Products

Understanding Fair Trade

Generic Standards
In contrast to codes of conduct and other social labels, the ‘Fair Trade’ standards are more than a simple set of minimum standards for socially responsible production and trade. The ‘Fair Trade’ standards go further - they guarantee a minimum price considered as fair to producers. They provide a ‘Fair Trade’ premium that the producer must invest in projects enhancing their social, economic and environmental development. They strive for mutually beneficial long term trading relationships, and they set clear minimum and developmental criteria and objectives for social, economic and environmental sustainability. ‘Fair Trade’ standards need to be met by producers, their organizations and the traders who deal with ‘Fair Trade’ products.

Producer Standards
The problems experienced by producers and workers in developing countries differ greatly from product to product. The majority of coffee and cocoa, for example, is grown by small farmers, working their own land and marketing their produce through a local co-operative. For these producers, receiving a minimum price for their beans may be more important than any other aspect of a fair trade. Most tea, however, is grown on estates. The biggest concern for workers employed on tea plantations is likely to be fair wages and decent working conditions. To address these realities there are two sets of ‘Fair Trade’ generic standards.

Trader Standards
Traders who buy directly from the ‘Fair Trade’ producer organizations must:

Pay a price to producers that, at the least, covers the expenses of sustainable production - this is the Fair Trade minimum price.
Pay a premium that producers can invest in development - the Fair Trade premium.
Pay a portion in advance, when producers ask for it.
Sign contracts that allow for long-term planning and sustainable production practices.

Product Standards
It is important to note that ‘Fair Trade’ standards are, to some extent, different for small farmers´ organizations that are organized in a democratic way (such as a cooperative or association), and for situations structurally depending on hired labour, as it is the case in plantations and factories. This is why there are different product standards for the different working conditions. The following are available upon request for each specific product:

Product standards for small farmers’ organizations and for traders of their products
Product standards for hired labour situations and for traders of their products