Fair Trade Products: How can I know for sure that the claims are true?


Though they’ve been around for more than sixty years, fair trade products have been gaining popularity in recent years. They seem to have made the jump from something only bought only by earth mothers to a common way for mainstream shoppers to purchase responsibly. Though not without its critics from both sides of the political spectrum, the fair trade movement is gaining acceptance.

To be considered a fair trade product, the production process must meet several criteria, including the most obvious one – the producers must receive a fair price (negotiated locally) for their goods. Other criteria include providing safe working conditions (which includes not using forced labor or mistreating children) and being environmentally responsible. Most fair trade products are agricultural products, such as coffee and chocolate, or handicrafts.

A friend recently mentioned that her family is boycotting chocolate, other than fair trade chocolate, because of forced child labor on the farms that harvest cocoa beans. I admired her stand, but being a bit cynical, I wondered aloud whether I could buy a candy bar labeled “fair trade” and have the extra cost go directly into the pockets of the retailer or the distributor. (After all, the seller could argue, he and I had just made a “fair trade”) I might be willing to pay extra for a product if I knew that the people making it were really making a greater percentage of the profit, but how can I know for sure that the claims are true?

A little research taught me that yes, a product could be labeled “fair trade” without really ensuring that producers are receiving fair wages. However, products with a fairtrade (FLO) mark are generally a safe bet because to earn this label, the products must meet several specific standards, including accountability to an independent inspector. Similarly, organizations calling themselves fair trade organizations can earn an FTO label from the International Fair Trade Association if they meet certain standards.

FTO organizations need not be for-profit businesses; established charities can become fair trade organizations by helping producers set up a fair trade business. Ten Thousand Villages, a store with over 160 locations in the U.S., is a non-profit organization that has sold fair trade handicrafts since 1946.

As expected, fair trade products are generally more expensive than similar products traded in the conventional way. Just because producers are receiving more money for the goods doesn’t mean others in the supply chain are necessarily going to reduce their shares of the profit. However, the goal of improving living conditions in developing countries (without giving handouts) is a worthy one, and whether or not you agree that fair trade is the best way to do it, the fair trade movement has gained enough of a foothold to be around for a while. The movement’s recent growth and development has brought about greater internal regulation, so consumers are now more confident that the extra money they pay for fair trade goods really does make a difference, at least a small one.

Image courtesy of net_efekt

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One Response to Fair Trade Products: How can I know for sure that the claims are true?

  1. Aaron Stroud says:

    EconTalk recently devoted an entire episode to Fair Trade and Free Trade.

    It’s well worth a listen if you’re considering making a habit of buying “fair trade” products.

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