Is it possible for small producers to make a decent living in the new global market? The Fair Trade movement has tried to positively answer that basic question for the last 50 years. Consumers are the major force behind the economic and political success of Fair Trade. Even conventional trade companies have been influenced by Fair Trade.
Consumer and institutional concern in agricultural development and the effects of the current trade system on small producers has led to an innovative alliance: consumers, NGOs, co-operation agencies and charity organisations have come together to establish the first Fair Trade initiatives.
They introduced a new trade logic: small producers should sell their products as directly as possible to the conscious consumer and thus bypass the conventional trade system. So producers built their own co-operatives and logistic solutions. After a short time, small producers and market organisations were controlling their own chains of production, trade and distribution. Pioneers of the movement, such as Traidcraft in the UK, inspired initiatives all over Europe, the USA, Canada and Japan.
All these activities are aimed at giving producers easy access to markets and financing and therefore boost the social and economic development of agricultural communities all over the world. Consumers get products with a guarantee of origin, getting to know about the circumstances of production, providing them with a "Feel good"-factor.
The criteria for this market were established by Alternative Trade Organisations (ATO) and by fair trade product certification bodies (FairTrade Labelling Organizations International - FLO).
The most important criteria are:
- Direct contact between producers and the consumer market
- Transparency within the production and trade chains
- Transfer of market information to the producers
- Fixed minimum price for the products
- Democratically organised producers
- Trade benefits reaching the entire production community
- National and international (labour) legislation must be respected
The success of the Fair Trade movement has not pass by conventional companies unnoticed. Ordinary supermarkets have begun to cater to the growing number of consumers of fair trade products.
Furthermore, Fair Trade has raised a discussion about social values in production and trade, which has heavily affected multinationals like Nike and Chiquita Brands. Fair Trade initiatives are one of the main sources for the growing interest of the business world in social issues. Presence of Fair Trade products in supermarkets have also lead to increased awareness of consumers and producers.
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