Understanding Fair Trade

Global Citizenship

The Market Chain or Supply Chain

• The supply chain, or market chain, is the name given to the journey a product (such as coffee or chocolate) makes from producer to customer.

• This often involves many steps.• Different standards apply to people along the supply

chain

Let’s refresh our knowledge:Who makes the profits in the global coffee market chain?

Source: Oxfam International (2002), page 24, on-line at: http://www.maketradefair.com/en/index.php?file=16092002163229.htm

What is Fair Trade?

Fair trade works by:

• Empowering disadvantaged producers at the local level by:– paying them fairer wages for their labour; – giving them a stronger voice in the market; – providing better trading conditions for them; – raising awareness of their situation; – and strengthening their local living conditions.

• Fair trade is an alternative approach to free trade. The Fairtrade label empowers consumers to buy products that they know have been produced and traded in fairer, more ethical conditions.

Fair Trade or Fairtrade?

Source: Y Care International (2011), page 10, on-line at: http://www.ycareinternational.org/2488/workshops-and-resources/youth-for-fair-trade-resource-pack.html

Fairtrade Standards

• Research Activity:

– Go to the Fairtrade Foundation’s website: www.fairtrade.org.uk– Click on the “What is Fairtrade?” tab, then look for the

information on Fairtrade certification.– What are the Fairtrade standards? – What do these standards involve?– How do these standards work?

Create a fact-sheet or poster (groups of 2-3) about the Fairtrade Standards (20

minutes developing - then each group to present for 3 minutes each)

The Fairtrade Standards

• There are minimum requirements:– E.g. the ban on agrochemicals (e.g. pesticides)

that are in the Fairtrade Labelling Organisation’s (FLO’s) list of prohibited materials

• And progressive requirements:– E.g. the ongoing reduction in the use and toxicity

of those agrochemicals which are permitted.So poorer farmers are able to enter the system, but

are then supported to gradually improve their practices.

The Fairtrade Minimum Price

• Buyers of Fairtrade products have to pay producers a minimum price for their product– This is to ensure that Producer

Organisations receive a price which covers the cost of sustainable production for their product.

The Fairtrade Premium

• Social Premium– This money might be spent on schools, hospitals and

other essential community needs

• Economic Premium– This money might be spent on giving credit (loans) to

producers starting up new businesses

• Environmental Premium– This money might be spent on making production more

environmentally sustainable

So Fairtrade standards relate to 3 areas of Sustainable Development:

• Social Development

• Economic Development

• Environmental Development

Benefits to producers• Video: Olympic Gold Medalist, Steve Redgrave, visits Fairtrad

e Cotton Growers in Mali (6 minutes)

• Discussion: What kind of benefits to producers can we see in the above video?

References• Y Care International (2011) Youth for Fair Trade Resource Pack, on-line at:

http://www.ycareinternational.org/2488/workshops-and-resources/youth-for-fair-trade-resource-pack.html

• Oxfam International (2002) Mugged: Poverty in your Coffee Cup, on-line at: http://www.maketradefair.com/en/index.php?file=16092002163229.htm

• Photos:– Title slide: Woman farmer. Newbury College Website, on-line at:

http://vle.newbury-college.ac.uk/mod/forum/discuss.php?d=587