Fair Trade: What’s Behind the Trend?

It’s a phrase that’s bandied about a lot and it’s quickly picking up steam – but what exactly is “fair trade”? You’ve probably seen these words printed on any number of products, from wine to coffee.

Most prominently though, you’ve probably seen it on chocolate. Chocolate suppliers are jumping on the fair trade trend, and using the label to denote many of the products they market. So, let’s take a closer look.

One Phrase, Two Meanings

Fair trade in the international sense is a treaty between nations laying out the rules of the game for trading relations between them. But that’s not what we’re talking about here. Rather, we are referring to a social system or movement that has at its foundation a desire to help producers in developing countries achieve better trading conditions whilst also encouraging sustainable production and social change. This is a voluntary movement but one which carries growing weight as the public develops an increasing awareness of environmental issues as well as a desire to mitigate poverty and abolish exploitation in developing countries.

How Does It Work?

Because one of the movement’s central goals revolves around helping developing countries, it particularly affects commodities such as coffee, fruits, grains and cocoa.

In the old way of doing things, producers of raw materials, such as cacao beans, were at the mercy of their buyers and were often paid a price for their product that hardly even covered production costs. The price certainly didn’t allow for the implementation of more advanced production techniques, decent wages for employees, or for the unforeseen ravages of mother nature.

Fair trade organisations encourage buyers of the basic commodity, in our case cocoa, to pay a price that will allow the grower to make a reasonable profit, pay fair wages and adopt sustainable farming techniques. It also helps discourage practices such as child labour, gender discrimination and encourages workers’ rights.

Companies that adopt fair trade practices pay more for their raw materials. This may seem like a disadvantage, but, apart from knowing that companies are behaving in a decent manner towards their suppliers, it also gives them the right to display internationally accepted “Fair Trade” logos on their products. This is a great asset that helps chocolate suppliers market the product and helps the ultimate buyer to justify paying a higher price.

Fair Trade Certification

Altogether, there are some 19 national, internationally accepted Fair Trade certification organizations. All are governed by an international umbrella organization, Fairtrade International. Together, they set the standards and requirements that allow the supplier to market chocolate as “Fair Trade”.

Are All Fair Trade Companies the Same?

Even though the fair trade concept is pretty universal, different companies adopt different approaches when it comes to implementation. Some chocolate suppliers simply pay higher rates for their raw materials. Others, like UK manufacturers Divine, have set themselves up as a cooperative in which their cocoa producers hold a 44% interest in the company. This gives them not only a fair price and a share in profits, but also allows them to influence company decisions and policies.

So, fair trade is a system that is trying to make it possible for people in developing nations to achieve a better standard of living whilst, at the same time, encouraging social change and a better world for all – not to mention some truly excellent chocolate making. All in all, a win-win situation for everybody.