Welcome to the presentation on

World Fair Trade

GROUP MEMBERS :PANKAJ KUMAR MALLICK (MDS-141503)DEBABRATA MAHALDER (MDS-141533)MD. KHAIRUL ISLAM RONY (MDS-141544)MDS KHULNA UNIVERSITY SESSION :2014-15

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"Fair Trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions, and securing the rights of marginalized producers and workers .

They backed by consumers are engaged actively in supporting producers awareness raising and in campaigning for changes in the rules and practice of conventional international trade." They can be recognized by the WFTO logo.

Introduction

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The first attempts to commercialize fair trade goods in Northern markets were initiated in the 1940s and 1950s by religious groups and various politically oriented non-governmental organizations (NGOs). Ten Thousand Villages, an NGO within the Mennonite Central Committee (MCC) and SERRV International were the first, in 1946 and 1949 respectively, to develop fair trade supply chains in developing countries. The products, almost exclusively handicrafts ranging from jute goods to cross-stitch work, were mostly sold in churches or fairs. The goods themselves had often no other function than to indicate that a donation had been made.

The current fair trade movement was shaped in Europe in the 1960s. Fair trade during that period was often seen as a political gesture against neo-imperialism: The slogan at the time, "Trade not Aid", gained international recognition in 1968 when it was adopted by the United Nations Conference on Trade and Development (UNCTAD) to put the emphasis on the establishment of fair trade relations with the developing world.

History

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Fair trade is developed by an informal association of four international fair trade networks: 1.Fairtrade Labelling Organization, 2.World Fair Trade Organizations (WFTO), 3.Network of European Worldshops and 4.European Fair Trade Association (EFTA)

Fair trade Formation

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Fair Trade is more than just trading:1.It proves that greater justice in world trade is

possible.2.It highlights the need for change in the rules

and practice of conventional trade and shows how a successful business can also put people first.

3.It is a tangible contribution to the fight against poverty, climate change and economic crisis.

Functions of Fair Trade

• Fair trade is a social movement whose stated goal is to help producers in developing countries achieve better trading conditions and to promote sustainability.

• Members of the movement advocate the payment of higher prices to exporters, as well as higher social and environmental standards.

• The movement focuses in particular on commodities, or products which are typically exported from developing countries to developed countries, but also consumed in domestic markets.

• It promotes sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers in developing countries. 6

Functions of Fair Trade

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American Apparel, BeGood Clothing, Boll & Branch,

Cherie Amie, FairTrade Australia, Fair Indigo, Good

& Fair Clothing Co., HAE Now, Life Threads Clothing,

Maggie's Organics, prAna, Ten Thousand, Villages,

Y'abal Handicrafts

Following are companies that use fair trade :

Fair Trade

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Ayni Bolivia (Bolivia), Asha Handicrafts Association (India), Association for Craft Producers (ACP) (Nepal), Baladarshan (India), Barbosa Fair Trade (Netherlands), Bethlehem Fair Trade Artisans (BFTA) Palestine), CRC (India), Creative Handicrafts (India), CTM Agrofair Italy (Italy), CTM Altromercato (Italy), Dr. Bronner's Magic Soaps (USA), El Puente GmbH (Germany), EZA Fairer Handel (Austria), Fair Trade Company - People Tree Japan (Japan), FairMail (Netherlands), GEPA (Germany), Glenart Trading (Pty) Ltd. (South Africa), Holy Land Handicraft Cooperative Society (Palestine), Kiboko (Kenya), Kumbeshwar Technical School (KTS) (Nepal), Mifuko (Finland), People Tree UK ( UK), Pushpanjali (PFT) (India), Sasha (India), SeeMe (Netherlands), Selyn Exporters Ltd. (Sri Lanka), SETU (India), Smolart Self-Help Group (Kenya), Tara Projects (India), Thanapara Swallows Development (Bangladesh), Trade Aid (New Zealand), Turqle Trading (South Africa), TWINE (Taiwan), Yunnan Danyun Fair Trade Development Co., Ltd. (China)

Some countries where Fair Trade works:

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10 Principles of Fair Trade

1. Creating Opportunities for Economically Disadvantaged Producers

2. Transparency and Accountability3. Fair Trading Practices4. Payment of a Fair Price5. Ensuring no Child Labor and Forced Labor6. Commitment to Non Discrimination, Gender Equity and

Women’s Economic Empowerment, and Freedom of Association

7. Ensuring Good Working Conditions8. Providing Capacity Building9. Promoting Fair Trade10.Respect for the Environment

http://wfto.com/fair-trade/10-principles-fair-trade

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There are several recognized Fairtrade certifiers, including Fairtrade International (formerly called FLO, Fairtrade Labelling Organizations International), IMO and Eco-Social. Additionally, Fair Trade USA, formerly a licensing agency for the Fairtrade International label, broke from the system and is implementing its own fair trade labelling scheme, which has resulted in controversy due to its inclusion of independent smallholders and estates for all crops. In 2008, Fairtrade International certified approximately (€3.4B) of products The World Trade Organization publishes annual figures on the world trade of goods and services.

Fair trade Movement

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The movement is especially popular in the UK where there are 500 Fairtrade towns, 118 universities, over 6,000 churches, and over 4,000 UK schools registered in the Fairtrade Schools Scheme. In 2011, over 1.2 million farmers and workers in more than 60 countries participated in Fair Trade, and €65 million in Fairtrade premium was paid. According to Fairtrade International, nearly six out of ten consumers have seen the Fairtrade mark and almost nine in ten of them trust it.

Fair trade Movement

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There are a large number of fair trade and ethical marketing organizations often employing different marketing strategies . Most Fair Trade products are sold by those Fair Trade organizations that believe it is necessary to market through supermarkets to get sufficient volume of trade to have any real impact on the developing world. The coffee has to come from a certified Fairtrade cooperative, and there is a minimum price when the world market is oversupplied. The cooperatives can, on average, sell only a third of their output as Fairtrade, because of lack of demand, and sell the rest at world prices.

The Fair Trade strategy

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The exporting cooperative can spend the money in several ways. Some go to meeting the costs of conformity and certification: as they have to meet Fairtrade standards on all their produce, they have to recover the costs from a small part of their turnover,

sometimes as little as 8%, and may not make any profit. Some meet other costs. Some is spent on social projects such as building schools, clinics and baseball pitches. Sometimes there is money left over for the farmers. The cooperatives sometimes pay farmers a higher price than farmers do, sometimes less, but there is no evidence on which is more common.

The Fair Trade strategy

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The World Fair Trade Organization (WFTO) aims to improve the livelihoods of disadvantaged people in developing countries by linking and strengthening organisations that offer just alternatives to unfair trade structures and practices. WFTO members share the following practices:1. Commitment to Fair Trade : To trade with concern for the social,

economic and environmental well-being of marginalised producers in developing countries. This means equitable commercial terms, fair wages and fair prices. Unfair trade structures, mechanisms, practices and attitudes will be identified and avoided.

2. Transparency: To openly share financial information, management policies, business practices, product sources, production, marketing and development programme plans on a regular basis. This enables both members and the public to assess WFTO’s, and each organisation’s social and financial effectiveness. This openness is tempered with respect to sensitive commercial or political information.

WFTO CODE OF PRACTICE

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3. Ethical Issues: To reflect in their structures a commitment to justice, fair employment, public accountability and progressive work practices. To seek the greatest possible efficiency at the lowest cost while involving workers in decision-making and management as appropriate to each organisation. To aim for adequate income for workers to meet their basic needs, including health care, education and the capacity to save.4. Working Conditions: To ensure a safe working environment that satisfied at a minimum all local statutory regulations. To provide the opportunity for all individuals to grow and reach their potential. To ensure that work is carried out under humane working conditions, using appropriate materials and technologies, while following good production and work practices.

WFTO CODE OF PRACTICE

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5. Equal Employment Opportunities: To oppose discrimination and ensure equality of employment opportunities for both men and women who suffer from the exploitation of their labour and the effects of poverty and racial, cultural or gender bias.6. Concern for People:To promote development which improves the quality of life and which is sustainable for and responsible to both people and the natural world. There will be no exploitation of child labour. Trading activities should not violate indigenous peoples’ claims on land or any resources of vital importance to their way of life. 7. Concern for the Environment:To encourage the trading of goods which are environmentally friendly. To manage resources sustainably and to protect the environment.

WFTO CODE OF PRACTICE

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8. Respect for Producers’ Cultural IdentityTo encourage production and development of products based on producers’ cultural traditions and natural resources. To promote producers’ artistic, technological and organisational knowledge as a way of helping preserve and develop their cultural identity. 9. Education and AdvocacyTo promote fair trade by encouraging people to change consumption patterns based on issues of social justice and concern for the environment. To support campaigns or campaign for national and international policies that will improve the living conditions of the poor in developing countries. To increase public and corporate consciousness of alternative trade as an effective means to change unfair international trade structures and attitudes. To increase awareness of cultural and traditional values of the South in order to promote intercultural understanding and respect.

Working Relationships

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WFTO members and observers agree to negotiate our differences through open and direct dialogue. 1. Relationships between Fair Trade Organizations (FTOs) and consumersFTOs provide consumers with high-quality, fairly priced products and educate and inform. FTOs recognise that good customer care - including respect for the customer, honest marketing techniques and provision of information - is both an ethical issue and a means of benefiting all parties in the trading cycle. Through consumer feedback FTOs will receive market and product information.

Working Relationships

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2. Relationships between FTOsAs representatives of the producers, FTOs should make efforts to coordinate their activities and help each other achieve commercial efficiency at the least possible cost in order to open up markets to benefit the producers. Their cooperation and commercial transactions shall be based on a clear and efficient work division according to their different geographical locations and resources. FTOs cooperate with each other by exchanging information about products and market needs and ways of meeting them, including joint supply and marketing. They seek to avoid both duplication and exclusivity in agreements for marketing and representation. They also aim to cooperate by obtaining funding for themselves and producer organisations through credits, loans and working capital and optimising existing resources.

Working Relationships

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3. Relationships between FTOs and Producer OrganizationsThe function of the FTO is to buy and sell and the function of the producer organizations is to produce and sell. Their commercial relationship should be complemented with other actions addressing the overall situation. Market information, product feedback, financial support and other relevant services are available according to members’ and observers’ capability. Taking into account the skills and resources of producers, FTOs and producer organizations seek to improve the quality, acceptability and range of their product offerings. Both FTOs and producer organizations agree to be responsible and professional in meeting their commitments in a timely manner.

Working Relationships

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4. Relationships between Producer OrganizationsCooperation between producer organizations should be frank, open and based on mutual respect to benefit their members. They avoid competition by not duplicating the designs or patterns of another group without permission. They exchange information, have joint workshops, take collective action and will, where possible, meet to discuss common issues. Approved at the 1995 WFTO Conference held in New Windsor, Maryland, USA. Download the WFTO Code of Practice: English, Spanish and French.http://wfto.com/our-path-fair-trade/wfto-code-practice

Working Relationships

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Buying Fairtrade Certified products makes a real difference for the Fairtrade farmers and workers in developing countries. Fairtrade means a better future for producers, workers, their families and communities in these countries.In addition to providing a fair and stable price for their products, Fairtrade is helping farmers, workers and their communities build better roads, access health care and send their kids to school. Fairtrade also enables them to grow and develop their businesses ensuring they can improve life for their families and communities well into the future.To learn more about the real impact Fairtrade is having on farmers' lives in developing countries visit our partners websites Fairtrade International and theFairtrade Foundation.Take a Step to Fair Trade

Benefits to the farmer

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Fairtrade Awards 2014

The Fairtrade Awards recognise the Australian supporters, retailers and licensees who are committed to promote Fairtrade products and continue to help to create better future for farmers, their families and local communities in developing countries.We are delighted to announce the winners of the 2014 Fairtrade Awards:•Supporter of the Year 2014 - Fadi Elbarbar•Product (Specialty) of the Year 2014 - Etiko 'This Shirt Frees Slaves' •Product (National) of the Year 2014 - Ben & Jerry's Choc Fudge Brownie•Café of the Year 2014 - Fresh St@rt Organic Cafe•Café Chain of the Year 2014 - San Churro•Specialty Retailer of the Year 2014 - Oxfam Melbourne•Retailer of the Year 2014 - Coles 

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• Critics claim that Fairtrade is unethical. • Consumers are willing to pay more for Fairtrade

products in the belief that this helps the very poor.

• The main ethical criterion of critics of Fairtrade is that this money is diverted from the very poor farmers to businesses in rich countries, to moderately poor farmers, to employees of cooperatives or are used for unnecessary expenses, so there is inevitably an increase in death and destitution.

Main challenges and Lesson learned

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• This informs criticisms that there is reason to doubt that much of the extra money paid reaches farmers, and that there is reason to believe that Fairtrade harms non-Fairtrade farmers.

• There are criticisms of what is designated Unfair Trading under EU law. There are also criticisms using many other criteria.

• One reason for low prices is that Fairtrade imposes an inefficient marketing system.

Main challenges and Lesson learnt

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• Farmers are forced to sell through a monopsonist cooperative, which may be inefficient or corrupt – certainly some private traders are more efficient than some cooperatives.

• They cannot choose the buyer who offers the best price, or switch when their cooperative is going bankrupt.

• There are also complaints that Fairtrade deviates from the free market ideal of some economists. Brink calls fair trade a "misguided attempt to make up for market failures" encouraging market inefficiencies and overproduction.

Main challenges and Lesson learnt

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• The evidence is that little of the extra money paid by consumers reaches the Third World, let alone farmers there.

• The Fairtrade Foundation does not monitor how much extra retailers charge for Fairtrade goods, and retailers almost never sell identical Fairtrade and non-Fairtrade lines side by side

• so it is rarely possible to determine how much extra is charged or how much reaches the producers, in spite of the Unfair Trading legislation. In four cases it has been possible to find out.

Main challenges and Lesson learnt

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• One British café chain was passing on less than one percent of the extra charged to the exporting cooperative;in Finland, Valkila, Haaparanta and Niemi. found that consumers paid much more for Fairtrade, and that only 11.5% reached the exporter.

• Many counter-examples would be needed to show that these are not typical. They claim that 1.53% of retail prices reach the Third World, and, since Fairtrade charges a 3% licencing fee at wholesale, the maximum that reaches the Third World, even if traders charge low margins is 50%. This would be unacceptable to most charities.

Main challenges and Lesson learnt

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• There have been largely political criticisms of Fairtrade, both from the left and the right. Some believe the fair trade system is not radical enough.

• French author Christian Jacquiau, in his book Les coulisses du commerce équitable, calls for stricter fair trade standards and criticizes the fair trade movement for working within the current system (i.e. partnerships with mass retailers, multinational corporations etc.) rather than establishing a new fairer, fully autonomous trading system.

Main challenges and Lesson learnt

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• The FairTrade system is too rooted in a Northern consumerist view of justice which Southern producers do not participate in setting. "A key issue is therefore to make explicit who possesses the power to define the terms of Fairtrade,

• Some of the criticisms of Fairtrade from the free market approach to economics appear to be linked to right wing political approaches, but this does not mean that their analysis in this particular case is unacceptable to mainstream economists.

Main challenges and Lesson learnt

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Fair Trade Logo all over the world

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