Fair Trade Facts

The objective of fair trade is to secure a better deal for the producers whose prices can be pushed down by large suppliers.

Often Fairtrade focuses on small scale producers, though this depends on the type of commodity. Fairtrade producers must be able to demonstrate that they meet market requirements for quality, consistency and continuity of supply.

Fair price
Fair trade criteria establishes a minimum guaranteed price that covers the cost of production and ensures a living wage for growers.

Pre-Finance
many small producers find it difficult to obtain finance in order to make their products available for export. Fair trade principles mean the producers can request part-payment of orders in advance of delivery.

Premium
in addition to the purchase price paid by importers, a separate payment is made which is designated for social and economic development in the producing communities. Farmers decide how to use these funds, often used for improvements in health, education and other social facilities.

Long term trade relationships
Fair trade encourages importers to place orders in advance to increase the security of the producers.

Coffee a fair trade example
Without fair-trade most coffee is bought through the world commodity market; this means the buyer and seller never meet. Another disadvantage of this system is that buyers do not know who growers are, or how much they receive for their beans. Buying directly from the farmers’ associations, fair-trade enables farmers to receive a greater share of the rewards for their labour.

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