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The 10 Principles of Fair Trade Explained

The 10 Principles of Fair Trade Explained

Fair Trade has been around for decades, though wasn’t formally introduced in a widespread commercial sense until 1988. Even so, this means the programme has been recognised globally for almost 35 years, during which millions of Fair Trade products have found their way into almost every major supermarket. 

The range of products available has also expanded significantly over the years, covering everything from confectionary to countless eco-friendly homecare products. 

But what’s clear even today is how many (if not most) consumers are still unsure as to what exactly Fair Trade represents. Even among those who make the conscious effort to buy Fair Trade products, there’s still widespread confusion as to what Fair Trade really means.

What Is Fair Trade?

Briefly defined, Fair Trade is a global network of organisations that collectively seeks to provide farmers, producers and workers in developing countries with the opportunity to earn a fair wage. Along with supporting safe and amicable working conditions for those involved in the scheme, Fair Trade also supports the wider communities in the regions in which Fair Trade businesses operate.

What Is the Fair Trade Minimum Price?

One of the main objectives of the Fair Trade program is to ensure that the businesses involved in the initiative are paid a fair price for the products they produce. The Fair Trade Minimum Price therefore refers to the minimum acceptable price payable for goods and crops produced by farmers, irrespective of market conditions and demand. The price may increase in accordance with demand and wider market fluctuations, but can never decrease below the Fair Trade Minimum Price.

What Is the Fair Trade Premium?

This is the additional capital provided to workers or farmers to be invested in other projects and initiatives. Examples of which could include expanding or improving their businesses, investing in local infrastructure, contributing to local healthcare provision or supporting education within the community. The workers and farmers have the freedom to choose between themselves where and how the Fair Trade Premium is invested.

What Are the Fair Trade Standards?

All businesses operating as part of the Fair Trade initiative are expected to abide by certain rules, requirements and standards for the benefit of their workers and the communities in which they operate. Primarily, it is the responsibility of Fair Trade producers and growers to protect workers’ rights, provide an amicable working environment and take responsibility for employee health and safety. 

The 10 Principles of Fair Trade

Formalising its improvement and advancement of the businesses and communities involved in the programme, the Fair Trade Association has published its own ’10 Principles of Fair Trade’. While the potential benefits of the initiative go far beyond these 10 Principles alone, they nonetheless provide a good indication of what Fair Trade stands for and the importance of purchasing more Fair Trade products.

Here are the 10 Principles of Fair Trade, along with brief explanations for each:

Principle One: Creating Opportunities for Economically Disadvantaged Producers 

The Fair Trade Organisation is firmly committed to the reduction and elimination of poverty in developing regions and vulnerable communities, through responsible and proactive trade. Its primary objective is to provide small farms, family businesses and independent local initiatives with the support needed to generate a fair income for all participants and reach the point of economic self-sufficiency. The Fair Trade Organisation seeks to help businesses that would not be sustainable without its support and input.

Principle Two: Transparency and Accountability 

This refers to the commitment of the organisation to fairness and transparency, along with its accountability for all activities and initiatives undertaken. Though not a charity in a typical sense, Fair Trade operates in a similar way to a typical non-profit organisation. Everything takes place firmly out in the open and all Fair Trade employees, members and producers are actively encouraged to participate in important decision-making processes. Consistent communication lies at the heart of everything the Fair Trade initiative stands for.

Principle Three: Fair Trading Practices 

Within the Fair Trade program, fair trading practices means that under no circumstances does any businesses or entity within the organisation attempt to profit unfairly at the expense of others. One of the founding values of Fair Trade is the mutual benefit of all involved, ensuring that everyone benefits equally from the activities and support of the organisation. 

Principle Four: Payment of a Fair Price 

Fair pricing means that the price paid for every good and commodity is considered acceptable by all involved and has been mutually agreed by all participants in the trade. Numerous factors must be considered to determine what constitutes fair pricing in any specific region, as there may be significant local variances from one community to the next. However, the price paid must be enough to ensure adequate and equal pay for all workers, with no discrimination whatsoever between male and female workers, younger or older workers and so on.

Principle Five: Ensuring No Child Labour and Forced Labour 

It is completely unacceptable under the terms of the UN Convention on the Rights of the Child for child labour to be used in the farming or production of goods. Likewise, forced labour involving adults of any age is strictly prohibited under international law. The Fair Trade Organisation takes extreme precautions to ensure that no farmers, producers or businesses involved in the initiative use or advocate the use of child labour or forced labour under any circumstances.

Principle Six: Commitment to Non Discrimination, Gender Equality and Women’s Economic Empowerment and Freedom of Association 

Likewise, under no circumstances must anyone involved in the Fair Trade scheme discriminate or advocate the discrimination of certain groups with regard to hiring, payment, access to training or general workplace treatment.  This includes but is not limited to discrimination based on sexual orientation, gender, disability, religion, race, political affiliations, union membership, age and HIV/Aids status. The Fair Trade Organisation is particularly committed to gender equality and ensuring that women are provided with equal access to education and employment opportunities as men in all of the communities it supports.

Principle Seven: Ensuring Good Working Conditions 

All employers involved in the Fair Trade scheme are required to provide every member of the workforce with a safe and amicable working environment, which complies with all applicable local and national health and safety laws. This includes restrictions on working hours, the assurance of sanitary working conditions and fair treatment by managers and supervisors. The Fair Trade Organisation works closely with participants on a global basis to promote the importance of health and safety in the workplace and raise awareness of the value of good working conditions.

Principle Eight: Providing Capacity Building 

This refers to the Fair Trade Organisation’s commitment to supporting the ongoing development, expansion and evolution of the businesses it supports. The goal of the initiative is to provide local businesses and communities with the support they need to help and support themselves, through the growth and development of their Fair Trade businesses. This may include the provision of training and development opportunities for managers, or the support needed to provide better training and development programmes for members of the workforce.

Principle Nine: Promoting Fair Trade

The Fair Trade Organisation firmly believes that no business or authority is in a better position to promote the benefits of Fair Trade than itself and its participants. In turn, the organisation pledges its commitment to fair, honest, objective and transparent marketing and advertising, while actively encouraging its participants to promote the values of Fair Trade. 

Principle Ten: Respect for the Environment 

All businesses operating within the Fair Trade program are expected to make all reasonable efforts to ensure the sustainability and responsibility of their farming and production activities. For some, this means abstaining from the use of toxic pesticides and potentially harmful production methods entirely. For others, it means making the effort to gradually move away from production methods that may be harming the environment. At all times, Fair Trade businesses must make a conscious effort to minimise their environmental impact and encourage others to do the same. 

In Summary…

Fair Trade actively supports the basic principles most responsible consumers believe in. Few would argue with the importance of any of the principles outlined above, which continue to make a major difference in many of the world’s poorest developing communities.

But if this is the case, why such reluctance among many shoppers to switch to Fair Trade products?

For most, it comes down to the simple (though inaccurate) assumption that Fair Trade products always cost more. In reality, Fair Trade can actually cost less than products of a similar quality standard.  

The Fair Trade product landscape has changed beyond recognition over the years - as have the costs associated with Fair Trade goods. Hence, if shopping for Fair Trade products isn’t something you have considered in some time, you could be in for a pleasant surprise.


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