtrade Premium, that farmers receive for products sold on Fairtrade terms. This money goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions.

The use of this additional income is decided upon democratically by producers within the farmers’ organization, or by a workers' committee on a plantation. The Premium is invested in education and healthcare, farm improvements to increase yield and quality, or processing facilities to increase income.

As many projects funded by the Premium are communal, the broader community, outside the producer organization often benefits from Fairtrade.

Who is who?

The international Fairtrade system includes three producer networks, 25 Fairtrade organizations, Fairtrade International, and FLOCERT, the independent certification body of the global Fairtrade system.

Fairtrade International (FI)

Fairtrade International is the organization that coordinates Fairtrade labelling at an international level. From our offices, in Bonn, Germany, we set international Fairtrade standards, organize support for producers around the world, develop global Fairtrade strategy, and promote trade justice internationally


FLOCERT is the independent certifier for Fairtrade. By checking compliance with Fairtrade Standards, the company ensures that the relevant economic, social, and environmental standards are met and that producers receive the Fairtrade Minimum Price and Premium.

FLOCERT auditors are highly qualified, usually based in the countries and regions where they work, and familiar with local cultures, languages, and legal systems. All auditors are examined on their skills and receive annual training.

Consumers can be confident that the international FAIRTRADE Marks are only used on products that meet the international Fairtrade Standards, and benefit Fairtrade certified farmers and workers. www.flo-cert.net

National Fairtrade Organizations (NFO)

National Fairtrade organizations license the FAIRTRADE Certification Mark on products and promote Fairtrade in their territory. As founding members, many of these organizations helped to establish Fairtrade International in 1997.

Producer Networks

Producer networks are regional associations that Fairtrade certified producer organizations may join if they wish. They represent small-scale producers, workers and other producer stakeholders.

There are producer networks in  three continents, Africa, Asia and Latin America and the Caribaions

Source: www.fairtrade.net