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What is the difference between Fairtrade and direct trade?

Fairtrade is a global system that adheres to rigorous, internationally agreed standards to ensure that the most vulnerable farmers and workers are empowered to improve their own lives. By choosing products that bear the FAIRTRADE Mark, you have an independent verification that the claims made by the company selling that product are grounded in concrete evidence.       Direct trade mainly is used in reference to coffee and implies a direct relationship between the farmer and the company (usually a coffee roaster). Direct trade and its principles of getting to know and appreciate farmers more is something that we applaud. However, there is no way to verify if a company/roaster’s claims of fair prices and good treatment are correct other than their own word.       Furthermore, although some roasters may deal directly with farmers they still rely on intermediaries like exporters and importers. Therefore, there are still multiple links in their supply chain.

What is fair trade?

The difference between “Fairtrade” and “fair trade” is that “Fairtrade” refers only to Fairtrade organizations (such as Fairtrade America) or products certified through the Fairtrade International system. Conversely, “fair trade” can refer to many different things – the fair trade movement, fair trade products generally, products that claim to be fairly traded but do not carry the FAIRTRADE Mark.

What is a Fairtrade Certified Producer Group?

A Fairtrade Certified Producer Group can be either a farmers’ cooperative or a company which relies on hired labor, with production of a commodity covered by the Fairtrade Standards. The producer group is certified, meeting the international Fairtrade Standards, and added to the register of Fairtrade products in order to sell their product on Fairtrade terms to companies like traders or manufacturers who are registered to buy Fairtrade products.       Some Fairtrade producer groups sell all of their production on Fairtrade terms, though others may only sell some of what they produce under Fairtrade and need more companies to make commitments in order to increase the sustainability. Through increasing the volume of product sold under Fairtrade, these groups can secure a reliable and fair income in order to improve their lives.

What are the Fairtrade Standards?

The Fairtrade Standards are internationally set and agreed to standards covering minimum social, economic and environmental requirements that must be met by producers to become and maintain Fairtrade certification. The Standards also cover ongoing development requirements to encourage the growth and improvement of farmer organizations and workers conditions and rights. Read more about the standards here.

What is the Fairtrade Minimum Price?

The Fairtrade Minimum Price is the price floor set by Fairtrade International for a commodity covered under the Fairtrade Standards. It is the lowest possible price a buyer can pay a producer for a Fairtrade product to allow the producer to remain sustainable. When the market price is higher, a trader must pay the market price. The Minimum Price is set through consultations with Fairtrade farmers, workers, and traders, and represents a sustainable price, aimed to cover the costs of production.

What is a fair trade town/school/university/congregation?

Local communities, congregations, schools and universities can rally together to make a commitment to fair trade. To find out more and engage your group to empower producers in developing countries, visit Fairtrade Campaigns.

What is the Fairtrade Premium?

The Fairtrade Premium is an additional fund paid to producers on top of the Fairtrade Minimum Price, to be invested in social, environmental and/or economic development projects for their communities and businesses. Funds are allocated to and invested in projects democratically elected by producer groups. Read more about how the Fairtrade Premium is used.

On Working Conditions and Wages

“Harvest of Misery” claims to have found living conditions for the workers including parents and children which were “were unexpectedly grim”, with inadequate food, substandard housing and primitive sanitation on coffee farms in Chiapas. The documentary reports that adults earn as little as $4.50 per day. Fairtrade does not certify coffee plantations or estates, which rely primarily on hired labor, partly because coffee plantations are often historically dependent on a migrant and/or temporary labor force, especially during the harvest season. This makes for a highly challenging context to ensure that standards are being met and workers receive the full benefits of Fairtrade, as opposed to tea, flower and banana plantations that are year-round operations with a more stable workforce, which we do certify. However, we share the concern about low pay and poor working conditions on coffee farms both large and small, and winning progress towards living income and living wages is a cornerstone of our global strategy. To achieve this, we call on all actors in the coffee supply chain – including certification and verification systems, coffee traders, brands and retailers – to ensure that enough value is distributed to the farm level in their supply chain to ensure family farmers and plantation workers are able to earn a decent income and improve their living conditions.

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