Fair Trade organisation

We may say that Fair Trade organisation is designed to work mainly in two ways: firstly, making business within North and South countries and, secondly, addressing to the society and raising its awareness. Let's have a look at it.

Fair business

It all starts with the producers; Fair Trade was developed to help them survive with their work and they are the reason why many of us support and volunteer for this noble movement. Producers live in developing countries and usually are among the less favored in them.

The next step: a Fair Trade NGO works with them to set a fair price for their product as well as some development targets for their community: building a school, a new processing plant...

This Alternative Trade Organization then backs and supports that product and takes it to the market; sometimes, an external certifier inspects their way of production and, when Fair Trade criteria are met, they certify the product with a label.

External certifiers are an important trust builder on the Fair Trade organisation, as they contribute largely to the Fairtrade "brand" recognition. However, bear in mind that there are lots of products which do not carry any Fair Trade label, mainly handcrafts. Certifiers themselves can be certified by complying with ISO 65 norm (as FLO or Comercio Justo Mexico do) or with ISEAL (International Social and Environmental Accreditation and Labelling) criteria.

a Fair Trade co-op in Bolivia. Photo from Copade

Besides certifying products or other NGOs, which is already a huge step forward, Fair Trade NGOs also work in supporting small-scale producers, assisting them with market information, management training and pre-harvest financing. This helps them avoid prey middlemen, who both pay misery prices and charge high financing rates, waiting to buy from farmers when they most need cash.

Also, Fair Trade NGOs look to establish a long term working relationship, freeing producers from uncertainty and assuring them both a Fair price for their products and the Fair Trade Premium. A Fair price is one that has been agreed with the producers and always allows them to live in dignity and take care of their environment and future. There are some helpful resources to calculate this, as this Fair Trade calculator.

May I clarify that the Fair Trade Premium is an extra amount of money reserved for community development projects democratically chosen by the co-ops themselves.

On top of this, NGOs advise producers on how to diversify their crops, both to lower the risk of growing a single product and also to better feed their families (something known as food sovereignty). Organic farming is also encouraged, as it benefits both market price and farmers' health and also reduces expenses in agrochemicals.

Some NGOs do not purchase more than 50% of their production to any single co-operative, to prevent creating a dependency on them; instead ,they promote local trade as well as their independent exportations.

Apart from small-scale co-operatives of workers, certifications can reach larger plantations (tea is mostly cultivated this way) or factories in which the workers and management have formed the so-called Joint Bodies. These Joint Bodies manage, for example, the investment of the Fair Trade Premium pay.

Once this is done, organizations take charge of delivering products to the customers, either through their own World Shops or through "normal" shops... and there we buy!

creating awareness

Volunteers at public promotion in San Diego. Photo by B. Jackson.

The other point to know about Fair Trade organisation is that NGOs work also addressing the society, governments and companies to make ever more people aware of the unfair and unequal international trade system that is in place... and pressing to change it.

Some NGOs spend up to 50 % of their budget on this; in 2005, 18 million euros were spent in this cause only in Europe. This is the main task of the Fair Trade Advocacy Office, located in Belgium, which strives to favour Fair Trade in European Parliament resolutions.

You may learn more about Fair Trade organisation either by visiting the websites of the NGO's and producers (I have collected some of them in a small directory) or by reading some of these references.

It is interesting to see that, in recent years, producers have started to sell their goods also in their home countries, mainly in Mexico and Brazil, strengthening their local economies. This may indicate that awareness is also being created into South countries, among the emerging middle class.

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