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I. Fair Trade
- What is fair trade?
- What’s wrong with the way things are now? Why do we need fair trade?
- What are the principles of fair trade?
- How do the producers benefit from being in a fair trade relationship?
- How do consumers benefit from fair trade?
Fair trade seeks to transform the lives of poor producers in the developing world by enabling them to use their skills and resources to trade their way out of poverty. It seeks to challenge injustices in trading structures and practices that so often lead to the exploitation and marginalization of poor people.
Fair Trade is essentially the exchange of goods based on principals of economic and social justice. It goes without saying that Aid and Development work are totally crucial and much needed approaches - but what gets us most excited about Fair Trade is that it is a sustainable and systemic approach that gives people independence and dignity. Itâ€™s not charity, nor pity, but itâ€™s a sustainable way to break cycles of poverty and dependency.
Give a man a fish and youâ€™ll feed him for a day (Aid)
Teach a man to fish and heâ€™ll feed himself (Development)
Buy his fish and he has a sustainable way out of poverty (Fair Trade)
Fair Trade companies operate according to stipulated Fair Trade principles, specifically targeting those people who are traditionally bypassed by the benefits of commerce. It specifically strives to lift people out of poverty, and empowers whole communities. Buying Fair Trade means that we obtain products with a clear conscience (actually itâ€™s more of a feel good factor- because the effect is way above being merely neutral), and we can buy with confidence knowing that the products have been produced in ways that treat both people and planet fairly.
Today, more than 1 billion people live on less than $1 a day and lack access to clean water, health care, education and other basic social services (source: UN Development Group 2008). The gap between rich and poor is widening, with the worldâ€™s richest 20% consuming over 75% of the worldâ€™s resources while the worldâ€™s poorest 20% only consume 1/5% (source: World Bank 2008).
We all know, when we stop to think, that there is much that needs to be done to improve the quality of life, and opportunities for justice, open to huge numbers of people around the world. Today, as throughout history, societies that thrive from commerce exploit vulnerable people in far off and unseen places. While some regions, particularly in Asia have experienced robust economic growth, widespread poverty has languished in much of Asia, Latin America and sub-Saharan Africa, where AIDS, violence, corrupt governments and lack of infrastructure compound the misery. In Latin America one third of the population lives below a subsistence level.
While global trade has improved the conditions for some marginalized people, many critics suggest that conventional commerce gives too much power to multinational corporations and rich countries, and too little power to less industrialized countries and producers working there. Conventional trade often minimizes opportunities for vulnerable producers and sometimes degrades the environment. Powerful governments frequently employ subsidies, tariffs, and lax labor and environmental standards to enable politically influential groups to focus on short term profits, evade the full costs of commerce and separate themselves from the plight of marginalized people.
When we buy something cheaply we have to ask ourselves who paid the true price of that product- because someone somewhere paid. We recommend watching a lively and fascinating short video looking at these issues called The Story of Stuff.
With the proliferation of inexpensive products around the globe, there has been a rise of conscious consumers calling into question the costs of our over-consumptive lifestyles. Fair Trade is a means of ensuring fairness and greater parity in the supply chain, and in the treatment of producers and planet. Fair Trade is a response to concerns about business practices, labor conditions, environmental issues and cultural changes that perpetuate the vulnerability of low-income people. Fair Trade is a way for consumers to apply their buying power to challenge the current system and demand supply-chain accountability. Consumers are seeking alternatives that offer secure and rewarding lives for less fortunate people. The great thing about Fair Trade is that everyone can get involved- it is not a response that requires you to have either excess time to volunteer nor money to donate- it simply uses the money you were going to spend anyway on the things you need to give a hand up rather than a hand out to those who need just that.
(with credit to the Fair Trade Resource Network for some of the above material)
Fair trade is not about charity or pity. It is a holistic approach to trade and development that aims to alter the ways in which commerce is conducted, so that trade can empower the poorest of the poor. Fair Trade Organizations seek to create sustainable and positive change in developing and developed countries by adhering to the following principles:
- Creating Opportunities for Economically and Socially Marginalized Producers
- Developing Transparent and Accountable Relationships
- Building Capacity
- Promoting Fair Trade
- Paying Promptly and Fairly
- Supporting Safe and Empowering Working Conditions
- Ensuring the Rights of Children
- Cultivating Environmental Stewardship
- Respecting Cultural Identity
Visit the Fair Trade Federation site (http://www.fairtradefederation.org) for more information on each of the principles shown above.
Paying fair wages in each local context is obviously an important issue, but actually Fair Trade provides many benefits that move beyond just fair wages. For example:
Long term relationships. This is a very big piece for artisans: continuous work. Artisans need consistent employment as customers see that they can make fair trade purchases part of their normal spending habits. Sadly, some of our producers have to lay people off after the peak of holiday orders subsides. Sometimes, producers would rather earn lower wages but earn on a regular basis, than to higher but irregular and unreliable wages. Our producer groups, and the ordering pattern of Trade as One, attempts to provide steady, sustained work through the year. Fair Trade requires a lot of planning and understanding of the challenges facing poor producer groups, and a willingness to work with them to establish supply chains and to seek to understand and embrace their challenges.
Design & quality. Many artisans group cannot succeed until their quality and designs are up to market standards. Conventional traders do not provide that support to artisan groups that would benefit from this. It becomes a catch 22 situation. Fair Trade organizations specifically, and often courageously, choose to work with small and sometimes struggling artisans groups that need this level of support. In this way they receive input and assistance through the product development phase, and are brought to a consistent level of quality. Once producers reach this stage, they are able to compete in conventional markets by themselves. Their capacity is increased, as is their understanding of demand, quality and design requirements.
Loans & advance payments. We provide advance working capital to sustain producers through the production process. All producers who need it are paid 50% of the order cost upfront. They may additionally have access to grants/loans for tools etc. Conventional traders do not pay advances and even hold off on payment long after delivery which makes sustainable development of these small businesses impossible. Fair Trade relationships also work with producers to assist with costing analyses and the sharing of financial acumen. Fair Trade premiums and grants are invested in local communities to result in the long term development of these communities (for example in facilities, health & education).
Respect. We treat producers as fellow human beings. This makes a big difference in their lives. They love that we love their products- and that they are treated well for their hard work and talent. Dignity is sometimes the biggest wealth that many marginalized producers possess. Conventional trade sometimes misses or undermines this core human value.
Once people become aware of the enormous challenges that we face in the world, they are often overwhelmed with what to do. Itâ€™s good to be upset, but itâ€™s better to be inspired. Change is possible. But only when people of conviction take action. Trade as One is all about action.
Fair Trade customers benefit from being able to buy quality products for everyday use, as well as gift purchases, knowing that others have not been exploited through the production process. We all have to shop for our everyday needs and Fair Trade enables us to shop with a clear conscience knowing that others are actually benefitting from these purchases- rather than the reverse which is so often the case. Fair Trade means that our spending, as well as our giving, becomes a powerful force for good. The range of available products for everyday living and consumption, as well as for occasional gift-giving opportunities, is increasing all the time.
By buying Fair Trade products consumers also send powerful signals to businesses and governments about their concern for justice and ethics in trade. This consumer pressure encourages other organizations to develop Fair Trade ranges and challenges businesses to improve their wider impacts on society.
II. Trade as One
- How is Trade as One fair trade certified?
- Is Trade as One a for-profit or not-for-profit organization?
- Why don’t you work in other countries?
- Does Trade as One have any volunteer opportunities?
- What is Trade as One’s policy on the environment?
- I’d like to promote fair trade in my community. Are there ways to get involved?
- Is Trade as One a Christian organization? What does that mean for what you do?
We are vetted, signed up and paid-up members of the Fair Trade Federation (http://www.fairtradefederation.org) which means that we have to demonstrate how we, and all of our producers, operate in accordance with the stipulated Fair Trade principles.
We passionately believe that dignified job creation is the only long term way to break cycles of poverty. With the help of our supporters and customers Trade as One:
- Chooses to work with poor and small-scale producer groups working in a variety of situations- whether situations of extreme poverty, or where HIV/AIDS is a huge issue, and where human trafficking is rife
- Works in partnership with our producers, committing to long-term relationships and engaging in regular contact
- Offers feedback and advice to our producers to help them build professional, sustainable businesses
- Offers one of the widest range of fair trade products in the USA
- Demonstrates ethical business practices
If you want to sum up our business model, we are a not-just-for-profit business!
In setting up Trade as One the decision to use a for-profit structure was based firmly on what we felt would, in the long-term, be the most sustainable and effective way to build jobs for the poorest of the poor and to serve them through Fair Trade.
All organizations, regardless of their business model - whether not-for-profit or for-profit- must shoulder their overhead expenses either through donations (in the case of a not-for-profit) or through profit margins (in the case of a for-profit).
Trade as One, like any trading company, therefore incorporates these overhead costs into the profit margin. This margin enables us to operate and grow each year. This means we are able to rent warehouse space, to import products, to employ staff, to cover the costs of bringing the concept of fair trade products to more people each year, and to re-invest in growth.
It is our belief and desire that the structure for setting up Trade as One will result in trading relationships with our producers that benefit them by being more sustainable, longer-term and more capable of growth than if we had chosen another model, and it was for them that we felt this was the most responsible modus operandi. We always offer up front payments to any of our suppliers who need it, so that we are the ones that finance their working capital. We see this as an increasingly important part of our business model.
We want to be a model for how business can be done well and do good in the world. Like we said we are a not-just-for-profit business.
At Trade as One we are young and adventurous but weâ€™re still a relatively small organization and Fair Trade remains a relatively small (but growing!) market. It is not therefore possible to work in every country that we would like to, or every country which could benefit from Fair Trade income. As we grow we will steadily be able to venture into new countries and situations.
Trade as One already works with more than 40 producer groups in over 30 developing countries.
Yes, we do! We have ongoing opportunities at our warehouse, as well as opportunities to assist at events in many different parts of the country. You could consider our Fair Traders and Trading Post opportunities too! We like to have something for everyone!
For more information, please see our Get Involved section of the site.
Environmental responsibility is actually one of the key tenets of fair trade. As members of the Fair Trade Federation we seek to be environmentally responsible in the way we operate. We also screen our producers for their adherence to environmentally friendly practices. Fair Trade seeks to offer current generations the ability to meet their needs without compromising the ability of future generations to meet their own needs. We ask our producers how they actively consider the implications of their decisions on the environment and promote the responsible stewardship of resources. We also check how they encourage environmentally sustainable practices throughout the entire trading chain.
All of our consumable products and t-shirts are organic. We actively seek out environmentally friendly recycled products (for example our products from reclaimed trash from Indonesia, and our Moroccan wooden products are from sustainably managed forests. We have loads of eco-friendly, green products and we hope soon to be denoting which these are on the website so that you can spot them more easily.
In everything we do Trade as One strives to:
- reduce and off-set negative environmental impacts
- promote high environmental standards (and, of course, comply with all relevant legislative requirements)
First, get substituting your regular everyday as well as your gift purchases with Fair Trade products wherever you can!
Next, check out the Get Involved section of our website to read more about how you can spread the word in your community by becoming a Fair Trader or launching a Trading Post.
We are very open to your creative ideas, so if you have an idea that doesnâ€™t fit into what you read on the website, simply contact us.
Trade as One was established by Nathan and Catherine George as a direct response to their personal convictions. They believed that, in order for their faith to be authentic, it had to be evident in terms of practical benefit to the poor. Part of their conviction was also that the church needs to be given ways to respond to the poor beyond just giving money or volunteering. These two core convictions have shaped the direction and strategy of the organization.
Trade as One therefore exists because of, and has been profoundly shaped by, our Christian faith but it is conducted in a way that we hope is never exclusive or alienating to people who do not share our beliefs. The people who partner with us—whether customers, producers or institutions—share our values, but not necessarily our beliefs. We are keen to work with everyone who shares our vision of eliminating poverty through trade.
III. Our Producers
- How do the producers benefit from fair trade?
- What proportion of the final price goes to the producer?
- What proportion of the final price do fair trade farmers receive?
- Why fair trade olive oil?
- How does Trade as One find producers and choose whom to work with?
- Would Trade as One be interested in a new producer group?
Itâ€™s very difficult for those of us in the developed world to appreciate what fair employment means to hardworking women and men in the developing world. The poor want the same opportunities and treatment that we want - not handouts or pity - but simply a chance to provide for their families in a dignified way. For the producers, Fair trade means fair wages, honest employers, clean water, healthcare, and education for children. Trade as One wants to provide as many of these jobs as we can in some of the poorest areas of the world. Many producers need access to markets outside of their own country, since they are based where people are too poor to buy the beautiful products that they are capable of making. Fair Trade is a means of connecting poor producers to those people who need and want to buy their products.
Producers benefit from:
- access to new markets
- better prices
- decent working conditions
- regular orders
- the development of skills
- participation in decisions and
- advance payments (generally 50% payment up front, and the rest upon delivery thus enabling them to afford the raw materials needed in their work)
For products carrying the Fairtrade Mark, producers also receive a premium to spend on community development.
Through commitments to long-term relationships and building the capacity of producer groups, Fair Trade gives producers the confidence to plan and invest for the future and the ability to compete in international or local marketplaces.
Fair trade also exercises a high degree of care towards the environment.
Trade as Oneâ€™s accounts show that the total amount paid to producers accounts for approximately one half of our cost of sales. This is a much higher proportion than you would typically find in a commercial organization.
We are very proud of this fact, especially when considering that in most industries only a few pennies from every dollar make it back to those whose creativity, ingenuity, and hard work made the product possible. The exact proportion received by the producer varies from product to product because each product, region, and producer is different, and have chosen different routes to market. The proportion is influenced by the direct costs of production for different products and in different places, the number of processes involved after the product leaves the producer, and on tax and duty requirements. It is also the case that, over time, world commodity prices fluctuate, and so the price paid to the producer will sometimes increase. It is also affected by the final selling price, over which Trade as One may have no control.
Fair trade relationships with our producers ensure that they are always paid a fair wage, and the trading relationship is an ongoing committed relationship where the needs of the community are respected and assisted. On the specific issue of margins, Trade as One needs to make a margin on what we sell in order to be able to build a sustainable business here in the USA (with the costs of employing staff, maintaining a warehouse and offices etc) that steadily increases the impact we can have in developing countries. You can rest assured that the producers are delighted to be in this kind of trading relationship, and are not being exploited or sold short. There are many more producers who would desperately love to work with Trade as One but whom we cannot take on until the sales in the USA increase accordingly. For producers, the price is only one of the many benefits of engaging in Fair Trade. Many tell us that they place even greater value on the quality of relationship, regularity of ordering, and commitment to capacity building that they receive from Trade as One.
NB This answer refers mainly to the producers of non-consumable items on our site. The situation is slightly different for farmers who produce a raw material rather than a final product. For more information on this please see the FAQ: What proportion of the final price do fair trade farmers receive?
This is a complex question and the actual amount varies by product and location. We have looked in detail at the costs involved in 2 products (coffee, chocolate) to help explore this area.
The cost of producing the final product is obviously much greater than merely the cost of the raw materials, whether in a bar of chocolate or a cup of coffee. There are multiple costs involved in transportation, extraction, roasting, processing, packaging and manufacturing. For our coffee farmers, the overall picture is that they receive about 50% more in a Fair Trade situation than they would in a non Fair Trade situation.
For example, for a bag of our Fair Trade coffee the coffee farmers themselves will be paid approximately 17% of the final retail price. The equivalent in a non Fair Trade bag would be about 5%.
However, it is hard to capture the importance of Fair Trade in terms of increased price alone. Local development created by local capital is huge. Additionally, Fair Trade farmers receive a â€˜fair trade premiumâ€™ to invest in their community. The Kuapa Kokoo cocoa farmers in Ghana are paid a fair trade premium of $150 per tonne of cocoa beans which they can choose how to invest for the benefit of all- whether in facilities, health or education. The farmers of our coffee receive a similar premium which they have used over the last few years to support the construction of schools and wells, and the paying of teacher’s salaries in Uganda.
Within the Fair Trade system farmers are paid an agreed fair price for the raw materials. High quality organic ingredients guarantee excellent end products, and producers who are not sold short in the process. The cocoa bean farmers of Kuapa Kokoo in Ghana are unique in that they additionally receive profits generated by the chocolate brand they own in proportion to their shareholding in the company. Thus they are rewarded not just for their cocoa beans, but also for the chocolate brand of which they are such a fundamental part.
Farmers in the Fair Trade system sell raw materials like coffee beans, cocoa beans, shea butter, tea and sugar. These ingredients are then generally processed out of the country of origin where manufacturing facilities exist. In this way the companies producing the final products (eg coffee, chocolate and body care products) can blend and craft the particular varieties of their product that they wish to sell, and which people wish to buy, and the final product can be delivered fresh to its markets. This is why the coffee that Trade as One sells is grown in Uganda and Ethiopia but processed in Northern California, the chocolate that we sell is grown in Ghana but manufactured in Europe (which is why it tastes so good!), and the shea butter for our body care products is harvested in Togo but blended in Washington State.
Buying Fair Trade versions of the staple products in your pantry makes a huge difference to producers. Your purchasing these Fair Trade products directly benefits the farming communities and sends a message to these industries that consumers want products where they have confidence that the producers are treated fairly.
Expect to see many more Fair Trade consumables and everyday products appearing both on Trade as One, and in the shelves in your local supermarkets as the Fair Trade message catches on!
Olive oil is not normally an industry where one has big concerns about labor practices and unfair wages. However, our Fair Trade olive oil from Canaan is a product that we are very excited about and is a special case both in the world of olives and Fair Trade. Aside from it being organic, extra virgin and cold pressed, and being from the land where olive farming first began, it serves a very special purpose. Farmers in Palestine are trying to survive and sustain their farming practices in the midst of a conflict. They face great challenges accessing the world market, in addition to having restrictions imposed on farm and water access, and they live with constant threats of land confiscations. By Fair Trade providing market access to olive farmers outside of their own country it empowers them to negotiate some of these obstacles presented by the conflict conditions that surround them and helps them sustain their livelihood.
Unlike many of our other consumables (coffee, chocolate, shea butter, tea) the farmers in Palestine produce the raw material- olives- and also do processing, packaging, bottling and finishing the product in Palestine using Fair Trade labor the whole way through. This is of extra benefit to the community since they do not just export the olives, but create the final product in their own country too- which means that a greater proportion of the final sale price remains in Palestine, helping the local people and their economy. In addition to receiving fair wages, farmers are paid a Fair Trade premium and an organic premium above market price, and Canaan Fair Trade supports community projects like replanting olive trees and funding university scholarships.
As a percentage of the final sale price for each bottle of olive oil sold on Trade as One the percentage going back to the producer looks like this:
20% to the olive farmers themselves
20% to the processing and finishing plant workers in Palestine.
So- a fabulous 40% of the final sale price goes back to the Palestinian Fair trade workers from every bottle bought! The price of the olive oil is comparable to other high quality organic olive oils and yet the goodness it does is far greater!
Trade as One currently purchases from more than 30 producer groups with whom we have long-term committed partnerships. We are deliberately slow to take on new producers for two reasons: we want our relationships to be long-term, and we can only take on producers at a pace that accommodates our growth and sales channels.
These are the things we look for from each of our producers:
Fair Trade: We ensure that all our suppliers work according to Fair Trade principles. These principles are regulated by the Fair Trade Federation, of whom we are a member.
Capacity and expertise: Suppliers must also have the capacity and expertise to supply their products to us efficiently. For this reason that we only work with suppliers who have at least 2 years experience with exporting their products.
Quality: The products need to be of high quality with designs and colors that we believe appeal to customers in the USA. We want products that are beautiful, useful, and at price points that will enable us to sell the items while covering our own costs.
New products: Suppliers need have to capacity to develop new products every year so we feel confident entering a long term partnership with them. A consistency of fresh, new products ensures us that we will have further choices for anytime of the year to continue and build our partnerships.
Filling a gap: We currently have a large number of suppliers so when we consider new ones they must fill a gap for us as regards to our product set, rather than replicating the type of items we already source from existing producers. In this way we seek to be faithful to our existing producers so that they can rely on us for ongoing purchasing.
We are frequently approached by producer groups wanting to partner with us and sell their products through Trade as One. Given our strong commitment to existing relationships we are regrettably unable to help everyone. As far as the remainder of 2011 goes, Trade as One is not taking on any further producers but we do keep records of all inquiries for the future. In order to be a committed, helpful and reliable customer of our existing producers we are only able to take on new producers slowly, at a pace at which Trade as Oneâ€™s own sales allow us to expand our producer base. We have developed a series of standards that each of our producers must follow which are listed in the question and answer above.