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paid to the exporting cooperatives reaches the farmer. The cooperatives incur costs in reaching the Fairtrade political standards, and these are incurred on all production, even if only a small amount is sold at Fairtrade prices. The most successful cooperatives appear to spend a third of the extra price received on this: some less successful cooperatives spend more than they gain. While this appears to be agreed by proponents and critics of Fairtrade,<ref>e.g. Utting-Chamorro, K (2005). Does Fairtrade make a difference? The case of small coffee producers in Nicaragua. Development in Practice, Volume 15, Numbers 3 and 4, June 2005, Berndt, C. E. (2007). Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.</ref> there is a dearth of economic studies setting out the actual revenues and what the money was spent on. FLO figures<ref name="Labelling">Fairtrade Labelling Organizations International.: 2010, Annual Report 2009-2010. Retrieved May 27, 2011, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/FLO_Annual-Report-2009_komplett_double_web.pdf</ref> are that 40% of the money reaching the [[Third World]] is spent on ‘business and production’ which would include these costs, as well as costs incurred by any inefficiency and corruption in the cooperative or the marketing system. The rest is stated to be spent on social projects, rather than being passed on to farmers.
{{other uses|Fair trade (disambiguation)}}
{{Progressivism}}
{{Social democracy sidebar |Ideas}}

In 2008, products certified with [[FLO International|Fairtrade International]]'s [[Fair trade certification]] amounted to approximately US$4.98 billion (€3.4B) worldwide, a 22% year-to-year increase. Fairtrade branding has extended beyond food and fibre, a development that has been particularly vibrant in the UK where there are 500 Fair trade Towns, 118 Fairtrade universities, over 6,000 Fairtrade churches, and over 4,000 UK schools registered in the Fairtrade Schools Scheme.<ref>Paull, J. (2011) [http://orgprints.org/19527/1/Paull2011FairtradeISOFAR.pdfThe Fairtrade movement: Six lessons for the organics sector], Proceedings of the Third Scientific Conference of ISOFAR (International Society of Organic Agriculture Research), Namyangju, Korea, pp.317-320.</ref>

Although no universally accepted definition of 'fair trade' exists, Fairtrade labeling organizations most commonly refer to a definition developed by [[FINE]], an informal association of four international fair trade networks ([[Fairtrade Labelling Organizations International]], [[World Fair Trade Organization]] (WFTO), [[Network of European Worldshops]] and [[European Fair Trade Association]] (EFTA)):
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 to, and securing the rights of, marginalized producers and workers – especially in the South. Fair trade organisations, 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.<ref>European Fair Trade Association. (2009). [http://www.european-fair-trade-association.org/efta/Doc/What.pdf] URL accessed on May 4, 2009.</ref>

==The fairtrade system==
There are a large number of Fair Trade and ethical marketing organizations having different marketing strategies, different standards and different criteria, and there have been major changes in marketing strategies over the last twenty years.<ref>Ballet, Jerome and Aurelie Carimentrand ‘Fair Trade and the Depersonalization of Ethics’ Journal of Business Ethics (2010) 92:317–330 _ Springer 2010 DOI 10.1007/s10551-010-0576-0.</ref> Most Fair Trade is 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 Third World.<ref name="Ballet 2010">Ballet, Jerome and Aurelie Carimentrand ‘Fair Trade and the Depersonalization of Ethics’ Journal of Business Ethics (2010) 92:317–330 _ Springer 2010
DOI 10.1007/s10551-010-0576-0.</ref>

The Fairtrade brand is by far the biggest of these fair trade coffee brands. Packers in developed countries pay a fee to The Fairtrade Foundation for the right to use the brand and logo, and nearly all the fee goes on marketing. Packers and retailers can charge as much as they want for the coffee. The coffee has to come from a certified Fairtrade cooperative, and there is a minimum price when the world market is oversupplied, and 10c per lb extra at other times. 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.<ref>Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.;
Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.;
Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.;
Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October;
Renard, M. C. and V. P. Grovas (2007), ‘Fair Trade coffee in Mexico: at the center of the debates’, ch. 9 in D. Murray, L. Raynolds and J. Wilkinson (eds), Fair Trade: The Challenges of Transforming Globalisation, London: Routledge.
Pp 38-9;
Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems;
Bacon, C. (2005), ‘Confronting the coffee crisis: can Fair Trade, organic and speciality coffee reduce small-scale farmer vulnerability in northern Nicaragua?’, World Development, 33(3): 497–511;
Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.</ref> 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 they produce, they have to recover the costs from a small part of their turnover,<ref>Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.</ref> sometimes as little as 8%,<ref>Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems</ref> 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.<ref name="EthicalObjections">Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011(DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm</ref> In some cases the farmers certainly do not get enough extra to cover their extra costs in conforming to Fairtrade standards. There is little or no research on the extra costs incurred or the extra revenue.

The marketing system for Fairtrade and non-Fairtrade coffee is identical in the consuming countries, using mostly the same importing, packing, distributing and retailing firms. Some independent brands operate a virtual company, paying importers, packers and distributors and advertising agencies to handle their brand, for cost reasons.<ref>Davies, I.A. and A Crane, ‘Ethical Decision Making in Fair Trade Companies’, Journal of Business Ethics 45: 79–92, 2003. P84</ref> In the producing country Fairtrade is marketed only by Fairtrade cooperatives, while other coffee is marketed by Fairtrade cooperatives (as uncertified coffee), by other cooperatives and by ordinary traders.<ref>Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs.;
Kilian, B., Jones, C., Pratt, L., & Villalobos, A.: 2006, ‘Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee’, Journal of Business Research, 59 (3), 322–330.;
Berndt, C. E.: 2007, Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.;
Riedel, C. P., F. M. Lopez, A. Widdows, A. Manji and M. Schneider (2005), ‘Impacts of Fair Trade: trade and market linkages’, Proceedings of the 18th International Farming Symposium, 31 October–3 November, Rome: Food and Agricultural Organisation, http://www.fao.org/ farmingsystems.;
Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October.</ref>

To become certified Fairtrade producers, the primary cooperative and its member farmers must operate to certain political standards, imposed from Europe. FLO-CERT, the for-profit side, handles producer certification, inspecting and certifying producer organizations in more than 50 countries in Africa, Asia, and Latin America.<ref name="FLOCERT">FLO-CERT (2008). [http://www.flo-cert.net/flo-cert/main.php?lg=en FLO-CERT]. URL accessed on August 1, 2008.</ref> In the [[Fair trade debate]] there are many complaints of failure to enforce these standards, with producers, cooperatives, importers and packers profiting by evading them.<ref>Raynolds, L. T.: 2009, ‘Mainstreaming Fair Trade Coffee: from Partnership to Traceability’, World Development, 37 (6) p1089.;
Valkila, J., Haaparanta, P., & Niemi, N.: 2010, ‘Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers’, Journal of Business Ethics, 97, p264.;
Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3018-3025.;
Utting, K.: 2009, ‘Assessing the impact of Fair Trade Coffee: Towards an Integrative Framework’, Journal of Business Ethics, 86, p139.;
Valkila, J.: 2009, ‘Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap?’ Ecological Economics, 68, 3022-3023.;
Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, pp 12, 21.;
Mohan, S. (2010). Fair Trade Without the Froth - a dispassionate economic analysis of 'Fair Trade'. London: Institute of Economic Affairs. (e.g. p67);
Kohler, P. (2006), ‘The economics of Fair Trade: for whose benefit? An investigation into the limits of Fair Trade as a development tool and the risk of clean-washing’, HEI Working Papers 06–2007, Geneva: Economics Section, Graduate Institute of International Studies, October.
Jacquiau, C. ( 2006 ). Les Coulisees du Commerce Équitable. Paris: Mille et Une Nuits.;
Jacquiau, C. (2007). Max Havelaar ou les ambiguïtés du commerce équitable: Pourquoi le Sud rue dans les brancards. Monde Diplomatique September.;
Hamel, I.: 2006, ‘Fairtrade Firm Accused of Foul Play’, Swiss Info http://www.swissinfo.ch/eng/Fair_trade_firm_accused_of_foul_play.html?cid=5351232 23/12/2009.;
Weitzman, H. (2006, August 9). ‘Fair’ coffee workers paid below minimum wage. Financial Times .;
Weitzman, H. (2006, September 9). ‘'Ethical-coffee’ workers paid below legal minimum. Financial Times .;
Weitzman, H.: 2006, The bitter cost of ‘Fair Trade’ coffee. Financial Times, September 8.;
Reed, D.: 2009, ‘What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective’, Journal of Business Ethics, 86, p12.;
Moore, G., Gibbon, J., & Slack, R.: 2006, ‘The mainstreaming of Fair Trade: a macromarketing perspective’, Journal of Strategic Marketing, 14, 329-352.</ref>

There remain many Fair Trade organizations that adhere to a greater or smaller degree to the original objectives of Fair Trade, and that market products through alternative channels where possible, and market through specialist Fair Trade shops, but they have a small proportion of the total market.<ref name="Ballet 2010"/>

==General structure of the movement==
Most fair trade import organizations are members of, or certified by one of several national or international federations. These federations coordinate, promote, and facilitate the work of fair trade organizations. The following are some of the largest:
* The [[FLO International]] (Fairtrade International), created in 1997, is an association of three producer networks and twenty national labeling initiatives that develop Fairtrade standards, license buyers/label usage and market the [[International Fairtrade Certification Mark|Fair trade Certification Mark]] in consuming countries. The Fairtrade International labeling system is the largest and most widely recognized standard setting and certification body for [[Fairtrade labeling|labeled Fair trade]]. Formerly named [[Fairtrade Labelling Organizations International]], it changed its name to Fairtrade International in 2009, when its producer certification and standard setting activities were separated into two separate, but connected entities. FLO-CERT, the for-profit side, handles producer certification, inspecting and certifying producer organizations in more than 50 countries in Africa, Asia, and Latin America.<ref name="FLOCERT"/> Fairtrade International, the non-profit arm, oversees standards development and licensing organization activity. Only products from certain developing countries are eligible for certification, and for some products such as coffee and cocoa, certification is restricted to cooperatives. Cooperatives and large estates with hired labor may be certified for bananas, tea and other crops.<ref>http://www.fairtrade.net/generic_standards.html</ref>
* The [[World Fair Trade Organization]] (formerly the International Fair Trade Association) is a global association created in 1989 of fair trade producer cooperatives and associations, export marketing companies, importers, retailers, national, and regional fair trade networks and fair trade support organizations. In 2004 WFTO launched the FTO Mark which identifies registered fair trade organizations (as opposed to the FLO system, which labels products).
* The [[Network of European Worldshops]] (NEWS!), created in 1994, is the umbrella network of 15 national [[worldshop]] associations in 13 different countries all over Europe.
* The [[European Fair Trade Association]] (EFTA), created in 1990, is a network of European [[alternative trading organization]]s which import products from some 400 economically disadvantaged producer groups in Africa, Asia, and Latin America. EFTA's goal is to promote fair trade and to make fair trade importing more efficient and effective. The organization also publishes yearly various publications on the evolution of the fair trade market. EFTA currently has eleven members in nine different countries.

In 1998, the first four federations listed above joined together as [[FINE]], an informal association whose goal is to harmonize fair trade standards and guidelines, increase the quality and efficiency of fair trade monitoring systems, and advocate fair trade politically.
* Additional certifiers include IMO (Fair for Life, Social and Fair Trade labels), Eco-Social and Fair Trade USA.
* The [[Fair Trade Federation]] (FTF), created in 1994, is an association of Canadian and American fair trade wholesalers, importers, and retailers. The organization links its members to fair trade producer groups while acting as a clearinghouse for information on fair trade and providing resources and networking opportunities to its members. Members self-certify adherence to defined fair trade principles for 100% of their purchasing/business. Those who sell products certifiable by Fairtrade International must be 100% certified by FI to join FTF.

Student groups have also been increasingly active in the past years promoting fair trade products{{citation needed|date=April 2012}}. Although hundreds of independent student organizations are active worldwide, most groups in North America are either affiliated with United Students for Fair Trade (USA) or the Canadian Student Fair Trade Network (Canada).

The involvement of church organizations has been and continues to be an integral part of the Fair Trade movement:
* [http://www.tenthousandvillages.com Ten Thousand Villages] is affiliated with the Mennonite Central Committee<ref>http://www.tenthousandvillages.com/about-history/</ref>
* [http://www.serrv.org SERRV] is partnered with [http://crs.org/ Catholic Relief Services] and [http://www.lwr.org Lutheran World Relief]<ref>http://www.serrv.org/category/our-story</ref>
* [http://www.villagemarkets.org Village Markets] is a Lutheran Fair Trade organization connecting mission sites around the world with churches in the United States<ref>http://www.villagemarkets.org/fundraisers</ref><ref>http://www.thelutheran.org/article/article.cfm?article_id=10300&key=106089998</ref>
* Catholic Relief Services has their own Fair Trade mission in [http://www.crsfairtrade.org CRS Fair Trade]<ref>http://www.crsfairtrade.org/about/</ref>

==History==
{{Main|History of fair trade}}
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.<ref>International Fair Trade Association. (2005).[http://www.ifat.org/fthistory/history3.shtml Crafts and Food]. URL accessed on August 2, 2006.</ref> 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.<ref>Hockerts, K. (2005). [http://www.oikos-foundation.unisg.ch/homepage/fairtrade.pdf The Fair Trade Story]. p1</ref>

===Solidarity trade===
[[Image:Fair Trade Products.jpg|thumb|Fair trade goods sold in worldshops]]
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: radical student movements began targeting multinational corporations and concerns that traditional business models were fundamentally flawed started to emerge. 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.<ref>{{cite web|url=http://www.wfto.com/index.php?option=com_content&task=view&id=10&Itemid=17&limit=1&limitstart=1|title=Where did it all begin?|accessdate=24 June 2009|date=7 June 2009|publisher=WFTO}}</ref>

The year 1965 saw the creation of the first [[Alternative Trading Organization]] (ATO): that year, British NGO [[Oxfam]] launched "Helping-by-Selling", a program which sold imported handicrafts in Oxfam stores in the UK and from mail-order catalogues.<ref>[http://onevillage.org/fairtrade-history.htm Fair trade history (Scott, Roy)]</ref>

By 1968, the oversized newsprint publication, the [[Whole Earth Catalog]], was connecting thousands of specialized merchants, artisans, and scientists directly with consumers who were interested in supporting independent producers, with the goal of bypassing corporate retail and department stores. The Whole Earth Catalog sought to balance the international free market by allowing direct purchasing of goods produced primarily in the United States and Canada, but also in Central and South America.

In 1969, the first [[worldshop]] opened its doors in the Netherlands. The initiative aimed at bringing the principles of fair trade to the retail sector by selling almost exclusively goods produced under fair trade terms in "underdeveloped regions". The first shop was run by volunteers and was so successful that dozens of similar shops soon went into business in the [[Benelux]] countries, Germany, and other Western European countries.

Throughout the 1960s and 1970s, important segments of the fair trade movement worked to find markets for products from countries that were excluded from the mainstream trading channels for political reasons. Thousands of volunteers sold coffee from Angola and Nicaragua in worldshops, in the back of churches, from their homes, and from stands in public places, using the products as a vehicle to deliver their message: give disadvantaged producers in developing countries a fair chance on the world’s market, and support their self-determined sustainable development. The alternative trade movement blossomed, if not in sales, at least in terms of dozens of ATOs being established on both sides of the Atlantic, of scores of worldshops being set up, and of well-organized actions and campaigns attacking exploitation and foreign domination, and promoting the ideals of [[Nelson Mandela]], [[Julius Nyerere]], and the Nicaraguan [[Sandinistas]]: the right to independence and self-determination, to equitable access to the world’s markets and consumers.

===Handicrafts vs. agricultural goods===
In the early 1980s, [[Alternative Trading Organizations]] faced major challenges: the novelty of some fair trade products began to wear off, demand reached a plateau, and some handicrafts began to look "tired and old fashioned" in the marketplace. The decline of segments of the handicrafts market forced fair trade supporters to rethink their business model and their goals. Moreover, several fair trade supporters during this period were worried by the contemporary impact on small farmers of structural reforms in the agricultural sector as well as the fall in [[commodity]] prices. Many of them came to believe it was the movement's responsibility to address the issue and remedies usable in the ongoing crisis in the industry.

In the subsequent years, fair trade agricultural commodities played an important role in the growth of many ATOs: successful on the market, they offered a much-needed, renewable source of income for producers and provided [[Alternative Trading Organizations]] a complement to the handicrafts market. The first fair trade agricultural products were tea and coffee, quickly followed by: dried fruits, cocoa, sugar, fruit juices, rice, spices and nuts. While in 1992, a sales value ratio of 80% handcrafts to 20% agricultural goods was the norm, in 2002 handcrafts amounted to 25.4% of fair trade sales while commodity food lines were up at 69.4%.<ref>Nicholls, A. & Opal, C. (2004). Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications.</ref>

===Rise of labeling initiatives===
[[Image:Oldftlogos2.jpg|thumb|Early Fairtrade Certifications Marks]]<!-- FAIR USE of Oldftlogos2.jpg: see image description page at http://wiki.riteme.site/wiki/Image:Oldftlogos2.jpg for rationale -->Sales of fair trade products only really took off with the arrival of the first [[Fairtrade certification]] initiatives. Although buoyed by ever growing sales, fair trade had been generally contained to relatively small worldshops scattered across Europe and to a lesser extent, North America. Some felt that these shops were too disconnected from the rhythm and the lifestyle of contemporary developed societies. The inconvenience of going to them to buy only a product or two was too high even for the most dedicated customers. The only way to increase sale opportunities was to start offering fair trade products where consumers normally shop, in large distribution channels.<ref>{{cite journal|doi=10.1016/S0743-0167(02)00051-7|last1=Renard|first1=M.-C.|year=2003|title=Fair Trade: quality, market and conventions|url= |journal=Journal of Rural Studies|volume=19|issue= |pages=87–96}}</ref> The problem was to find a way to expand distribution without compromising consumer trust in fair trade products and in their origins.

A solution was found in 1988, when the first Fairtrade certification initiative, [[Stichting Max Havelaar|Max Havelaar]], was created in the Netherlands under the initiative of [[Nico Roozen]], [[Frans Van Der Hoff]], and Dutch development NGO [[Solidaridad]]. The independent certification allowed the goods to be sold outside the worldshops and into the mainstream, reaching a larger consumer segment and boosting fair trade sales significantly. The [[Fairtrade labelling|labeling initiative]] also allowed customers and distributors alike to track the origin of the goods to confirm that the products were really benefiting the producers at the end of the [[supply chain]].

The concept caught on: in the ensuing years, similar non-profit Fairtrade labelling organizations were set up in other European countries and North America. In 1997, a process of convergence among labelling organizations – or "LIs" (for "Labeling Initiatives") – led to the creation of [[Fairtrade Labelling Organizations International]] (FLO). FLO is an umbrella organization whose mission is to set the Fairtrade standards, support, inspect and certify disadvantaged producers, and harmonize the Fairtrade message across the movement.<ref>{{cite web|url=http://www.fairtrade.net/tasks.html|title=FLO International: FLO's Main Tasks|accessdate=27 January 2009|year=2006|publisher=FLO}}</ref>

In 2002, FLO launched for the first time an [[International Fairtrade Certification Mark]]. The goals of the launch were to improve the visibility of the Mark on supermarket shelves, facilitate cross border trade, and simplify procedures for both producers and importers. At present, the certification mark is used in over 50 countries and on dozens of different products, based on FLO’s certification for coffee, tea, rice, bananas, mangoes, cocoa, cotton, sugar, honey, fruit juices, nuts, fresh fruit, quinoa, herbs and spices, wine, [[Football (ball)|footballs]], etc.

==Product certification==
{{Main|Fair trade certification}}
''Note: Customary spelling of Fairtrade is one word when referring to the FLO product labeling system, see [[Fairtrade certification]]''

Fairtrade labelling (usually simply Fairtrade or [[Fair Trade Certified Mark|Fair Trade Certified]] in the United States) is a certification system designed to allow consumers to identify goods which meet agreed standards. Overseen by a standard-setting body ([[FLO International]]) and a certification body ([[FLO-CERT]]), the system involves independent auditing of producers and traders to ensure the agreed standards are met.

For a product to carry either the [[International Fairtrade Certification Mark]] or the [[Fair Trade Certified Mark]], it must come from FLO-CERT inspected and certified producer organizations. The crops must be grown and harvested in accordance with the international Fair trade standards set by FLO International. The [[supply chain]] must also have been monitored by FLO-CERT, to ensure the integrity of the labelled product.

Fairtrade certification purports to guarantee not only fair prices, but also the principles of [[ethical purchasing]]. These principles include adherence to ILO agreements such as those banning child and [[slave labour]], guaranteeing a safe workplace and the right to unionise, adherence to the [[United Nations]] charter of [[human rights]], a fair price that covers the cost of production and facilitates social development, and protection and conservation of the environment. The Fairtrade certification system also attempts to promote long-term business relationships between buyers and sellers, crop prefinancing, and greater transparency throughout the supply chain and more. These claims have been challenged by critics,

The Fairtrade certification system covers a growing range of products, including bananas, honey, coffee, oranges, Cocoa bean|cocoa, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea, and wine. Companies offering products that meet the Fairtrade standards may apply for licences to use one of the Fairtrade Certification Marks for those products.

The International Fairtrade Certification Mark was launched in 2002 by FLO, and replaced twelve Marks used by various Fairtrade labelling initiatives. The new Certification Mark is currently used worldwide (with the exception of the United States). The [[Fair Trade Certified Mark]] is still used to identify Fairtrade goods in the United States.

There is widespread confusion because the fair trade industry standards provided by Fairtrade International (The Fairtrade Labelling Organization) use the word “producer” in many different senses, often in the same specification document. Sometimes it refers to farmers, sometimes to the primary cooperatives they belong to, to the secondary cooperatives that the primary cooperatives belong to, or to the tertiary cooperatives that the secondary cooperatives may belong to<ref>Fairtrade Labelling Organizations International e.V. (2011), “Fairtrade Standard for Small Producer Organizations”, version: 01.05.2011_v1.1 p 5 http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-07-11_SPO_EN.pdf accessed 15/1/2013</ref> but “Producer [also] means any entity that has been certified under the Fairtrade International Generic Fairtrade Standard for Small Producer Organizations, Generic Fairtrade Standard for Hired Labour Situations, or Generic Fairtrade Standard for Contract Production.”.<ref>Fairtrade Labelling Organizations International e.V. (2011) “Generic Fairtrade Trade Standard,” p11 http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-02_GTS_EN.pdf accessed 15/1/2013</ref> The word is used in all these meanings in key documents.<ref>Fairtrade Labelling Organizations International e.V. (2011), “Fairtrade Standard for Small Producer Organizations”, version: 01.05.2011_v1.1 http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-07-11_SPO_EN.pdf accessed 15/1/2013; Fairtrade International (FLO) (2011?), “Explanatory Document for the Fairtrade Standard for Small Producer Organizations” http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-10-01_EN_SPO_Explan_Doc_2_.pdf accessed 15/1/2013; Fairtrade Labelling Organizations International e.V. (2011) “Generic Fairtrade Trade Standard,” http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-02_GTS_EN.pdf accessed 15/1/2013; Fairtrade International, (2011) “Explanatory Document for the Fairtrade Trade Standard http://www.fairtrade.net/fileadmin/user_upload/content/2011-12-29_Explan_Doc_GTS_EN.pdf ” http://www.fairtrade.net/fileadmin/user_upload/content/2011-12-29_Explan_Doc_GTS_EN.pdf accessed 15/1/2013; Fairtrade International (FLO) (2011);“Fairtrade Standard for Coffee for Small Producer Organizations” version: 01.04.2011 http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-01_EN_SPO_Coffee.pdf accessed 15/1/2013</ref> In practice, when price and credit are discussed, “producer” means the exporting organization, “For small producers’ organizations, payment must be made directly to the certified small producers’ organization”.<ref name="fairtrade.net">Fairtrade Labelling Organizations International e.V. (2011) “Generic Fairtrade Trade Standard, p 16” http://www.fairtrade.net/fileadmin/user_upload/content/2009/standards/documents/2012-04-02_GTS_EN.pdf accessed 15/1/2013</ref> and “In the case of a small producers’ organization [e.g. for coffee], Fairtrade Minimum Prices are set at the level of the Producer Organization, not at the level of individual producers (members of the organization)” which means that the “producer” here is half way up the marketing chain between the farmer and the consumer.<ref name="fairtrade.net"/> The part of the standards referring to cultivation, environment, pesticides and child labour has the farmer as “producer”.
<gallery>
Image:Fairtrade.png|[[International Fairtrade Certification Mark]]
Image:Ftomark.png|[[World Fair Trade Organization|WFTO Fair Trade Organization Mark]]<!-- FAIR USE of FTomark.jpg: see image description page at http://wiki.riteme.site/wiki/Image:Ftomark.png for rationale -->
</gallery>

==WFTO Fair Trade Organization membership==
In an effort to complement the Fairtrade product certification system and allow most notably handcraft producers to also sell their products outside worldshops, the World Fair Trade Organization (WFTO) launched in 2004 a new Mark to identify fair trade organizations (as opposed to products in the case of FLO International and Fairtrade). Called the FTO Mark, it allows consumers to recognize registered Fair Trade Organizations worldwide and guarantees{{Dubious|date=May 2010}} that standards are being implemented regarding working conditions, wages, child labour, and the environment. The FTO Mark gave for the first time all Fair Trade Organizations (including [[handcrafts]] producers) definable recognition amongst consumers, existing and new business partners, governments, and donors.

==Alternative trading organizations==
{{Main|Alternative trading organization}}
[[Image:Cafedirectcoffeeshop.JPG|thumb|right|[[Cafedirect]] coffee shop on [[Regent Street]] in central London.]] An alternative trading organization (ATO) is usually a non-governmental organization (NGO) or mission-driven business aligned with the Fair Trade movement, aiming "to contribute to the alleviation of poverty in developing regions of the world by establishing a system of trade that allows marginalized producers in developing regions to gain access to developed markets".<ref name="European Fair 1998 p.23 & 25">European Fair Trade Association (1998). Fair Trade Yearbook: Towards 2000. p.23 & 25</ref>

Alternative trading organizations have Fair Trade at the core of their mission and activities, using it as a development tool to support disadvantaged producers and to reduce poverty, and combine their marketing with awareness-raising and campaigning.

Alternative trading organizations are often, but not always, based in political and religious groups, though their secular purpose precludes sectarian identification and evangelical activity. Philosophically, the grassroots political-action agenda of these organizations associates them with progressive political causes active since the 1960s: foremost, a belief in [[collective action]] and commitment to moral principles based on social, economic and [[trade justice]].

According to EFTA, the defining characteristic of alternative trading organizations is that of equal partnership and respect - partnership between the developing region producers and importers, shops, labelling organizations, and consumers. Alternative trade "humanizes" the trade process - making the producer-consumer chain as short as possible so that consumers become aware of the culture, identity, and conditions in which producers live. All actors are committed to the principle of alternative trade, the need for advocacy in their working relations and the importance of awareness-raising and advocacy work.<ref name="European Fair 1998 p.23 & 25"/>

Examples of such organisations are [[Ten Thousand Villages]], [[Equal Exchange]] and [[SERRV International]] in the US and [[Equal Exchange Trading]], [[Traidcraft]], [[Oxfam Trading]], [[Twin Trading]] and [[Alter Eco in Europe]]. (see the [[Alternative Trading Organization]] page for further examples).

==Worldshops==
{{Main|Worldshop}}
[[Image:Oxfam shop on Drury Lane.jpg|thumb|[[Oxfam#Oxfam's shops|Oxfam shop]] on [[Drury Lane]] in [[Covent Garden]], [[London]]]]
Worldshops or fair trade shops are specialized retail outlets offering and promoting fair trade products. Worldshops also typically organize various educational fair trade activities and play an active role in trade justice and other North-South political campaigns.

Worldshops are often [[not-for-profit]] organizations and run by locally based volunteer networks.

Although the movement emerged in Europe and a vast majority of worldshops are still based on the continent, worldshops can also be found today in North America, Australia and New Zealand.

Worldshops' aim is to make trade as direct and fair with the trading partners as possible. Usually, this means a producer in a [[developing country]] and consumers in [[industrialisation|industrialized]] countries. The worldshops' target is to pay the producers a fair price that guarantees substinence and guarantees positive social development. They often cut out any intermediaries in the import chain.

A web movement has recently begun to provide fair trade items at fair prices to the consumers. One popular one is Fair Trade a Day<ref>http://FairTradeaDay.com</ref> where a different fair trade item is featured each day.

==World wide==
===International===
Every year the sales of Fair Trade products grow close to 30% and in 2004 were worth over $500 million USD. In the case of coffee, sales grow nearly 50% per year in certain countries.<ref name="Raynolds, Laura T. 2004">Raynolds, Laura T., Douglas Murray, and Peter Leigh Taylor. "Fair Trade Coffee: Building Producers Capacity Via Global Networks." Journal of International Development (2004): 1109-121. Print.</ref> In 2002, 16 000 tons of Fairtrade coffee was purchased by consumers in 17 countries.<ref name="Raynolds, Laura T. 2004"/> “Fair trade coffee is currently produced in 24 countries in Latin America, Africa and Asia”.<ref name="Raynolds, Laura T. 2004"/> The 165 FLO associations in Latin America and Caribbean are located in 14 countries and together export over 85% of the world’s Fair Trade coffee.<ref name="Raynolds, Laura T. 2004"/> There is a North/South divide of fair trade products with producers in the South and consumers in the North. Discrepancies in the perspectives of these southern producers and northern consumers are often the source of ethical dilemmas such as how the purchasing power of consumers may or may not promote the development of southern countries.<ref name ="Moore, Geoff 2004">Moore, Geoff. "The Fair Trade Movement: Parameters, Issues and Future Research." Journal of Business Ethics 53.1/2 (2004): 73-86. Print.</ref>

===Africa===
Africa’s exports come from places such as South Africa, Ghana, Uganda, Tanzania and Kenya. These exports are valued at $24 million USD.<ref name="Raynolds, Laura T. 2009">Raynolds, Laura T., and Siphelo Unathi Ngcwangu. "Fair Trade Rooibos Tea: Connecting South African Producers and American Consumer Markets." Geoforum (2009): 74-83. Print.</ref> Between the years of 2004 and 2006 Africa quickly expanded their number of FLO certified producer groups, rising from 78 to 171; nearly half of which reside in Kenya, following closely behind are Tanzania and South Africa.<ref name="Raynolds, Laura T. 2009"/> The FLO products Africa is known for are tea, cocoa, flowers and wine.<ref name="Raynolds, Laura T. 2009"/> In Africa there are smallholder cooperatives and plantations which produce Fair Trade certified tea.<ref name="Raynolds, Laura T. 2009"/> Cocoa-producing countries in West Africa often form cooperatives that produce fair trade cocoa such as [[Kuapa Kokoo]] in [[Ghana]].<ref name="ReferenceA"/> West African countries without strong fair trade industries are subject to deterioration in cocoa quality as they compete with other countries for a profit. These countries include [[Cameroon]], [[Nigeria]], and the [[Ivory Coast]].<ref name="ReferenceB"/>

===Latin America===
Studies in the early 2000s show that the income, education and health of coffee producers involved with Fair Trade in Latin America were improved, versus producers who were not participating.<ref name="Geiger-Onteo, Stephanie 2011">Geiger-Onteo, Stephanie, and Eric J. Arnould. "Alternative Trade Organization and Subjective Quality of Life: The Case of Latin American Coffee Producers." Journal of Macromarketing (2011): 276-290. Print.</ref> Brazil, Nicaragua, Peru and Guatemala, having the biggest population of coffee producers, make use of some of the most substantial land for coffee production in Latin America and do so by taking part in Fair Trade.<ref name="Geiger-Onteo, Stephanie 2011"/> Countries in Latin America are also large exporters of fair trade bananas. The [[Dominican Republic]] is the largest producer of fair trade bananas, followed by [[Mexico]], [[Ecuador]], and [[Costa Rica]]. Producers in the Dominican Republic have set up associations rather than cooperatives so that individual farmers can each own their own land but meet regularly.<ref name="ReferenceA"/> Fundación Solidaridad was created in [[Chile]] to increase the earnings and social participation of handicraft producers. These goods are marketed locally in Chile and internationally.<ref name="ReferenceB"/>

===Asia===
The Asia Fair Trade Forum aims to increase the competency of fair trade organizations in Asia so they can be more competitive in the global market. Garment factories in Asian countries including [[China]], [[Burma]], and [[Bangladesh]] consistently receive charges of human rights violations, including the use of child labor.<ref name="ReferenceA"/> These violations conflict with the principles outlined by fair trade certifiers. In [[India]], Trade Alternative Reform Action (Tara) Projects formed in the 1970s have worked to increase production capacity, quality standards, and entrance into markets for home-based craftsmen that were previously unattainable due to their lower caste identity.<ref name="ReferenceB"/>

==Fair trade commodities==
Fair trade commodities are goods that have been exchanged from where they were grown or made to where they are purchased, and have been certified by a fair trade certification organization, such as [[Fair Trade USA]] or [[World Fair Trade Organization]]. Such organizations are typically overseen by Fairtrade International. Fairtrade International sets international fair trade standards and supports fair trade producers and cooperatives.<ref>Fairtrade International (2011).[http://www.fairtrade.net/about_us.html About Us]. URL accessed on October 21, 2012.</ref> Sixty percent of the fair trade market revolves around food products such as coffee, tea, cocoa, honey, and bananas.<ref name="Raynolds, Laura 2000">Raynolds, Laura. "Re-embedding Global Agriculture: The International Organic and Fair Trade Movements." Agriculture and Human Values 17.3 (2000): 297-309. Print.</ref> Non-food commodities include crafts, textiles, and flowers. It has been suggested by Shima Baradaran of Brigham Young University that fair trade techniques could be productively applied to products which might involve [[child labor]].<ref name="Fair Trade and Child Labor">{{cite journal|coauthors=Stephanie H. Barclay|title=Fair Trade and Child Labor|journal=Columbia Human Rights Law Review, Forthcoming|date=April 26, 2011|url=https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1823546|accessdate=December 25, 2012|author=Shima Baradaran|quote=fair trade should be considered as a proven alternative to current strategies to eliminate child labor}}</ref> Although fair trade represents only .01% of the food and beverage industry in the United States, it is growing rapidly and may become a significant portion of the national food and beverage industry.<ref>Raynolds, Laura T., Douglas L. Murray, and John Wilkinson. Fair Trade: The Challenges of Transforming Globalization. London: Routledge, 2007.</ref>

===Coffee===
{{Main|Fair trade coffee}}

Coffee is the most well-established fair trade commodity. Growth in the fair trade coffee industry has extended the commodity away from solely small farms and companies. Now multinational corporations such as Starbucks and Nestle use fair trade coffee.<ref name="Jaffee, Daniel 2012 pp. 94-116">Jaffee, Daniel: "Weak Coffee: Certification and Co-Optation in the Fair Trade Movement." Social Problems , Vol. 59, No. 1 (February 2012), pp. 94-116</ref>

====Locations====
The largest sources of fair trade coffee are Uganda and Tanzania, followed by Latin American countries such as Guatemala and Costa Rica.<ref name="Raynolds, Laura 2000"/> As of 1999, major importers of fair trade coffee included Germany, the Netherlands, Switzerland, and the United Kingdom. There is a North/South divide between fair trade consumers and producers. North American countries are not yet among the top importers of fair trade coffee because fair trade was introduced in Europe before the United States and Canada.<ref name="Raynolds, Laura 2000"/>

====Labour====
Starbucks began to purchase more fair trade coffee in 2001 because of charges of labor rights violations in Central American plantations. Several competitors, including Nestle, followed suit.<ref name="Jaffee, Daniel 2012 pp. 94-116"/> Large corporations that sell non-fair trade coffee take 55% of what consumers pay for coffee while only 10% goes to the producers. Small growers dominate the production of coffee, especially in Latin American countries such as Peru. Coffee is the fastest expanding fairly traded commodity, and an increasing number of producers are small farmers that own their own land and work in cooperatives. Even the incomes of growers of fair trade coffee beans depend on the market value of coffee where it is consumed, so farmers of fair trade coffee do not necessarily live above the poverty line or get completely fair prices for their commodity.<ref name="ReferenceA">Ransom, David. The No-nonsense Guide to Fair Trade. Oxford: New Internationalist Publications, 2001</ref>

Unsustainable farming practices can harm plantation owners and laborers. Unsustainable practices such as using chemicals and unshaded growing are risky. Small growers who put themselves at economic risk by not having diverse farming practices could lose money and resources due to fluctuating coffee prices, pest problems, or policy shifts.<ref name="Rice, Robert A 1999">Rice, Robert A (1999). "A Place Unbecoming: The Coffee Farm of Northern Latin America." Geographical Review: 89(4): 554-579.</ref>

====Sustainability====
As coffee becomes one of the most important export crops in certain regions such as northern Latin America, nature and agriculture are transformed. Increased productivity requires technological innovations, and the coffee agroecosystem has been changing rapidly. In the nineteenth century in Latin America, coffee plantations slowly began replacing sugarcane and subsistence crops. Coffee crops became more managed; they were put into rows and unshaded, meaning diversity of the forest was decreased and [[Coffea]] trees were shorter. As plant and tree diversity decreased, so did animal diversity. Unshaded plantations allow for a higher density of Coffea trees, but negative effects include less protection from wind and more easily eroded soil. Technified coffee plantations also use chemicals such as fertilizers, insecticides, and fungicides.<ref name="Rice, Robert A 1999"/>

Fair trade certified commodities must adhere to sustainable agro-ecological practices, including reduction of chemical fertilizer use, prevention of erosion, and protection of forests. Coffee plantations are more likely to be fair trade certified if they use traditional farming practices with shading and without chemicals. This protects the biodiversity of the ecosystem and ensures that the land will be usable for farming in the future and not just for short-term planting.<ref name="Raynolds, Laura 2000"/> Commitment to sustainable practices is reflected in the prevalence of organic coffee in tandem with fair trade coffee. In the United States, 85% of fair trade certified coffee is also organic.<ref name="ReferenceB">DeCarlo, Jacqueline. Fair Trade: A Beginner's Guide. Oxford, England: Oneworld, 2007</ref>

====Consumer attitudes====
Consumers typically have positive attitudes for products that are ethically made. These products may include promises of fair labor conditions, protection of the environment, and protection of human rights. All fair trade products must meet standards such as these. Despite positive attitudes toward ethical products including fair trade commodities, consumers often are not willing to pay the higher price associated with fair trade coffee. The attitude-behavior gap can help explain why ethical and fair trade products take up less than 1% of the market. Coffee consumers can say they would be willing to pay a higher premium for fair trade coffee, but most consumers are actually more concerned with the brand, label, and flavor of the coffee. However, socially conscious consumers with a commitment to buying fair trade products are more likely to pay the premium associated with fair trade coffee.<ref>De Pelsmacker, Patrick, Liesbeth Driesen, and Glenn Rayp. "Do Consumers Care about Ethics? Willingness to Pay for Fair-Trade Coffee." Journal of Consumer Affairs 39(2): 363-385</ref> Once enough consumers begin purchasing fair trade, companies are more likely to carry fair trade products. [[Safeway Inc.]] began carrying fair trade coffee after individual consumers dropped off postcards asking for it.<ref name="ReferenceC">Jaffee, Daniel. Brewing Justice: Fair Trade Coffee, Sustainability, and Survival. Berkeley: University of California, 2007</ref>

====Fair trade coffee companies====
Following are coffee roasters and companies that offer fair trade coffee or some roasts that are fair trade certified:
*[[Green Mountain Coffee Roasters]]
*[[Starbucks]]
*[[Equal Exchange]]
*[[Pura Vida Coffee]]
*Larry's Beans
*Katz Coffee
*[[Invalsa Coffee Importers]]
*Café Xaragua

===Cocoa===
Many countries that export cocoa rely on cocoa as their single export crop. In Africa in particular, governments tax cocoa as their main source of revenue. Cocoa is a permanent crop, which means that it occupies land for long periods of time and does not need to be replanted after each harvest.<ref name="Willer and Yussefi 2008">Willer, Helga; Yussefi-Menzler, Minou und Sorensen, Neil, (Hrsg.) (2008) "The World of Organic Agriculture - Statistics and Emerging Trends 2008." IFOAM, Bonn and FiBL, Frick</ref>

====Locations====
Cocoa is farmed in the tropical regions of West Africa, Southeast Asia, and Latin America. In Latin America, cocoa is produced in Costa Rica, Panama, Peru, Bolivia, and Brazil. Much of the cocoa produced in Latin America is organic and regulated by an [[Internal control]] system. Bolivia has fair trade cooperatives that permit a fair share of money for cocoa producers. African cocoa-producing countries include Cameroon, Madagascar, São Tomé and Príncipe, Ghana, Tanzania, Uganda, and Côte d'Ivoire.<ref name="Willer and Yussefi 2008"/> Côte d'Ivoire exports over a third of the world's cocoa beans.<ref name="Brown, Michael Barratt 2007">Brown, Michael Barratt. "'Fair Trade' with Africa." Review of African Political Economy 34.112 (2007): 267-77</ref> Southeast Asia accounts for about 14% of the world's cocoa production. Major cocoa-producing countries are Indonesia, Malaysia, and Papua New Guinea.<ref>"Where We Work." World Cocoa Foundation. Web. 10 Nov. 2012.<http://worldcocoafoundation.org/our-work/where-we-work/>.</ref>

====Labor====
One suggestion for the reason that laborers in Africa are marginalized in world trade is because the colonial division of labor kept Africa from developing its own industries. Africa and other developing countries received low prices for their exported commodities such as cocoa, which caused poverty to abound. Fair trade seeks to establish a system of direct trade from developing countries to counteract this unfair system.<ref name="Brown, Michael Barratt 2007"/> Most cocoa comes from small family-run farms in West Africa. These farms have little market access and thus rely on middlemen to bring their products to market. Sometimes middlemen are unfair to farmers. Farmers do not get a fair price for their product despite relying on cocoa sales for the majority of their income.<ref name="Houston, Holly 2012">Houston, Holly, and Terry Wyer. "Why Sustainable Cocoa Farming Matters for Rural Development." Center for Strategic and International Studies, 6 Sept. 2012.</ref> One solution for fair labor practices is for farmers to become part of an [[Agricultural cooperative]]. Cooperatives pay farmers a fair price for their cocoa so farmers have enough money for food, clothes, and school fees.<ref>Goodman, Michael K. (2004) "Reading fairtrade: political ecological imaginary and the moral economy of fairtrade foods." Political Geography 23(7): 891-915</ref> One of the main tenants of fair trade is that farmers receive a fair price, but this does not mean that the larger amount of money paid for fair trade cocoa goes directly to the farmers. In reality, much of this money goes to community projects such as water wells rather than to individual farmers. Nevertheless, cooperatives such as fair trade-endorsed [[Kuapa Kokoo]] in Ghana are often the only Licensed Buying Companies that will give farmers a fair price and not cheat them or rig sales.<ref name="Berlan, Amanda 2008">Berlan, Amanda. "Making or Marketing a Difference? An Anthropological Examination of the Marketing of Fair Trade Cocoa from Ghana." Research in Economic Anthropology 28 (2008): 171-94.</ref> Farmers in cooperatives are frequently their own bosses and get bonuses per bag of cocoa beans. These arrangements are not always assured and fair trade organizations can't always buy all of the cocoa available to them from cooperatives.<ref name="ReferenceA"/>

====Marketing====
The marketing of fair trade cocoa to European consumers often portrays the cocoa farmers as dependent on western purchases for their livelihood and well-being. Showing African cocoa producers in this way is problematic because it is reminiscent of the imperialistic view that Africans cannot live happily without the help of westerners. It puts the balance of power in favor of the consumers rather than the producers.<ref name="Berlan, Amanda 2008"/>

Consumers often aren't willing to pay the extra price for fair trade cocoa because they do not know what fair trade is. Activist groups are vital in educating consumers about the unethical aspects of unfair trade and promoting demand for fairly traded commodities. Activism and ethical consumption not only promote fair trade but also act against powerful corporations such as [[Mars, Incorporated]] that refuse to acknowledge the use of forced child labor in the harvesting of their cocoa.<ref name="ReferenceC"/>

====Sustainability====
Smallholding farmers not only frequently lack access to markets, they lack access to resources that lead to sustainable cocoa farming practices. Lack of sustainability can be due to pests, diseases that attack cocoa trees, lack of farming supplies, and lack of knowledge about modern farming techniques.<ref name="Houston, Holly 2012"/> One issue pertaining to cocoa plantation sustainability is the amount of time it takes for a cocoa tree to produce pods. A solution to this is to change the type of cocoa tree being farmed. In Ghana, a hybrid cocoa tree yields two crops after three years rather than the typical one crop after five years.<ref name="ReferenceA"/>

====Fair trade cocoa companies====
Following are chocolate companies that use all or some fair trade cocoa in their chocolate:
*[[Ben & Jerry's]]
*[[Chocolate and Love]]
*[[Divine Chocolate]]
*[[Green & Black's]]
*[[Guittard Chocolate Company]]
*Endangered Species Chocolate
*[[Chocolove]]
*[[Dagoba Chocolate]]
*[[Theo Chocolate]]

===Textiles===
Fair trade textiles are primarily made from fair trade cotton. They are frequently grouped with fair trade crafts and goods made by artisans in contrast to cocoa, coffee, sugar, tea, and honey, which are agricultural commodities.<ref name="ReferenceA"/>

====Locations====
India and West Africa are the primary exporters of fair trade cotton, although many countries grow fair trade cotton.<ref name="Bassett, Thomas J 2010">Bassett, Thomas J. "Slim pickings: Fairtrade cotton in West Africa." Geoforum, 2010. 41(1): 44-55</ref><ref name="Littrell, M. A. 1998">Littrell, M. A., and M. A. Dickson. "Fair Trade Performance in a Competitive Market." Clothing and Textiles Research Journal 16.4 (1998): 176-89</ref> Textiles and clothing are exported from Hong Kong, Thailand, Malaysia, and Indonesia.<ref name="ReferenceA"/>

====Labor====
Labor is different for textile production than for agricultural commodities because textile production takes place in a factory, not on a farm. Children provide a source of cheap labor, and child labor is prevalent in Pakistan, India, and Nepal. Fair trade cooperatives ensure fair and safe labor practices, including disallowing child labor.<ref name="Grimes, Kimberly M. 2000">Grimes, Kimberly M., and B. Lynne Milgram. Artisans and Cooperatives: Developing Alternative Trade for the Global Economy. Tucson: University of Arizona, 2000.</ref> Fair trade textile producers are most often women in developing countries. They struggle with meeting the consumer tastes in North America and Europe. In Nepal, textiles were originally made for household and local use. In the 1990s, women began joining cooperatives and exporting their crafts for profit. Now handicrafts are Nepal's largest export. It is often difficult for women to balance textile production, domestic responsibilities, and agricultural work. Cooperatives foster the growth of democratic communities in which women have a voice despite being historically in underprivileged positions.<ref name="Grimes, Kimberly M. 2000"/> For fair trade textiles and other crafts to be successful in western markets, [[World Fair Trade Organization]]s require a flexible workforce of artisans in need of stable income, links from consumers to artisans, and a market for quality ethnic products.<ref name="Littrell, M. A. 1998"/> However, making cotton and textiles fair trade does not always have a positive impact on laborers. Burkina Faso and Mali export the largest amount of cotton in Africa. Although many cotton plantations in these countries attained fair trade certification in the 1990s, participation in fair trade further ingrains existing power relations and inequalities that cause poverty in Africa rather than challenging them. Fair trade does not do much for farmers when it does not challenge the system that marginalizes producers. Despite not empowering farmers, the change to fair trade cotton has positive effects including female participation in cultivation.<ref name="Bassett, Thomas J 2010"/>

Textiles and garments are intricate and require one individual operator, in contrast to the collective farming of coffee and cocoa beans. Textiles are not a straightforward commodity because to be fairly traded, there must be regulation in cotton cultivation, dyeing, stitching, and every other step in the process of textile production.<ref name="ReferenceA"/> Fair trade textiles must not be confused with the sweat-free movement although the two movements intersect at the worker level.<ref name="ReferenceB"/>

Forced or unfair labor in textile production is not limited to developing countries. Charges of use of sweatshop labor are endemic in the United States. Immigrant women work long hours and receive less than minimum wage. In the United States, there is more of a stigma against child labor than forced labor in general. Consumers in the United States are willing to suspend the importation of textiles made with child labor in other countries but do not expect their exports to be suspended by other countries, even when produced using forced labor.<ref>Bhagwati, Jagdish. "Trade Liberalisation And 'Fair Trade' Demands: Addressing The Environmental And Labour Standards Issues." World Economy 18.6 (1995): 745-759</ref>

====Fair trade clothing and textile companies====
{{unreferenced section|date=December 2012}}
Following are companies that use fair trade production and/or distribution techniques for clothing and textiles:
*[[Maggie's Organics]]
*[[Cherie Amie]]
*prAna
*HAE Now
*Good & Fair Clothing Co.
*Fair Indigo
*Indigenous
*American Apparel
*[http://www.yabal-handicrafts.com Y'abal Handicrafts]

===Large companies and fair trade commodities===
Large transnational companies have begun to use fair trade commodities in their products. In April 2000, [[Starbucks]] began offering fair trade coffee in all of their stores. In 2005, the company promised to purchase ten million pounds of fair trade coffee over the next 18 months. This would account for a quarter of the fair trade coffee purchases in the United States and 3% of Starbucks' total coffee purchases.<ref name="ReferenceC"/> The company maintains that increasing its fair trade purchases would require an unprofitable reconstruction of the supply chain.<ref>Macdonald, Kate. "Globalising Justice within Coffee Supply Chains? Fair Trade, Starbucks and the Transformation of Supply Chain Governance." Third World Quarterly 28.4 (2007): 793-812</ref> Fair trade activists have made gains with other companies: [[Sara Lee]] in 2002 and [[Proctor & Gamble]] (the maker of [[Folgers]]) in 2003 agreed to begin selling a small amount of fair trade coffee. [[Nestle]], the world's biggest coffee trader, began selling a blend of fair trade coffee in 2005.<ref name="ReferenceC"/> In 2006, [[The Hershey Company]] acquired [[Dagoba]], an organic and fair trade chocolate brand.

Much contention surrounds the issue of fair trade products becoming a part of large companies. Starbucks is still only 3% fair trade - enough to appease consumers, but not enough to make a real difference to small farmers, according to some activists. The ethics of buying fair trade from a company that is not committed to the cause are questionable; these products are only making a small dent in a big company even though these companies' products account for a significant portion of global fair trade.<ref name="ReferenceC"/>

{| class="wikitable"
|-
! Business Type !! Engagement with fair trade products
|-
| || '''Highest'''
|-
| Fair Trade Organizations || Equal Exchange
|-
| || Global Crafts
|-
| Values-driven Organizations || The Body Shop
|-
| || Green Mountain Coffee
|-
| Pro-active Socially Responsible Businesses || Starbucks
|-
| || Whole Foods
|-
| Defensive Socially Responsible Businesses || Proctor & Gamble
|-
| || '''Lowest'''
|} <ref name="ReferenceB"/>

===Luxury Commodities===

There have been efforts to introduce fair trade practices to the luxury industry, particularly for gold and diamonds.

====Diamonds and Sourcing====

In parallel to efforts to commoditize diamonds, some industry players have launched campaigns to introduce benefits to mining centers in the Third World. Rapaport Fair Trade was established with the goal "to provide ethical education for jewelry suppliers, buyers, first time or seasoned diamond buyers, social activists, students, and anyone interested in jewelry, trends, and ethical luxury."<ref>[http://www.rapaportfairtrade.com/What-is-RapFT/About.aspx Rapaport Fair Trade - About Us]</ref>

The company's founder, [[Martin Rapaport]], as well as [[Kimberley Process]] initiators [[Ian Smillie]] and [[Global Witness]], are among several industry insiders and observers who have called for greater checks and certification programs among many other programs that would ensure protection for miners and producers in Third World countries. Smillie and Global Witness have since withdrawn support for the Kimberley Process.

Other concerns in the diamond industry include working conditions in diamond cutting centers as well as the use of child labor. Both of these concerns come up when considering issues in Surat, India.<ref>[http://www.foreignpolicy.com/articles/2013/01/02/rough_cut Rough Cut] Foreign Policy, 2 Jan 2013</ref>

====Gold====

Brilliant Earth has committed itself to using fair-trade-certified gold.<ref>[http://www.sfgate.com/style/article/Couple-s-ringing-endorsement-of-ethical-jewelry-3217614.php Couple's ringing endorsement of ethical jewelry] SFGate</ref> In February 2011, the United Kingdom's Fairtrade Foundation became the first NGO to begin certifying gold under the fair trade rubric. Fair Trade USA, however, hasn't taken that step as of summer 2012.

==Comparison with conventional trade==
Compared with conventional trade, fair trade reduces vulnerability of farmers <ref name="Bacon">{{cite web|last=Bacon|first=Christopher|title=Confronting the Coffee Crisis: Can Fair Trade, Organic, and Specialty Coffees Reduce Small-Scale Farmer Vulnerability in Northern Nicaragua?|url=http://www.sciencedirect.com/science/article/pii/S0305750X04002062|accessdate=31 December 2012}}</ref> and limits environnemental damage.<ref>{{cite book|last=Jaffee|first=Daniel|title=Brewing Justice: Fair Trade Coffee, Sustainability, And Survival|year=2007|publisher=University of California Press|pages=21|url=http://books.google.ca/books?hl=en&lr=&id=g2wA6vCxzV4C&oi=fnd&pg=PR5&dq=comparison+fair+trade+&ots=FjiPcVTAXv&sig=QJZ14HjCi6oo5iVTNUDRhOpJjSU#v=onepage&q=comparison&f=false}}</ref>

==Politics==
{{See also|Protectionism|Dumping (pricing policy)}}

===European Union===
[[Image:Faitrade display.jpg|thumb|Display of Fairtrade products at the [[Derbyshire County Council]] head office]]
In 1994, the European Commission prepared the "Memo on alternative trade" in which it declared its support for strengthening Fair Trade in the South and North and its intention to establish an EC Working Group on Fair Trade. Furthermore, the same year, the [[European Parliament]] adopted the "Resolution on promoting fairness and solidarity in North South trade" (OJ C 44, 14.2.1994), a resolution voicing its support for fair trade.

In 1996, the [[Economic and Social Committee]] adopted an "Opinion on the European 'Fair Trade' marking movement". A year later, in 1997, the document was followed by a resolution adopted by the European Parliament, calling on the [[European Commission|Commission]] to support Fair Trade banana operators. The same year, the European Commission published a survey on "Attitudes of EU consumers to Fair Trade bananas", concluding that Fair Trade bananas would be commercially viable in several EU Member States.<ref name="FINE2006">FINE (2006). Business Unusual. Brussels: Fair Trade Advocacy Office</ref>

In 1998, the European Parliament adopted the "Resolution on Fair Trade" (OJ C 226/73, 20.07.1998), which was followed by the Commission in 1999 that adopted the "Communication from the Commission to the Council on 'Fair Trade'" COM(1999) 619 final, 29.11.1999.

In 2000, public institutions in Europe started purchasing Fairtrade Certified coffee and tea. Furthermore, that year, the [[Cotonou Agreement]] made specific reference to the promotion of Fair Trade in article 23 g) and in the Compendium. The European Parliament and Council Directive 2000/36/EC also suggested promoting Fair Trade.<ref name="FINE2006" />

In 2001 and 2002, several other EU papers explicitly mentioned fair trade, most notably the 2001 Green Paper on [[Corporate Social Responsibility]] and the 2002 Communication on Trade and Development.

In 2004, the [[European Union]] adopted the "Agricultural Commodity Chains, Dependence and Poverty – A proposal for an EU Action Plan", with a specific reference to the Fair Trade movement which has "been setting the trend for a more socio-economically responsible trade." (COM(2004)0089).

In 2005, in the European Commission communication "Policy Coherence for Development – Accelerating progress towards attaining the Millennium Development Goals", (COM(2005) 134 final, 12.04.2005), fair trade is mentioned as "a tool for poverty reduction and sustainable development".<ref name="FINE2006" />

And finally, on July 6 in 2006, the European Parliament unanimously adopted a resolution on fair trade, recognizing the benefits achieved by the Fair Trade movement, suggesting the development of an EU-wide policy on Fair Trade, defining criteria that need to be fulfilled under fair trade to protect it from abuse and calling for greater support to Fair Trade (EP resolution "Fair Trade and development", 6 July 2006). "This resolution responds to the impressive growth of Fair Trade, showing the increasing interest of European consumers in responsible purchasing," said [[European Green Party|Green]] MEP [[Frithjof Schmidt]] during the plenary debate. [[Peter Mandelson]], EU Commissioner for External Trade, responded that the resolution will be well received at the [[European Commission|Commission]]. "Fair Trade makes the consumers think and therefore it is even more valuable. We need to develop a coherent policy framework and this resolution will help us."<ref>Frithjof Schmidt MEP (2006). [http://www.frithjof-schmidt.de/Parliament_in_suppor.163.0.html Parliament in support of Fair Trade] URL accessed on August 2, 2006.</ref>

===France===
In 2005, French [[French National Assembly|parliament]] member [[Antoine Herth]] issued the report "40 proposals to sustain the development of Fair Trade". The report was followed the same year by a law, proposing to establish a commission to recognize fair trade Organisations (article 60 of law no. 2005-882, Small and Medium Enterprises, 2 August 2005).<ref name="FINE2006" />

In parallel to the legislativents, also in 2006, the French chapter of [[International Organization for Standardization|ISO]] (AFNOR) adopted a reference document on Fair Trade after five years of discussion.

===Italy===
In 2006, Italian lawmakers started debating how to introduce a law on fair trade in [[Parliament of Italy|Parliament]]. A consultation process involving a wide range of stakeholders was launched in early October.<ref>Nembri, Antonietta (October 4, 2006) [http://www.vita.it/articolo/index.php3?NEWSID=72176 Equo e solidale: un convegno sul futuro normativo.] URL accessed on October 28, 2006.</ref> A common definition of fair trade was most notably developed. However, its adoption is still pending as the efforts were stalled by the [[2008 Italian political crisis]].

===Netherlands===
The Dutch province of [[Groningen (province)|Groningen]] was sued in 2007 by coffee supplier [[Douwe Egberts]] for explicitly requiring its coffee suppliers to meet fair trade criteria, most notably the payment of a minimum price and a development premium to producer cooperatives. Douwe Egberts, which sells a number of coffee brands under self-developed ethical criteria, believed the requirements were discriminatory. After several months of discussions and legal challenges, the province of Groningen prevailed in a well-publicized judgement. Coen de Ruiter, director of the [[Stichting Max Havelaar|Max Havelaar Foundation]], called the victory a landmark event: "it provides governmental institutions the freedom in their purchasing policy to require suppliers to provide coffee that bears the fair trade criteria, so that a substantial and meaningful contribution is made in the fight against poverty through the daily cup of coffee".<ref>Max Havelaar Foundation (2007). [85.82.218.199/fileadmin/Bruger_filer/Dokument_database/IKAvaerktoej/EU_siden/Max_Havalaar.pdf Dutch Province of Groningen wins summary brought by Doug Egberts and can continue specifying fair trade coffee]</ref>

==Criticisms==
{{Criticism section|date=February 2013}}
In spite of studies showing Fair Trade efficiency,<ref name="Bacon"/> some studies have shown limitations to Fair Trade benefits. Sometimes the criticism is intrinsic to Fair Trade, sometimes it depends on the broader context such as government help or volatile coffee prices in the global market <ref>{{cite web|last=Utting-chamorro|first=Karla|title=Does fair trade make a difference? The case of small coffee producers in Nicaragua|url=http://www.tandfonline.com/doi/abs/10.1080/09614520500075706|accessdate=31 December 2012}}</ref>

===Ethical basis of criticisms===
Consumers have been shown to be content paying higher prices for Fairtrade products, in the belief that this helps the very poor.<ref>See for example Costa. (2010). Costa Coffee Hosts National 'Foundation Day' To Encourage Ethical Coffee Consumption. Retrieved from http://www.franchising.com/news/20080612_costa_coffee_hosts_national_foundation_day_to_enco.html ; Niemi, N. (2010). “Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers.” Journal of Business Ethics , 97:257-270; Trudel, R., & Cotte, J. (2009). Does it pay to be good? MIT Sloan Management Review. , Winter; Arnot, C., Boxall, P., & Cash, S. (2006). Do ethical consumers care about price? A revealed preference analysis of Fair Trade coffee purchases. Canadian Journal of Agricultural Economics , 54: 555-565.</ref> The main ethical criticism of Fairtrade is that this premium over non-Fairtrade products does not reach the producers and is instead collected by businesses, employees of co-operatives or used for unnecessary expenses. Furthermore, research has cited the implementation of certain Fairtrade standards as a cause for greater inequalities in markets where these rigid rules are inappropriate for the specific market.<ref>Booth, Philip “Don’t bully the faithful into buying Fairtrade", The Catholic Herald, 20 February 2009; Booth, P. and L. Whetstone (2007) ‘Half a Cheer for Fair Trade’, Economic Affairs, 27, 2, 29–36; Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011 (DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm
Carimentrand, A., & Ballet, J. (2010). When Fair Trade increases unfairness: The case of quinoa from Bolivia. http://ethique.perso.sfr.fr/Working%20paper%20FREE-Cahier%20FREE%20n%B05-2010.pdf: Working paper FREE-Cahier FREE n°5-2010; Doppler, F., & Cabañas, A. A. (2006). Fair Trade: Benefits and Drawbacks for Producers. Puente @ Europa - , Año IV, Número 2 - Junio 2006, 53-56.</ref>

===What happens to the money===
====Little money reaches the Third World{{Dubious|date=February 2013}}{{nonspecific|date=February 2013}}{{citation needed|date=February 2013}}====
The Fairtrade Foundation does not monitor how much extra retailers charge for Fairtrade goods, 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. One British café chain was passing on less than one percent of the extra charged to the exporting cooperative;<ref name="EthicalObjections"/> in Finland, Valkila, Haaparanta and Niemi<ref>Valkila, J., Haaparanta, P., & Niemi, N. (2010). “Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers.” Journal of Business Ethics , 97:257-270.</ref> found that consumers paid much more for Fairtrade, and that only 11.5% reached the exporter. Kilian, Jones, Pratt and Villalobos<ref>Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research , 59(3), 322–330.</ref> talk of US Fairtrade coffee getting $5 per lb extra at retail, of which the exporter would have received only 2%. Mendoza and Bastiaensen<ref>Mendoza, R., & J. Bastiaensen, J. (2003). “Fair Trade and the Coffee Crisis in the Nicaraguan Segovias.” Small Enterprise Development , 14(2), 36–46.</ref> calculated that in the UK only 1.6% to 18% of the extra charged for one product line reached the farmer. All these studies assume that the importers paid the full Fairtrade price, which is not necessarily the case.<ref>Raynolds, L. T. (2009). Mainstreaming Fair Trade Coffee: from Partnership to Traceability. World Development , 37 (6) 1083-1093, p. 1089); Valkila, J., Haaparanta, P., & Niemi, N. (2010). Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers. Journal of Business Ethics , 97:257-270 p. 264), Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 3018-3025, pp. 3022-3); Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics , 86:3-26, , p. 12); Barrientos, S., Conroy, M. E., & Jones, E. (2007). Northern Social Movements and Fair Trade. In L. Raynolds, D. D. Murray, & J. Wilkinson, Fair Trade: The Challenges of Transforming Globalization (pp. 51–62). London and New York: Routledge.
Quoted by Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics , 86:3-26
, p. 21.</ref>

====Less money reaches farmers{{Dubious|date=February 2013}}{{nonspecific|date=February 2013}}{{citation needed|date=February 2013}}====
The Fairtrade Foundation does not monitor how much of the extra money paid to the exporting cooperatives reaches the farmer. The cooperatives incur costs in reaching the Fairtrade political standards, and these are incurred on all production, even if only a small amount is sold at Fairtrade prices. The most successful cooperatives appear to spend a third of the extra price received on this: some less successful cooperatives spend more than they gain. While this appears to be agreed by proponents and critics of Fairtrade,<ref>e.g. Utting-Chamorro, K (2005). Does Fairtrade make a difference? The case of small coffee producers in Nicaragua. Development in Practice, Volume 15, Numbers 3 and 4, June 2005, Berndt, C. E. (2007). Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.</ref> there is a dearth of economic studies setting out the actual revenues and what the money was spent on. FLO figures<ref name="Labelling">Fairtrade Labelling Organizations International.: 2010, Annual Report 2009-2010. Retrieved May 27, 2011, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/FLO_Annual-Report-2009_komplett_double_web.pdf</ref> are that 40% of the money reaching the [[Third World]] is spent on ‘business and production’ which would include these costs, as well as costs incurred by any inefficiency and corruption in the cooperative or the marketing system. The rest is stated to be spent on social projects, rather than being passed on to farmers.


There is no evidence that Fairtrade farmers get higher prices on average.{{citation needed|date=February 2013}} Anecdotes state that farmers were paid more or less by traders than by Fairtrade cooperatives. Few of these anecdotes address the problems of price reporting in Third World markets,<ref>See Bowbrick, P, “Are price reporting systems of any use?”, British Food Journal. 90(2) 65-69 March/April. 1988. Current international research on Third World market information systems is given at http://www.sim2g.org/.</ref> and few appreciate the complexity of the different price packages which may or may not include credit, harvesting, transport, processing, etc. Cooperatives typically average prices over the year, so they pay less than traders at some times, more at others. Bassett (2009)<ref>Bassett, T. (2009). Slim pickings: Fairtrade cotton in West Africa. Geoforum.</ref> is able to compare prices only where Fairtrade and non-Fairtrade farmers have to sell cotton to the same monopsonistic ginneries which pay low prices. Prices would have to be higher to compensate farmers for the increased costs they incur to produce Fairtrade. For instance, Fairtrade encouraged Nicaraguan farmers to switch to organic coffee, which resulted in a higher price per pound, but a lower net income because of higher costs and lower yields.<ref>Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research , 59(3), 322–330.; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 3018-3025;Wilson, B. R. (2009). Indebted to Fair Trade? Coffee and Crisis in Nicaragua. Geoforum.</ref>
There is no evidence that Fairtrade farmers get higher prices on average.{{citation needed|date=February 2013}} Anecdotes state that farmers were paid more or less by traders than by Fairtrade cooperatives. Few of these anecdotes address the problems of price reporting in Third World markets,<ref>See Bowbrick, P, “Are price reporting systems of any use?”, British Food Journal. 90(2) 65-69 March/April. 1988. Current international research on Third World market information systems is given at http://www.sim2g.org/.</ref> and few appreciate the complexity of the different price packages which may or may not include credit, harvesting, transport, processing, etc. Cooperatives typically average prices over the year, so they pay less than traders at some times, more at others. Bassett (2009)<ref>Bassett, T. (2009). Slim pickings: Fairtrade cotton in West Africa. Geoforum.</ref> is able to compare prices only where Fairtrade and non-Fairtrade farmers have to sell cotton to the same monopsonistic ginneries which pay low prices. Prices would have to be higher to compensate farmers for the increased costs they incur to produce Fairtrade. For instance, Fairtrade encouraged Nicaraguan farmers to switch to organic coffee, which resulted in a higher price per pound, but a lower net income because of higher costs and lower yields.<ref>Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research , 59(3), 322–330.; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 3018-3025;Wilson, B. R. (2009). Indebted to Fair Trade? Coffee and Crisis in Nicaragua. Geoforum.</ref>

Revision as of 13:50, 11 March 2013

paid to the exporting cooperatives reaches the farmer. The cooperatives incur costs in reaching the Fairtrade political standards, and these are incurred on all production, even if only a small amount is sold at Fairtrade prices. The most successful cooperatives appear to spend a third of the extra price received on this: some less successful cooperatives spend more than they gain. While this appears to be agreed by proponents and critics of Fairtrade,[1] there is a dearth of economic studies setting out the actual revenues and what the money was spent on. FLO figures[2] are that 40% of the money reaching the Third World is spent on ‘business and production’ which would include these costs, as well as costs incurred by any inefficiency and corruption in the cooperative or the marketing system. The rest is stated to be spent on social projects, rather than being passed on to farmers.

There is no evidence that Fairtrade farmers get higher prices on average.[citation needed] Anecdotes state that farmers were paid more or less by traders than by Fairtrade cooperatives. Few of these anecdotes address the problems of price reporting in Third World markets,[3] and few appreciate the complexity of the different price packages which may or may not include credit, harvesting, transport, processing, etc. Cooperatives typically average prices over the year, so they pay less than traders at some times, more at others. Bassett (2009)[4] is able to compare prices only where Fairtrade and non-Fairtrade farmers have to sell cotton to the same monopsonistic ginneries which pay low prices. Prices would have to be higher to compensate farmers for the increased costs they incur to produce Fairtrade. For instance, Fairtrade encouraged Nicaraguan farmers to switch to organic coffee, which resulted in a higher price per pound, but a lower net income because of higher costs and lower yields.[5]

Lack of evidence of impact

There have been very few attempts at fair trade impact studies. It would be methodologically and logically incorrect to use these attempts to conclude that Fairtrade in general does or does not have a positive impact.[6] Griffiths (2011)[7][unreliable source?] argues that few of these attempts meet the normal standards for an impact study, such as comparing the before and after situation, and having meaningful control groups. Serious methodological problems arise in sampling, in comparing prices, and from the fact that the social projects of Fairtrade do not usually aim to produce economic benefits.

Inefficient marketing system

One reason for low prices is that Fairtrade farmers have 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[8] if they wish to retain fairtrade status. 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.[9]

Corruption

The Fair Trade marketing system provides more opportunities for corruption than the normal marketing system; and less possibility of, or incentive for, controlling corruption. Corruption has been noted in false labelling of coffee as Fairtrade by retailers and by packers in the developing countries,[10] paying exporters less than the Fairtrade price for Fairtrade coffee (kickbacks)[11] failure to provide the credit and other services specified[12] theft or preferential treatment for ruling elites of cooperatives[13] not paying laborers the specified minimum wage[14]

Fairtrade harms other farmers

Overproduction argument

Critics argue that Fairtrade harms all non-Fairtrade farmers. Fairtrade claims that its farmers are paid higher prices and are given special advice on increasing yields and quality. Economists[9][15][unreliable source?][16][17][18][19] state that, if this is indeed so, Fairtrade farmers will increase production. As the demand for coffee is highly inelastic, a small increase in supply means a large fall in market price, so perhaps a million Fairtrade farmers get a higher price and 24 million others get a substantially lower price. Critics quote the example of farmers in Vietnam being paid over the world price in the 1980s, planting lots of coffee, then flooding the world market in the 1990s. The Fairtrade minimum price means that when the world market price collapses, it is the non-Fairtrade farmers, particularly the poorest, who have to cut down their coffee trees. This argument is supported by mainstream economists, not just free marketers. This argument falls away if, as critics and FLO state, farmers do not get a higher price.

Diverting aid from other farmers

Fairtrade supporters boast of ‘The Honeypot Effect’ – that cooperatives which become Fairtrade members then attract additional aid from other NGO charities, government and international donors as a result of their membership.[20] Typically there are now six to twelve other donors. Critics point out that this inevitably means that resources are being removed from other, poorer, farmers. It also makes it impossible to argue that any positive or negative changes in the living standards of farmers are due to Fairtrade rather than to one of the other donors.

Other ethical issues

Secrecy

Under EU law (Directive 2005/29/EC on Unfair Commercial Practices) the criminal offence of Unfair Trading is committed if (a) ‘it contains false information and is therefore untruthful or in any way, including overall presentation, deceives or is likely to deceive the average consumer, even if the information is factually correct’, (b) ‘it omits material information that the average consumer needs . . . and thereby causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise’ or (c) ‘fails to identify the commercial intent of the commercial practice . . . [which] causes or is likely to cause the average consumer to take a transactional decision that he would not have taken otherwise.’ Griffiths (2011)[7][unreliable source?] points to false claims that Fairtrade producers get higher prices, the almost universal failure to disclose the extra price charged for Fairtrade products, to disclose how much of this actually reaches the Third World, to disclose what this is spent on in the Third World, to disclose how much, if any, reaches farmers, and to disclose the harm that Fairtrade does to non-Fairtrade farmers. He also points to the failure to disclose when ‘the primary commercial intent’ is to make money for retailers and distributors in rich countries.

Imposing politics

The Fairtrade criteria are essentially political, and critics state that it is unethical to bribe Third World producers to adopt a set of political views that they may not agree with, and the donors providing the money may not agree with. In addition many of the failures of Fairtrade derive from these political views, such as the unorthodox marketing system imposed.[21][unreliable source?] Boersma (2002, 2009)[22] the founder of Fairtrade, and like minded people[23] are aiming at a new, non-capitalist way of running the market and the economy. This may not tie in with the objectives of producers, consumers, importers or retailers.

Unethical selling techniques

Booth says that the selling techniques used by some sellers and some supporters of Fairtrade are bullying, misleading, and unethical.[24] There are problems with the use of boycott campaigns and other pressure to force sellers to stock a product they think ethically suspect. However, the opposite has been argued, that a more participatory and multi-stakeholder approach to auditing might improve the quality of the process.[25] Some people argue that these practices are justifiable: that strategic use of labeling may help embarrass (or encourage) major suppliers into changing their practices. They may make transparent corporate vulnerabilities that activists can exploit. Or they may encourage ordinary people to get involved with broader projects of social change.[26]

Misleading volunteers

A lot of people volunteer to work to support Fairtrade. They may do unpaid work for firms, or market Fairtrade in schools, universities, local governments, or parliament. Crane and Davies’[27] study shows that distributors in developed countries make ‘considerable use of unpaid volunteer workers for routine tasks, many of whom seemed to be under the (false) impression that they were helping out a charity.’

Failure to monitor standards

There are complaints that the standards are inappropriate and may harm producers, sometimes making them work several months more for little return.[28][29][30][31][unreliable source?]

There have been claims that adherence to fair trade standards by producers has been poor and that enforcement of standards by Fairtrade is very weak. Notably by Christian Jacquiau[32] and by Paola Ghillani, who spent four years as president of Fairtrade Labelling Organizations[32] There are many complaints of poor enforcement problems: labourers on Fairtrade farms in Peru are paid less than the minimum wage;[33] some non-Fairtrade coffee is sold as Fairtrade[34] ‘the standards are not very strict in the case of seasonally hired labour in coffee production.’[35] ‘some fair trade standards are not strictly enforced’[36] supermarkets avoid their responsibility.[37] In 2006, a Financial Times journalist found that ten out of ten mills visited had sold uncertified coffee to co-operatives as certified. It reported that "The FT was also handed evidence of at least one coffee association that received Fairtrade certification despite illegally growing some 20 per cent of its coffee in protected national forest land.[38]

Trade justice and fair trade

Segments of the trade justice movement have also criticized fair trade in the past years for allegedly focusing too much on individual small producer groups while stopping short of advocating immediate trade policy changes that would have a larger impact on disadvantaged producers' lives. French author and RFI correspondent Jean-Pierre Boris championed this view in his 2005 book Commerce inéquitable.[39]

Political objections

There have been largely political criticisms of Fairtrade 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. Jacquiau is also a staunch supporter of significantly higher fair trade prices in order to maximize the impact, as most producers only sell a portion of their crop under fair trade terms.[40] It has been argued that the approach of 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, that is who possesses the power to determine the need of an ethic in the first instance, and subsequently command a particular ethical vision as the truth."[41]

See also

Wikimedia Commons has media related to Fair trade.

Notes and references

  1. ^ e.g. Utting-Chamorro, K (2005). Does Fairtrade make a difference? The case of small coffee producers in Nicaragua. Development in Practice, Volume 15, Numbers 3 and 4, June 2005, Berndt, C. E. (2007). Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University.
  2. ^ Fairtrade Labelling Organizations International.: 2010, Annual Report 2009-2010. Retrieved May 27, 2011, from http://www.fairtrade.net/fileadmin/user_upload/content/2009/resources/FLO_Annual-Report-2009_komplett_double_web.pdf
  3. ^ See Bowbrick, P, “Are price reporting systems of any use?”, British Food Journal. 90(2) 65-69 March/April. 1988. Current international research on Third World market information systems is given at http://www.sim2g.org/.
  4. ^ Bassett, T. (2009). Slim pickings: Fairtrade cotton in West Africa. Geoforum.
  5. ^ Kilian, B., Jones, C., Pratt, L., & Villalobos, A. (2006). “Is Sustainable Agriculture a Viable Strategy to Improve Farm Income in Central America? A Case Study on Coffee”. Journal of Business Research , 59(3), 322–330.; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 3018-3025;Wilson, B. R. (2009). Indebted to Fair Trade? Coffee and Crisis in Nicaragua. Geoforum.
  6. ^ Griffiths, Peter, ‘Lack of rigour in defending Fairtrade: a reply to Alistair Smith, Economic Affairs 30 (2) 40-96, June 2010 Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm
  7. ^ a b Cite error: The named reference EthicalObjections was invoked but never defined (see the help page).
  8. ^ Mendoza, R., & J. Bastiaensen, J. (2003). Fair Trade and the Coffee Crisis in the Nicaraguan Segovias. Small Enterprise Development , 14(2), p. 42.
  9. ^ a b Brink, Lindsey. (2004). Grounds for Complaint. URL accessed on September 25, 2006.
  10. ^ Weitzman, H. (2006, September 8). The bitter cost of ‘Fair Trade’ coffee. Financial Times .
  11. ^ Raynolds, L. T. (2009). Mainstreaming Fair Trade Coffee: from Partnership to Traceability. World Development , 37 (6) p. 1089);Valkila, J., Haaparanta, P., & Niemi, N. (2010). Empowering Coffee Traders? The Coffee Value Chain from Nicaraguan Fair Trade Farmers to Finnish Consumers. Journal of Business Ethics , 97: p264; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 3018-3025.
  12. ^ Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics , 86:3-26; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 pp. 3022-3); Barrientos, S., Conroy, M. E., & Jones, E. (2007). Northern Social Movements and Fair Trade. In L. Raynolds, D. D. Murray, & J. Wilkinson, Fair Trade: The Challenges of Transforming Globalization (pp. 51–62). London and New York: Routledge.; Mendoza, R. (2000). The hierarchical legacy in coffee commodity chains. In R. Ruben, & J. Bastiaensen, Rural development in Central America. New York: St. John’s Press, p.34–9; Mendoza, R., & J. Bastiaensen, J. (2003). Fair Trade and the Coffee Crisis in the Nicaraguan Segovias. Small Enterprise Development , 14(2), p. 42; Moore, G., Gibbon, J., & Slack, R. (2006). The mainstreaming of Fair Trade: a macromarketing perspective. Journal of Strategic Marketing , 14 329-352; Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics , 86: p. 12).
  13. ^ ; Mendoza, R., & J. Bastiaensen, J. (2003). Fair Trade and the Coffee Crisis in the Nicaraguan Segovias. Small Enterprise Development , 14(2), 36–46; Berndt, C. E. (2007). Is Fair Trade in coffee production fair and useful? Evidence from Costa Rica and Guatemala and implications for policy. Washington DC.: Mercatus 65 Policy Series, Policy Comment 11, Mercatus Centre, George Mason University)
  14. ^ Weitzman, H. (2006, September 8). The bitter cost of ‘Fair Trade’ coffee. Financial Times; Weitzman, H. (2006, September 9). ‘'Ethical-coffee’ workers paid below legal minimum. Financial Times ; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 p. 3023)
  15. ^ e.g.Griffiths, P. (2008) ‘Why Fairtrade Isn’t Fair’, Prospect, August Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm
  16. ^ Booth, P. and L. Whetstone (2007) ‘Half a Cheer for Fair Trade’, Economic Affairs, 27, 2, 29–36; Sidwell, M. (2008) Unfair Trade, London: Adam Smith Institute.
  17. ^ Harford, T: "The Undercover Economist.", 2005
  18. ^ Sam Bowman (11 March 2011). "Markets, poverty, and Fair Trade". Adam Smith Institute. Retrieved 2011-09-30.
  19. ^ "Voting with your trolley". The Economist. Dec 7, 2006.
  20. ^ e.g. Utting, K. (2009). Assessing the impact of Fair Trade Coffee: Towards an Integrative Framework. Journal of Business Ethics , 86:127-149. p. 141). ; Murray, D., Raynolds, L., & Taylor, P. (2003). One cup at a time: Poverty alleviation and Fair Trade coffee in Latin America. Colorado State University; Luetchford P (2006). Brokering Fairtrade: relations between coffee producers and Alternative Trade Organizations - a view from Costa Rica' in D. Lewis and D. Mosse (eds), Development Brokers and Translators: the Ethnography of Aid and Agencies, Kumarian Press, Bloomfield; CT Ronchi, L (2002a). The Impact of Fairtrade on Producers and their Organisations. A Case Study with COOCAFE in Costa Rica; Valkila, J. (2009). Fair Trade organic coffee production in Nicaragua - Sustainable development or a poverty trap? Ecological Economics , 68 p. 3024
  21. ^ e.g. Booth, Philip "Don’t bully the faithful into buying Fairtrade", The Catholic Herald, 20 February 2009; Booth, P. and L. Whetstone (2007) ‘Half a Cheer for Fair Trade’, Economic Affairs, 27, 2, 29–36; Griffiths, P., ‘Ethical objections to Fairtrade’ Journal of Business Ethics July 2011 (DOI) 10.1007/s10551-011-0972-0 www.springerlink.com Accessed at http://www.griffithsspeaker.com/Fairtrade/why_fair_trade_isn.htm;
  22. ^ Boersma, F. (2009). The urgency and necessity of a different type of market: the perspective of producers organized within the Fair Trade market. Journal of Business Ethics , 86:51-61; Boersma, F. V. (2002). Poverty Alleviation through Participation in Fair Trade Coffee Networks: The Case of UCIRI, Oaxaca, Mexico. Retrieved from http://www.colostate.edu/Depts/Sociology/FairTradeResearchGroup.
  23. ^ e.g. Audebrand, L., & Pauchant, T. (2009). Can the Fair Trade Movement enrich Traditional Business Ethics? An Historical Study of its founders in Mexico. Journal of Business Ethics , 87:343-353; Gendron, C., V., B., & Rance, A. (2009). The institutionalization of Fair Trade: more than just a degraded form of social action. Journal of Business Ethics , 86:63-79; Reed, D. (2009). What do Corporations have to do with Fair Trade? Positive and normative analysis from a value chain perspective. Journal of Business Ethics , 86:3-26; McMurtry, J. (2009). Ethical Value-Added: Fair Trade and the Case of Cafe Fenenino. Journal of Business Ethics , 86:27-49.
  24. ^ Booth, Philip "Don’t bully the faithful into buying Fairtrade", The Catholic Herald, 20 February 2009; Booth, P. and L. Whetstone (2007) ‘Half a Cheer for Fair Trade’, Economic Affairs, 27, 2, 29–36; Booth, P. (2008). The Economics of Fairtrade: a Christian perspective. London: Institute of Economic Affairs http://www.iea.org.uk/record.jsp?type=book&ID=437;
  25. ^ http://www.ntd.co.uk/idsbookshop/details.asp?id=807
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  29. ^ Moberg M (2005). “Fairtrade and Eastern Caribbean Banana Farmers: Rhetoric and Reality in the Anti-Globalization Movement.” Human Organization 64:4-16, Cited in Nelson and Pound (2009) p 10.;
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  38. ^ "ref name="ft.com">"FT.com / Americas - The bitter cost of 'fair trade' coffee".
  39. ^ Boris, Jean-Pierre. (2005). Commerce inéquitable. Hachette Littératures. Paris.
  40. ^ Jacquiau, Christian. (2006). Les Coulisses du Commerce Équitable. Éditions Mille et Une Nuits. Paris.
  41. ^ Catherine S. Dolan (2008), Research in Economic Anthropology, "Arbitrating risk through moral values: the case of Kenyan fairtrade", Volume 28, Pages 271-296

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