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How Does Fair Trade Work and Who Benefits?

In a nutshell, the farmers and communities where the Fair Trade Certified product was produced benefit from your purchases.

Fair Trade certification provides poor farmers and farm workers with guaranteed minimum prices, decent work conditions and fair wages to prevent their exploitation. Without Fair Trade, farmers often have no alternative but to take whatever small amount is offered for their products, and farm workers may be subject to harsh working conditions, discrimination, and other abuses. Fair Trade also encourages sustainable farming practices and supports direct trade to eliminate exploitive middlemen.

coop

How it works

For certification, Fair Trade USA requires farmers to be organized into a self-governing body, such as a cooperative, so that workers have a voice and make decisions as a group. These organizations also come into play in decisions about how the product is sold. A minimum price is set for Fair Trade goods that guarantees producer groups are compensated fairly for their crops and ensures a decent standard of living. When the market price is higher than the established minimum price, the buyer pays the higher market price.

There's also an additional premium paid to the farmer organization that is to be used for social, environmental and economic development projects in their communities. The farmers and workers decide democratically by committee how to invest this premium.

Without Fair Trade, the farmer would go by himself to a local village to sell his own crops, where middlemen might cheat him. Now farmers sell through their farmer organization and know the market rates. This gives them more bargaining power — which means they receive fairer pay for their crop. It also cuts out the middleman, so more money ends up directly with the farmers and they are less likely to be cheated out of fair payment.

#Community benefits

Your Fair Trade purchases also impact communities in many ways. In Sri Lanka, Fair Trade premiums have enabled the construction of clean water sources and schools, as well as funded scholarships, education programs and a vast array of other beneficial projects.

The way in which Fair Trade funds are spent varies, as does the structure for making funding decisions. But whether it’s a cooperative of small farmers (as in the case with Frontier Co-op’s Fair Trade Certified spices from Sri Lanka) or a large tea operation with a joint worker-management committee, the people making these decisions know the needs of their communities.

Fair Trade premiums paid to the small co-op of cocoa farmers in the Dominican Republic that supplies our organic Fair Trade Certified Cocoa Powder helped build community centers and dig wells for potable water in their communities.

In rural India, the premiums from Fair Trade tea like that Frontier Co-op sells were used to build a school and fund teacher salaries and scholarships, start a reforestation program, construct a wind farm to provide power for the community, and build a modern hospital powered by methane gas recovered from animal waste to provide healthcare to tea farm workers and their families.

Throughout the world, communities with local control over how their Fair Trade premiums are spent are using the funds to meet their needs and create better lives for themselves.

School children in Madagascar, where Frontier’s Fair Trade Certified Vanilla Beans are grown.

village

Brighter futures

We know that the people in our supplier communities are working hard for a better life. And, they want their children’s lives to be better than their own — the same hope we have for our own children. Buying Fair Trade products is one way you can help them achieve those goals.