You may have noticed a "fair trade" label on a product you bought recently. More and more companies are joining the fair trade movement and showing it on their packaging. But what exactly is fair trade?
Fair trade is a social movement designed to create better trading conditions for farmers, artists, and other producers in developing countries. Fair trade businesses also promote sustainable farming and production methods. They see trade between developing and developed nations as a way to help solve problems like poverty. To do this, they follow different, more compassionate principles than most other businesses.
Fair trade businesses pay more than current market prices for goods. They believe the low prices most buyers pay are unfair to sellers. Higher prices allow the producers selling goods to earn more, invest more, and expand their businesses if they want to. In addition, fair trade companies try to avoid working with middlemen. They connect sellers directly with their buyers. This means that sellers don't have to pay a third person to help them reach a market. Many fair trade businesses also use and promote environmentally friendly practices. They may provide credit to sellers who want to grow their businesses. And of course, fair trade means that no slave or child labor can be used at any point.
Of course, fair trade has a few problems of its own. Research shows the poorest fair trade sellers aren't earning any more money now than they did before. It's also hard to make sure that fair trade practices are actually being followed, and sometimes people cheat. So is fair trade really fair? For now, it seems, the consumer doesn't have a final answer.