What Is Fair Trade?

According to the World Fair Trade Organisation’s official website (WFTO formerly known
as IFAT – International Fair Trade Association), Fair Trade is a trading partnership based
on dialogue, transparency and respect, which seeks greater equity in international trade.
Fair Trade contributes to sustainable development by offering better trading conditions to,
and securing the rights of, marginalised producers and workers – especially in the
southern hemisphere.

However, Fair Trade is more than just trading: it proves that greater justice in world trade
is possible. Fair Trade highlights the need for a change in the rules and practice of conventional trade and shows how a successful business can also put people first.

Fair Trade organisations have a clear commitment to Fair Trade and this is the principal core
of their mission. Backed by consumers, they are actively engaged in supporting producers, raising awareness and in campaigning for changes in the rules and practice of conventional international trade. For more information about Fair Trade and the Fair Trade movement, please visit the official WFTO website.

Fair Trade Principles

The WFTO prescribes 10 principles that Fair Trade organisations must follow in their
day-to-day work:

  • Creating opportunities for economically disadvantaged producers
    Fair Trade is a strategy for poverty alleviation and sustainable development.
    Its purpose is to create opportunities for producers who have been economically disadvantaged or marginalised by the conventional trading system.

  • Transparency and accountability
    Fair Trade involves transparent management and commercial relations to deal fairly
    and respectfully with trading partners.

  • Capacity building
    Fair Trade is a means to develop producers’ independence. Fair Trade relationships provide continuity, during which producers and their marketing organisations can improve their management skills and their access to new markets.

  • Promoting Fair Trade
    Fair Trade organisations raise awareness of Fair Trade and the possibility of greater justice in world trade. They provide their customers with information about the organisation, the products, and in what conditions they are made. They use honest advertising and marketing techniques and aim for the highest standards in product quality and packaging.

  • Payment of a fair price
    A fair price in the regional or local context is one that has been agreed through dialogue and participation. It covers not only the costs of production but enables production which is socially just and environmentally sound. It provides fair pay to the producers and takes into account the principle of equal pay for equal work by women and men. Fair traders ensure prompt payment to their partners and, whenever possible, help producers with access to pre-harvest or pre-production financing.

  • Gender equity
    Fair Trade means that women’s work is properly valued and rewarded.
    Women are always paid for their contribution to the production process
    and are empowered in their organisations.

  • Working conditions
    Fair Trade means a safe and healthy working environment for producers.
    The participation of children (if any) does not adversely affect their well-being,
    security, educational requirements and need for play, and conforms to the UN Convention on the Rights of the Child, as well as to the local law and norms.

  • Child labour
     Fair Trade organisations respect the UN Convention on the Rights of the Child, as well as local laws and social norms in order to ensure that the participation of children in production processes of fairly traded articles (if any) does not adversely affect their well-being, security, educational requirements and need for play. Organisations working directly with informally organised producers disclose the involvement of children in production.

  • The environment
    Fair Trade actively encourages better environmental practices and the application
    of responsible methods of production.

  • Trade Relations
    Fair Trade organisations trade with concern for the social, economic and environmental well-being of marginalised small producers and do not maximise profit at their expense. They maintain long-term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. An interest-free pre-payment of at least 50% is made if requested. 

Although By Hand is not yet recognised by the WFTO, we are fully committed to the principles of Fair Trade. We sincerely believe that business can be ethical and working under Fair Trade principles is a key step in making this happen. By Hand aims to achieve recognition by the WFTO in the future and pledges to work in line with the WFTO’s Fair Trade principles throughout all its undertakings. In promoting the principles of Fair Trade, By Hand also hopes to raise awareness among consumers and to demonstrate that Fair Trade can be applied to all products, not just coffee and chocolate.

Fair Trade should not just be a statement; it should be a way of life.