Fair Trade from a Retail Perspective March 27 2015, 0 Comments

If you work, support, educate or buy fair trade then I know that you have experienced this scenario,

“What exactly is fair trade?”

“Well, fair trade means that the artisan receives a fair wage for their work”.

Not that there is anything wrong or incorrect about this statement but it really does not fully explain what fair trade is.  Sure, in the simplest terms, Fair Trade is paying the producer a “Fair Wage” for their product and this “Fair Wage” is a path to build a better life.

If you do work in fair trade you know that it can be difficult if not impossible to explain in just a few words.  This is because fair trade is a complex system based on many principles designed to help those most in need.

The bigger picture of fair trade is that it must meet several criteria from all parties involved.  This starts with the facility or cooperative that produces the goods, then the wholesaler or NGO that works directly with the artisans, and ultimately the retailer, who provides the outlet for the products directly to the customer.

All parties involved must undergo a thorough and detailed audit, each slightly different as each plays a different role.  For us, the retailer, we must provide producer references; disclose every vendor we work with and disclose all financial information and records annually and sometimes even through random audits to the Fair Trade Federation.  In this process, 40% of applicants are rejected.

Fair Trade is a holistic approach to trade in which all parties involved are required to abide by several rules to go well beyond a “Fair Wage”, including:

Creating Opportunity – this principle, in my opinion is the foundation to fair trade!  It creates a means to make an income for those who are marginalized, those who live in areas like villages far from cities or tourist destinations where there is no access to market.  It creates jobs for many who would otherwise remain unemployed or have to leave their homes and villages in search of work.  It can help to keep the family unit intact.

Develop Transparent and Accountable Relationships – a “Transparent Relationship” between producer and buyer means that both parties will be honest with each other and work together as a team to solve problems.  An “Accountable Relationship” means that we are not just looking to buy for one season; we have a goal to create a long term relationship.  We will not purchase as similar product from another producer just because they can “beat the price”. 

Build Capacity – this principle means that the both the wholesaler working directly with the artisans and us, the retailer will help the producers build their business.  On the retail side, we do this by provided product feedback, suggestions and market changes.  This helps with design to change or create new products for sustainability of sales, therefore steadily creating a greater demand, employing more people and ultimately, improving the entire community.

Promote Fair Trade – this is where the rubber meets the road.  Fair Trade is still a young enough industry and the majority of the responsibility lies in the hands of the companies that work in it.  Therefore it is our responsibility to show our customers how the products are fair trade through artisan stories, information from quarterly or annual vendor reports, firsthand accounts and testimonials from working or visiting with our artisan partners.  We love to sell our fair trade products but we want to create sustainability and grow fair trade so that more and more opportunities are created.  We want our customers to think about who made the product and how each and every fair trade purchase truly makes a difference and hopefully after they leave our shop, they will look for, or ask for fair trade products wherever they go.

Pay Promptly and Fairly – here we are again, back to the fair wage thing!  Here is where it gets a bit difficult to answer the customer who wants a quick or compartmentalized answer about “how much does the artisan get paid for this item?” or “what percentage does the artisan make?”  Well let’s see, as a retailer working with over a 100 vendors representing 54 countries and 2000 different products handmade from 1000’s of artisans, each with a different cost of living and different product costs, there is no simple one-lined answer.  The long answer is that we know fair trade was created as a means to provide a better life and not exploit producers.  It is a guarantee that the trading relationship is a true partnership allowing all to make a fair profit.  Fair wages are determined by several factors, including:

  • The amount of time, skill, and effort involved in production
  • Minimum and living wages where products are made
  • The purchasing power in a community or area
  • Other costs of living in the local context

Each party involved has different responsibilities in paying a “Fair Wage”.  As a retailer, we pay our vendors their asking price as they have created their organization to help these artisans; they work directly with them and have an intimate relationship with them, their communities, and their cost of living and production costs.  In many cases the artisans are paid well over 3x the local pay.

Safe & Empowering Work Conditions – one of my favorite principles as this one not only guarantees that workers have a voice in the decisions that affect them most but it creates a work environment that is safe, healthy and free from discrimination of any kind!  This beautiful principle does away with all discrimination based on race, religion, sex or disability.  This can be huge in developing countries where one can easily be excluded from work or even society because of casts systems, being female or being HIV+.

Ensure the rights of Children – a principle in my opinion that should not even have to be stated, Fair Trade will never using exploitive child labor!  Forced child labor has no place in our products and the entire supply chain should support children’s right to security, education and play.  

Environmental Sustainability – fair trade protects the environment and assures that the products can continue to be produces long-term by responsible use of resources and eco-friendly production.  The entire supply chain is encouraged to reduce, reuse, reclaim and recycle materials wherever possible.

Respect Cultural Identity - Fair Trade products and production methods reflect the history and traditions of the producers.  By providing a market for these handcrafts, producers can earn a living doing what their families have done for generations and they can in turn teach their children, keeping traditional art forms and crafts alive for future generations.

 

So, how do we easily explain the complex and beautiful system of Fair Trade?  I like to think of Fair Trade first as creating opportunity, creating dignified employment.  I like to think of fair trade a helping the poorest of the poor.  I often choose just one principle for the day or for one customer and let them know that it is just one of many. 

We want our customers to fall in love with the comprehensive nature of Fair Trade by getting behind the stories of the products so that they are inspired to share with someone else and continue to seek out socially responsible products and businesses.

 

Raymond Ballestero

President, One World Fair Trade