Presented By GEETHA MOHAN IIPM

Fair trade
y Organized social movement and market-based approach that aims to help producers in developing countries make better trading conditions and promote sustainability. y The movement advocates the payment of a higher price to producers as well as higher social and environmental standards. y Focuses in particular on exports from developing countries to developed countries, most notably coffee, cocoa, sugar, tea, bananas, honey, cotton

History
y 1940-50:- 1st attempt to commercialize fair trade goods

in northern market by NGO S.

y 1946 and 1949 :- Ten Thousand Villages, an NGO

within the Mennonite Central Committee (MCC) and SERRV International were the first , to develop fair trade supply chains in developing countries.

Key Principles
y Provides market access to marginalized producers. y Aims to provide higher wages to producers. y Helping producers develop knowledge, skills and resources to improve their lives. y To raise awareness of the movement's philosophies among consumers in developed nations. y Specifies standards for importing , exporting, packaging & certification.

General structure of the movement

y FLO :- labeling system is the largest and most widely recognized standard setting and certification body for labeled Fair trade. y It regularly inspects and certifies producer organizations in more than 50 countries in Africa, Asia, and Latin America. y The Network of European World shops, created in 1994, is the umbrella network of 15 national World shop associations in 13 different countries all over Europe.

Contd
y FTF :- association of Canadian and American fair trade

wholesalers, importers, and retailers.

y Acts as a clearinghouse for information on fair trade

and providing resources and networking opportunities to its members.

Fair Trade Organisation

Fair-trade Labelling Organizations International(FLO) FLO-CERT inspected and certified producer organizations. The crops must be grown and harvested in accordance with the international Fair-trade standards set by FLO International. The supply chain must also have been monitored by FLO-CERT, to ensure the integrity of labeled products. Purports to guarantee fair prices, principles of ethical purchasing.

WFTO Fair Trade Organization

World Fair Trade Organization (WFTO) launched in 2004 a new Mark to identify fair trade organizations. allows consumers to recognize registered Fair Trade Organizations worldwide and guarantees. implemented regarding working conditions, wages, child labour, and the environment.

Alternative trading organizations

Mission-driven business aligned with the Fair trade movement To contribute to the alleviation of poverty in developing regions of the world. Collective action and commitment to moral principles based on social, economic and trade justice. Characteristic of ATO is that of equal partnership and respect. Humanizes" the trade process ..

WORLDSHOPS
y Specialized retail outlets offering and promoting Fair Trade products. y Not-for-profit organizations and run by locally based volunteer

networks y Spread across Europe, North America, Australia and New Zealand y Aims of Worldshop y Make trade direct and fair with trading partners y Pay producers fair price that guarantees substinence y Promote social development y Web Movement: Fair Trade a Day

POLITICS
y European Union y 1994: support for FT, EC Working Group on Fair Trade y 1997: FT bananas commercially viable y 1998: Draft Resolution on FT y 2000: Purchase of FT certified coffee and tea y 2004: "Agricultural Commodity Chains, Dependence and Poverty A proposal

for an EU Action Plan y 2006: Unanimous resolution adopted on Fair Trade y France y 2005: 40 proposals to sustain the dev. of FT, commission to recognize FTOs y 2006: adoption of reference doc on Fair Trade y Italy y 2006: discussion started in parliament to bring law on FT y Netherlands y 2007: Groningen and Douwe Egberts case

COMMON JUSTIFICATIONS
y Implicit and often explicit in fair trade is a criticism of the current y

y y y

organization of international trade as being unfair According to FLO International and WFTO: "Fair Trade is, fundamentally, a response to the failure of conventional trade to deliver sustainable livelihoods and development opportunities to people in the poorest countries of the world. Poverty and hardship limit peoples choices Market forces tend to further marginalise and exclude them Makes them vulnerable to exploitation y farmers and artisans in family-based production units y hired workers within larger businesses

Criticism
y It locks developing country producers into low-priced food commodity production, rather than helping them out of this low-margin sector. y Price distortion argument-fair trade attempts to set a price floor for a good that is in many cases above the market prices y Mainstreaming of Fairtrade-fully autonomous trading systems y Creation of insider/outsider market-certification process,production,pricing systems

Commodity crisis
y International intervention policies falling commodity prices has been estimated by the Food and Agricultural Organisation (FAO) total almost $250 billion during the 1980-2002 period. y Unregulated competition in global commodity markets y Developing countries commodities that do not compete with developedcountries: y Developing countries commodities that compete with developed countries

Fair trade coffee

y Fair trade coffee is coffee which is purchased directly from the

growers for a higher price than standard coffee

y Fair Trade certification began in the Netherlands in 1988( Max

Havelaar Foundation's labeling program in the Netherlands). third-party certifier of Fair Trade coffee for the U.S. market.

y True certified fair trade coffee is certified by TransFair USA, the only y According to the Tropical Commodity Coalition (2009), ethically

certified coffees accounted for 6 percent of worldwide coffee production in 2008

y Important Markets- US(2%) and European countries(1%)

Standards for Fair Trade Coffee Certification

y Fair labor conditions y Direct trade y Democratic and transparent organizations y Community development

Fair Trade tea

y Fair trade tea is produced on estates that have good standards for

their workers, such as fair pay, quality housing, healthcare, safe working conditions and children's education.
y TransFair audits the supply chain of U.S. importers to ensure that

the tea came from certified growers (which are predominantly larger-scale plantations, unlike the small growers and cooperatives in the Fair Trade Certified coffee and cocoa system).
y The premium paid on top of the market price flows back into a fund

managed jointly by tea estate managers and worker representatives, who then allocate money toward community development projects.
y Fairtrade Tea -UK and in Switzerland(5% market share ),

Germany(2% of market share)

Before you finish eating breakfast in the morning, you ve depended on more than half the world.
y

Martin Luther King