Tuesday, December 19, 2006

What is fair trade?

A lot of people have been asking to me to post some more information on fair trade and what it is all about in the fashion industry. So here is some information

What is fair trade?
Quite simply, fair trade means that producers are paid fair prices for the products they produce, instead of the minimum prices that the marketplace will allow, as is the case in the mainstream market today.

What does “fair” mean? Who defines it?
While there is no universally accepted measuring stick for what a fair price or a fair wage is, it is generally accepted that farmers or workers earning a fair price or wage are able to live relatively comfortable lives within the context of their local area. This means enough money for housing, a generous amount of food, health care, education for children, and some disposable income.

What types of fair trade products are available for purchase?
Traditionally, fair trade has been limited to commodities such as coffee, tea, fruits, and cotton. Fair trade coffee has become especially popular in Europe, and recently has made significant gains in the United States.

Why has fair trade been limited mainly to commodities?
Commodities like coffee and fruits offer a very simple economic model. They are traded in commodity markets daily, resulting in a “market price.” Importers can purposely choose to pay farmers more than this going market price.

Manufactured goods like clothing are much more complicated because components often come from literally dozens of sources. Also, wages, labor laws, and factory conditions are much more difficult to monitor compared to commodity prices.

Who determines if a product is worthy of being called “fair trade”?
Currently in the United States, the only organization that certifies fair trade products is TransFair USA (one of over twenty members of the worldwide Fair Trade Labeling Organizations International (FLO)). TransFair USA currently certifies to coffee, tea, cocoa, sugar, rice, vanilla, and certain fruits (mangos, bananas, pineapples, and grapes).

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