Fair Trade -Achievable in a lifetime?
Fair Trade Phil is a guest blogger and the views expressed herein are his own and do not necessarily represent the views of Shared Interest Society. If you would like to be a guest blogger, please contact us with your interest.
When we sit in the shade of a tall tree, we should be grateful to someone who planted the seeds of something they were unlikely to see reach maturity. The seeds of hope are planted with fair trade – will we see them sprout, grow tall and bear fruit? We do not know, but we plant them nonetheless, we tend them and hope they will grow fast and strong.
Fair Trade has been with us now for at least 30 years (Happy Birthday Traidcraft), and it is amazing to look at the work of the pioneers. The original concept and the development to where we are today is simply staggering.
In my view, you can always tell when something new is starting to succeed because that’s when people start to knock it. Given that big business will in general have a big budget for PR, I am somewhat cynical when I see media stories decrying Fair Trade or complaining it is not effective enough. To me, that suggests big business is worried about the competition and what Fair Trade may do to their margins and returns to shareholders! In reality, they should worry little at present, but they should pay more than lip service to trading ethically – it may just turn out to be the major consumer trend of the 21st century.
Why do I consider Fair Trade to be important? Well a good starting point is to consider the role that normal trade has played in concentrating wealth into the hands of a small minority while widening the gap between rich and poor. It gets ever more difficult for those exploited at the production end of the process to do anything to improve their lot. If Fair Trade is to make a significant difference, it needs not only to right this inequality, it needs to ensure that it does not just replace it with a dependency on a few ethical trading partners.
In the ideal world, Fair Trade represents a trading partnership, in which the partners mutually benefit not just from a business transaction, but from a symbiotic relationship, a desire of each to help their partner succeed. Here, the work done by Traidcraft can be held as an example to all. Their trading partnerships have a medium term goal of assisting the supplier develop their business so that they no longer need help. There are many aspects to these relationships, and it is inadequate to view Fair Trade as a term referring only to price or workers conditions. Our organisations have many business skills to pass on – product design, quality control, marketing, finance, to name but a few. In return, we receive products showcasing the very highest levels of skill in textiles, metalwork, woodwork and jewellery.
I’m sure by now we’ve all heard enough about the credit crunch. But for a vast majority of the developing world, the phrase credit crunch could refer to the last 30 and more years. Hundreds of thousands of businesses stagnate or fail because they do not have access to even tiny amounts of credit. One of the cornerstones of Fair Trade relationships is making a significant up front payment to the producer at the time of ordering – this allows the business to buy raw materials without needing to resort to borrowing.
To expand and prosper, however, it is almost certain that at some point a Fair Trade business will need to find a source of capital. For very small businesses, the “Micro-Finance” industry is virtually a door to door lending business in areas where there are no banks. It is by its very nature, a labour intensive and difficult business, and always short of capital to lend. Things can get even tougher for moderately successful businesses looking for development capital. Fortunately, there are organisations such as Shared Interest, who work hard, together with Fair Trade businesses, and this can bring great benefits not only to workers and business owners but to the wider community.
The question has been asked:- Can we claim to have Fair Trade while there remains an enormous discrepancy between the pay, conditions, and opportunities we would regard as acceptable or fair, as compared with those of the producers? Have we achieved Fair Trade anywhere? Well, firstly real progress has been made in public awareness in the last few years, not only awareness of Fair Trade, but awareness of the need for it. Secondly, real lives have been improved – and not just a few, but millions of them. It doesn’t really seem right to think of Fair Trade as a target or goal, because it will constantly change and react to economic and geographic influences. It is better to think of it as a journey, embarked upon by pioneers many years ago and carried on today by a new breed of ethical entrepreneurs (like Ethical Superstore and Mondomundi), dedicated to improving lives and making a real difference. If the overall goals of poverty reduction are to be met, then these new businesses must engage with the public, grow and succeed, but they must also never forget why they exist and why they are different.
Fair Trade Phil is an ethical entrepreneur who left an executive position in the finance industry to establish a fair trade business. You can read more of his blog postings at www.mundigroup.com/blog.
|
Click here to learn how you can invest in fair trade. Click here to donate to the Shared Interest Foundation |
|
If you enjoyed this post, please consider to leave a comment or subscribe to the feed and get future articles delivered to your feed reader.
Comments
Thank you for spreading the importance of Fair Trade and explaining the benefits. We’ve brought a certified Fair Trade line of sports balls to market in North America that are eco-certified. Stop by our blog at fairtradesports.com if you care to learn more, and thank you again for the post!
Thanks for a really interesting post.
To come back to one of your points: It is unrealistic to expect “fair” conditions to be the same in the countries where many of the fair trade products are produced as they are in say the UK, but that is not the point. Fair trade is about paying the producers a fair price, not exploiting them, about giving them long-term security, investing in their futures and about helping them achieve their goals through working together and listening to their needs, not simply dictating the trade. If anyone chooses to criticise fair trade for not being fully fair then I think they need to realise how far we have come. We are now in a place where many big companies are seeking to attain fair trade accreditation (see Cadbury as just one example). Unfortunately it is unlikely that they are doing this for ethical reasons, but the fact that they feel they have to do this to maintain/increase their profits shows just how far consumer opinion has come. For many it is no longer acceptable to allow companies to exploit workers on the other side of the world and this change in opinion is, in no small part, thanks to a lot of the work done by fair trade companies and other groups seeking to spread the fair trade word.
Fair trade is most definitely a journey – there is no quick fix – but it is a journey that seems to be gaining some steam and this can only be a good thing.
Well said Phil.
I think the connection between all parties in the relationship is vital and it is we as individuals, inspired by people like yourself and others, that can witness amazing change.