Why Invest in Fair Trade?

Lisa Zaslow is a guest blogger and the views expressed herein are her own and do not necessarily represent the views of Shared Interest Society.

Lisa is a passionate fair trade and microfinance activist currently living in North Carolina, USA. She is the founder of Blue People Fair Trade Ltd., an online store that specializes in fair trade and environmentally friendly accessories from all over the world. If you would like to be a guest blogger, please contact us with your interest.

Fair trade is a model for sustainable economy in rural communities in the developing world with over 7 million people in 62 countries across the world depending on fair trade for their livelihood, either directly through their work or indirectly through the community projects that the Fairtrade Premium provides. Small grassroots businesses, such as banana farmers and handicraft co-operatives, make up the fair trade movement. Promoting livelihoods and empowering these groups is where sustainable development and poverty alleviation begin.

As successful as the fair trade movement has been at helping to eradicate poverty in the developing world, the current worldwide credit crunch is threatening the viability of the movement going forward.

All businesses rely on credit to grow, or even survive, whether it is a line of credit to overcome temporary shortfalls in cash flow or long term loans to purchase equipment. Most businesses in the developing world don’t have access to traditional finance. Considered too risky and small for mainstream banks and too large for microfinance, these grassroots businesses cannot access the capital they need to grow and sustain their businesses. In our global economy, credit is often exorbitantly expensive for self-help groups. And it sometimes comes with “strings” that can lead to outside control of developing economies.

Small farmers who belong to the fair trade movement, which advocates fair prices and sustainable agriculture, say they get some protection from wild market fluctuations that are happening in the economic crisis. But many fair trade organizations are reporting that producers are having difficulties raising finance and loans locally in the developing world. As banks run out of money (or refuse to lend money), fair trade groups are starting to struggle to meet demand for working capital.

The Fair Trade movement needs individuals, companies and organizations to invest in fair trade so that the movement can grow to include many more small farmers and artisans. People are willing to pay a premium to help the planet and to help people in the developing world, but without access to credit/finance, small farmers and artisans, and the rural communities that they live in, will not be able to capitalize on their specialty products. Invest now and don’t forget to buy fair trade!

Click here to find out how you can invest in fair trade.