What exactly is Fair Trade?
The concept of ‘fair trade’ has been around for over 40 years according to FINE but a formal labelling scheme didn’t get off the ground until the late 1980s.
The first Fairtrade label, named ‘Max Havelaar’, was launched in 1988 under the initiative of the Dutch development agency Solidaridad. They sold the first Fair Trade coffee into Dutch supermarkets, which was branded “Max Havelaar,” after a fictional Dutch character who opposed the exploitation of coffee pickers in Dutch colonies.
Over the next few years, the brand was replicated in a number of countries including Belgium, Switzerland, Denmark, Norway and France. It was given the ‘Fairtrade Mark’ in the UK and Ireland, ‘Rättvisemärkt’ in Sweden, and ‘Reilu Kauppa’ in Finland.
Fairtrade Labelling Organizations International (FLO) was established in Bonn, Germany in 1997 to unite the labelling initiatives under one umbrella and establish worldwide standards and certfication.
The Fairtrade Mark is still being consolidated across the world, with ‘Transfair’ still running in the USA and Canada, and Max Havelaar in Switzerland, but slowly all Fair Trade products are moving over to the Mark.
What does ‘fair trade’ mean?
If a product has the ‘Fairtrade’ label, it means that the producers have received a guaranteed amount for the item they are producing (typically chocolate, tea or coffee, but it does include many others). While this amount can increase if the price rises, it will remain at the guaranteed level even if the market falls. This is of critical importance to small producers, who would otherwise have to cope with the market fluctuations.
Another aspect of Fair Trade is that producers receive the ‘Fairtrade Premium’ to be spent on social projects (education, health or certain business projects, for example). Again, this is a major benefit to small producers.
The Fairtrade mark has certainly been increasingly successful. In 2008, for example, 70% of people in the U.K. recognised it, with 64% associating it with a better deal for producers in the developing world. Worldwide sales of Fairtrade certified goods were over US$4 billion. More importantly, some studies have shown that Fairtrade has led to benefits to some producers.