Matthew Loughran, EMBA
April 21, 2022
Fair Trade is an organized social movement and market-based approach that aims to help producers in developing countries achieve better trading conditions. Members of the movement advocate the payment of higher prices to exporters and improved social and environmental standards. In addition, the movement seeks to promote greater equity in international trading partnerships through dialogue, transparency, and respect.
What is Fair Trade?
Fair Trade is a movement that supports better prices, wages, and working conditions for farmers and artisans in developing countries. Fair Trade also promotes sustainable farming practices and ensures that products are made without child labor or forced labor. So when you buy Fair Trade, you can be sure that the people who made your product were treated fairly and paid a livable wage for their work.
There are many benefits to buying Fair Trade, both for the people who make the products and the consumers who purchase them. For example, Fair Trade products are often of higher quality than their conventional counterparts, thanks to the workers’ better-working conditions and wages. Fair Trade also supports sustainable farming practices, which are better for the environment. Moreover, buying Fair Trade helps combat climate change and helps protect wildlife and plants.
Research suggests that consumers in the United States pay significantly more for Fair Trade products than for comparable products made by traditional methods. The studies compare the price of Fair Trade to that of commonly available goods and services. The results show that consumers pay more for recycled products, marginally more for biobased products, and equally as much for conventionally produced products.
The impact of buying Fair Trade
In many parts of the world, people increasingly prefer to buy Fair Trade over conventional goods. For example, in developing countries, where around half of all fair trade goods are consumed, the premiums paid per pound for Fair Trade tend to be three to five times greater than the price of common goods. While in developed countries, the difference is less than two times greater, consumers there tend to be much more willing to pay the extra cost for sustainable products that are trusted to be ethically and sustainably produced.
Researchers estimate that consumers in the United States would have to pay $2.50 to $3.00 more per pound for Fair Trade products compared to traditional goods.
The History of Fair Trade
The Fair Trade movement began in the 1940s, intending to help farmers in developing countries achieve better trading conditions. This organized social movement and market-based approach aim to help producers advocate for the payment of higher prices to exporters and improve social and environmental standards. In addition, it promotes sustainable development by offering better trading conditions to and securing the rights of, marginalized producers and workers in developing countries.
In the 1970s, Fair Trade was introduced as an alternative to conventional trade. The first Fair Trade organization was founded in 1979, and since then, the movement has grown to include many different products, sizes, and industries. There are over 1,000 active Fair Trade organizations in the United States and Europe, representing $3.5 trillion in annual sales.
What are the benefits of Fair Trade?
There are many benefits of buying Fair Trade. When products are designated as Fair Trade, the farmers and workers who produced them were paid a fair wage, working in safe conditions and not being exploited. Additionally, Fair Trade products often have a smaller environmental impact since they are produced sustainably. Supporting Fair Trade also helps to combat child labor and human trafficking. When you buy Fair Trade, you can be confident that you support ethical and sustainable practices.
Fair Trade products are often made with high-quality ingredients, you can be sure you’re getting a quality product when you buy Fair Trade. So next time you’re shopping, look for the Fair Trade label and know that you’re supporting farmers and producers around the world while also getting a great product.
Matthew is an accomplished senior executive and social impact entrepreneur in the emerging technology field. Matthew is the principal at Midtown West Media, founder, and editor of Social Impact Insider. Matthew possesses a history of multilateral stakeholder alignment across public, private and faith-based sectors leveraging technology for social impact. Matthew holds a B.S. in Biology and Marketing from Loyola University Maryland; and an Executive M.B.A. from Washington State University. Matthew also holds multiple certifications in strategic board service including long-term growth, M&A strategy, cybersecurity, and strategic communications.
