What is Fairtrade & how does it help farmers in developing countries?

Updated: Jun 16, 2020

Fairtrade is defined simply. It is when producers in developing countries are paid a fair price for their work. But what is it really and how does it work?

What is it?

"Nobody wants to eat something that was made by exploiting somebody else" - Jerry Greenfield

In 1992, the Fairtrade Foundation was founded in the UK by a group of organisations such as Catholic International Development Charity, Traidcraft and the Women’s Institute. Now, Fairtrade is an independent certification label which is part-owned by representatives of farmers and producers who make sure that these farmers and producers get paid a fair price for their produce. For most products sold under Fairtrade, terms such as a 'minimum price' is set to protect these farmers and producers.

Fairtrade operates in 74 countries across 4 continents including Africa, Argentina, and Sri Lanka and according to the Fairtrade Foundation, there are approximately 1.65 million farmers and workers in 1,226 producer organisations across the Fairtrade system.

How does it work?

"Sometimes when you look at the world, it's hard to feel you can make a difference. With Fairtrade, you can!" - Nigel Willerton

When businesses sell their products through Fairtrade, they are paid the ‘Fairtrade minimum price’. The business then receives a ‘Fairtrade premium’ which they can use in whatever way they choose. Some farmers use the Fairtrade Premium to invest democratically in their businesses and communities. This enables them to purchase essentials such as fertiliser, farm equipment and water pumps to support their farming business.

Buying Fairtrade products therefore helps workers in developing countries by requiring employees to pay wages that meet the living wage benchmarks of these countries.This allows workers to receive a stable income which can drastically improve opportunities for themselves and their families. Examples include elevation from poverty which can reduce the prevalence of malnutrition & disease whilst raising the number of children going to school.

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