Fair Trade 101 // Part 1: Three Names, Three Meanings

January 18, 2013

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Fair Trade 101 is 3-part series that aims to explore: the true meanings of fair trade, Fair Trade and Fairtrade; the impact of Fair Trade in the global market; and Fair Trade label interpretation.

Go to Google and type in “fair trade.” Here’s what you’ll find: fair trade, Fair Trade, Fairtrade. While they seem interchangeable, they’re not. Confused? Believe it or not, each of terms has a unique meaning. To help differentiate between these terms, let’s use Utamtsi as an example.

Utamtsi, an organic coffee company, promotes fair trade and is Fair Trade-certified; however, it is not Fairtrade. So, what does this all mean?

The term “fair trade” is vague and, therefore, can be widely interpreted. There is no set definition. On the other hand, “Fair Trade” (or “Fair trade”) refers to a broad social movement. FINE, a conglomeration of the four largest international Fair Trade organizations, defines Fair Trade as:

“…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 social rights of, marginalized producers and workers – especially in the [global] South.”

Generally speaking, the Fair Trade movement promotes sustainability and better trading conditions for certain food and non-food items, especially those from the developing world. The main goal is to empower and assist producers and workers who are often marginalized in the global market system. Fair Trade partners may choose to reach this objective by offering producers: guaranteed and minimum prices; access to credit; long-term relationships or contracts; and higher labor and environmental standards. Fair Trade companies often help finance development projects in producer communities, including; health care centers, water pumps and schools.

For example, Utamtsi provides a fair and fixed minimum price to its producers, with a two-year guarantee. There is accountability and constant communication between Utamtsi and the farmers of GIC Sondason, a Cameroonian-based cooperative that is partnered with Utamtsi. Each farming community has a delegate who represents the farmers from that particular village at frequent meetings hosted by GIC Sondason. At these meetings, the delegates report on the status of their crops, express concerns and problems, and how the cooperative can expand and improve. From a handicap facility in Baham to a medical clinic in Fondjomekwet to the capacity building opportunities in organic agriculture, Utamtsi funds a wide range of community outreach initiatives to many of the GIC Sondason cooperative members.

However, the specific manifestations of Fair Trade vary, depending on the certifying organization. Many different organizations certify products and other companies as Fair Trade. Utamtsi is certified through Naturland, a private company based in Germany that certifies both organic and Fair Trade products. One of the most well-known certifiers is Fairtrade International, whose name further blurs the distinction between Fairtrade and Fair Trade. “Fairtrade” refers specifically to products and organizations that are certified by Fairtrade International.

Now that you’ve been informed that there’s a difference between all of these terms, the question remains: what is the impact of fair trade, Fair Trade and Fairtrade products in the global market?

Next week→ Fair Trade 101 // Part II: The Impact

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