What is Fair Trade?

What is Fair Trade?

Fair Trade is a process used by organizations around the world to make sure that they buy and sell farm goods that have been produced from farms that pay a fair price to their farmers and for their materials. The primary focus is on producers in developing countries, where there is a higher likelihood of underpayment. The goal of the fair trade movement is to ensure that all products from farming are paid for fairly.

The price of farmed goods is deemed as ‘fair’ by the Fair Trade movement when it allows the farmers and producers to enjoy a decent quality of life. The World Fair Trade Organization writes:

“Fair Trade is a tangible contribution to the fight against poverty, climate change and global economic crises.”

Usually, children will learn about ‘what is Fair Trade’ at KS2, although younger children will often take part in school events and charity initiatives such as food drives and awareness campaigns that schools hold for the Fair Trade movement. If you are introducing your class to Fair Trade, have a look at this Fair Trade Activity Pack to get them started. Also, make sure to read on through our teaching wiki for a pile of information about Fair Trade and some of the most well-known organizations within the movement.

Take a look at this informational video for help explaining what Fair Trade is at KS2:

What are the Core Principles of Fair Trade?

The Fair Trade movement developed as a ‘grassroots movement’, which means it involved many people and was not the invention of a single person. In the early days of Fair Trade, several principles were collected to ensure that the movement was on track and focused, these core principles are:

• "Trade not aid". This is a phrase that sums up the belief that people should be empowered to improve their circumstances through trade, rather than being reliant on charity from richer countries.
• All producers are entitled to safe and dignified working conditions, free from discrimination of any kind.
• To be considered Fair Trade, transactions must benefit all parties. Trading arrangements should be based on financial partnership, trust, and mutual growth.

Businesses in developed countries must take into account their social and ethical responsibilities when dealing with small producers, as well as commercial goals.

When Did Fair Trade Begin?

The Fair Trade movement was founded by Edna Ruth Byler in 1946.

One of the earliest supporters of a Fair Trade movement was Edna Ruth Byler, an American businesswoman, in 1946. She was visiting Puerto Rico on holiday and saw the local women selling needlework on market stalls and on the streets. She discovered that despite the beautiful work, they struggled to support their families.

To help, Byler bought as many of the items as she could and took them back home to Pennsylvania. She then sold the pieces to neighbours and friends, telling each of them the stories of the women that had made them.

In time, Edna Byler’s work grew, and she formed the first non-profit organization built on the principles of Fair Trade - Ten Thousand Villages.

Europe's Fair Trade Origins

In Britain, around the same time that Byler was building up her non-profit organization, Oxfam had started to work with Chinese refugees across Britain to promote Fair Trade and sell their products and crafts in its shops. This work expanded, and many more organizations soon joined in the movement. Oxfam has now been raising awareness of the Fair Trade principles for half a century.

Today, half of all money taken by Fair Trade organizations in the Northern Hemisphere comes from coffee sales. It is thought that hundreds of thousands of farmers across the world have benefitted from the initiative.

How Does Fair Trade Work Today?

Currently, there are well over a million independent producers and farmers that work with non-profit organizations to sell their products at fair prices around the world.

The non-profit organizations allow these independent producers to access partnerships with businesses in the developed world. Even small-scale operations are able to access the global marketplace, allowing them to trade more readily and improve their lives.

Often, the packaging for Fair Trade supported products will include personal stories from the people who made those products. Campaigns such as this have played an important role in connecting with consumers on a personal level.

A diverse range of products including coffee, chocolate, tea, sugar, rugs, baskets, birdhouses, rugs, and diaries are sold in thousands of Fair Trade affiliated shops and online outlets.

Teaching about Fair Trade in the classroom:

To take a closer look at Fairtrade in action, then take a look at this Case Study of a Fairtrade Cocoa Farmer.

We also have this Differentiated Fairtrade Fact File which caters to all abilities. Why not try a selection of these Fairtrade resources this Fairtrade Fortnight? This event is the perfect opportunity to teach kids all about what it is and why it's significant!

What's the Difference Between Fair Trade or Fairtrade?

There is a difference between Fair Trade and Fairtrade.

Fair Trade is the umbrella term given to the concept of mutually beneficial trading arrangements between developed and undeveloped nations.

Fairtrade is an independent non-profit organization (one of many around the world) that works to improve the lives of workers in poorer countries by raising awareness and building ethical trade links.

How Does Fairtrade Help Farmers?

Through learning about Fair Trade, KS2 children will develop their understanding of how Fair Trade helps farmers, and therefore why it's significant. Fairtrade helps farmers, miners and workers around the world in lots of different ways. These can be summarized under 3 different headings:

Benefits of Fairtrade:

Economic:

• One of the main ways in which Fairtrade helps farmers is with their Minimum Price requirement. This means that in order for a product to be certified as a Fairtrade product, farmers must be paid at least the minimum price set by the Fairtrade Foundation, which helps to ensure income security for the farmers and makes them less vulnerable to poverty.
• Better wages help to empower communities which helps them to arrange into cooperatives which improves their position in markets and puts them in a better negotiating position.
• By increasing financial stability amongst these communities, Fairtrade helps farmers and workers gain access to more training and better machinery. Things like this also feed into more development for these organizations, which will allow them to grow and make more money.

Environmental Benefits of Fairtrade:

• The standards of the Fairtrade Foundation also contribute towards maintaining local biodiversity and ecosystems and preventing environmental degradation. They aim to reduce greenhouse gas emissions, improve water and soil quality, pest and waste management, and preventing the use of harmful genetically modified organisms being used in farming.
• Another way that Fairtrade helps farmers is by facilitating training in eco-friendly practices such as maintaining good, bio diverse soil that's full of nutrients. This is important for maintaining a healthy ecosystem where healthy plants can grow.
• The Fairtrade Standards also encourage farmers to use non-toxic pesticides, which is also beneficial for the environment and for consumers.

Social Benefits of Fairtrade:

• The economic and environmental benefits of Fairtrade help farmers to have more control and more power over their lives.
• Fairtrade supports workers rights, racial equality and gender equality.
• All of this improves social mobilities for fair trade farmers, workers and miners.

Is Fairtrade Really Fair?

There are some people that question the extent to which Fairtrade helps farmers, and not everyone agrees that the work Fairtrade does is wholly positive.

Phillip Booth from the Institute of Economic Affairs believes Fairtrade makes false claims about its investment in social projects.

Rather than re-investing the money it generates from consumers, he argues:

"... only about 50 percent... is available to spend on social projects, and others have suggested a figure much closer to zero. No clear evidence has been produced to suggest that farmers themselves actually receive higher prices under Fairtrade."

In response, Fairtrade maintains that its mission is to combat the "injustices of conventional trade" and sees their work as "a step in the right direction" rather than an instant solution to global poverty.