Fairtrade – Promoting Sustainable Development

Closely linked to the principles of ethical consumerism, green brands and sustainable development, are the principles of Fairtrade. All of which may have some impact on eco-conscious investors who have taken the decision to pursue strategic sustainable investing, supporting stock market listed companies with strong corporate social responsibility programs. Recognizing that very often farmers and their workers at the beginning of the production chain, mainly in developing countries, are not always paid as they should be, Fairtrade’s goal is to offer support to these often marginalized groups as they move towards economic self-sufficiency, sustainability and stability.

In their own words, and as the name suggests Fairtrade sets standards that are “designed to address the imbalance of power in trading relationships, unstable markets and the injustices of conventional trade”. Fairtrade has two separate sets of standards to benefit two distinctly different sets of circumstances, which are commonly found in the regions they assist. The one deals with workers who are receiving decent wages from their employers, have the right to join a trade union if they wish, and have working conditions ensuring their health and safety. The other applies to smallholders who join up with producers in similar circumstances, to form a co-operative or similar democratic organization.

Fairtrade producers are protected by minimum pricing which ensures that, even in tough times, they receive sufficient funds to sustain their production, rather than to be at the mercy of the market. Should market price be higher than the minimum, buyers are obliged to pay the higher price. Minimums are set through negotiation, taking into account product quality and other factors. In addition to adequately covering production costs, Fairtrade producers are paid a Premium, being an additional sum of money to be used for things such as education and healthcare, as well as for projects such as improving the product they are marketing through measures such as increasing the yield and quality of a crop, or setting up product processing facilities.

The list of products carrying the Fairtrade Mark continue to increase, with thousands currently being available on store shelves. These include tea, coffee, fruit and nuts, as well as non-food items such as cotton, plants and flowers. As consumers we can do our bit by buying products with the Fairtrade Mark, knowing that by doing so we are making a difference in someone’s life.