Fair trade

As Fair Trade ( Fair Trade English ) is a controlled trade referred to, in which the producers will be paid at least one fixed by Fair Trade Organisations minimum price of the traded products, which is set above the world market price. This will allow for the producers a higher and more reliable incomes than in conventional trade. The height of a fair price is a millennia -discussed topic of business ethics. These will also attempt to establish long-term " partnership " relationships between traders and producers. In production, in addition to international and prescribed by the organizations environmental and social standards are met.

The Fair Trade movement is mainly focused on goods that are exported from developing countries to developed countries. Fair trade includes agricultural products as well as products of traditional crafts and industry and is expanding rapidly into new areas such as tourism under the name of " fair travel " from. Offered are fairly traded products in health food stores and world as well as in supermarkets and in restaurants.

According to the umbrella organization Fairtrade Labelling Organizations International benefiting over 1.4 million farmers from fair trade.

• 3.1 Areas of Fair Trade
• 3.2 labeling and certification
• 3.3 Fair trade and political content
• 3.4 Fair Trade in the free economy
• 3.5 Studies on the impact of Fair Trade
• 3.6 Accounting policies on fair trade 3.6.1 European policy
• 3.6.2 World Bank

Principle

The informal working group FINE - consisting of the international umbrella organization of fair trade FLO, IFAT, News! and EFTA - agreed in 2001 to the following definition of Fair Trade:

Fair trade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. By better trading conditions to, and securing the rights of, marginalized producers and workers - especially in the countries of the South - does Fair Trade contribute to sustainable development. Fair Trade organizations ( which are supported by consumers) are actively engaged in supporting producers, raising awareness and fighting for changes in the rules and practicing the conventional international trade. The strategic intent of fair trade consists of the following points:

• Targeted work with manufacturers and workers who have been marginalized in order to move from a very weak position to security and self-sufficiency
• Strengthen producers and workers as partners within their own organizations
• To actively seek to play a greater role in the global arena to achieve greater equity in international trade.

Specifically, proponents of fair trade generally support the following principles:

• Creating opportunities for economically disadvantaged producers Fair Trade is a strategy to alleviate poverty and promote sustainable development. He aims to create opportunities for producers who have been economically disadvantaged or from the existing trading system marginalized.
• Payment of a fair price: The price is to be set in the dialog between trading partners and independent of fluctuations in world market prices always cover the production costs, secure the existence of the producers, enabling a socially just and environmentally sustainable production. In addition, is often paid a premium to the farmers or workers can implement collaborative projects to help long-term improvement of their situation. If necessary, pre-financing granted.
• Socially acceptable working conditions: The work environment must be safe and health- friendly. Exploitation, child and slave labor is prohibited. Trade union freedom must be given.
• Equality of women: women are getting paid appropriately for their contribution in the production process and strengthened within their respective organizations.
• Capacity building and know -how: Fair trade aims to make the producers of independent and enable them to compete effectively in the market.
• Transparency and accountability: Fair trade means transparent management and commercial relations to deal fairly and respectfully with trading partners.
• Environment: Ecological agriculture is not mandatory, but is encouraged. Certain particularly environmentally damaging pesticides are prohibited in cultivation.

Fair trade can be seen as a variant of trade in branded goods, with the added value of the brand is represented by the fact that with the added price paid by the consumer, should be helped economically weaker people. Unlike eg Wohlfahrtsmarken but this assistance should benefit not uninvolved third party, but the producers, so that the relation is maintained between performance and income.

History

The first Fair Trade organizations were founded by the North American Mennonite and Brethren in Christ in 1946, Ten Thousand Villages (formerly Self Help Crafts) and the project SERRV International, founded in 1949 by the Church of the Brethren. Both organizations arose in the church environment, and are still active today. Ten Thousand Villages is still in connection with the Mennonite Central Committee today. The products were initially almost exclusively craft, which ranged from made ​​of jute goods up to the so-called embroidery. However, these first activities were often part of charitable projects and have not had the world trade dimensions as today. The first Fair Trade shop was opened in the U.S. in 1958.

Social movements (1959 to 1980)

The European Fair Trade movement was formed in the 1960s. Fair Trade has been often considered to be the time as a sign against the neo-imperialism: radical students began to criticize international corporations that business models came out, which would severely impaired in the traditions. The global model of a free market economy was increasingly attacked during this time and developed ideals of fair trade, after which the price is directly linked to the actual cost and what all the manufacturers are entitled to fair and equal access to markets. The slogan this time of " Trade not aid " (engl.: " Trade not Aid " ), won 1968 recognition, as took him the United Nations Conference on Trade and Development (UNCTAD ), the emphasis on the on the establishment of fair trade relations with to put developing countries.

The Steun Foundation voor Onderontwikkelde Streken (SOS, dt " support for underdeveloped regions " ) in the Netherlands was founded in 1959 as the first so-called alternative trading organization. She was not profit-oriented, but imported craft of not very wealthy countries from the southern hemisphere. In 1967 this organization with the trade of products from the so-called Third World. In April 1969, the first fair trade shop was opened in the Dutch town of Breukelen, the products offered as a retailer that had been made ​​in these " underdeveloped regions". It was run by volunteers and was so successful that soon dozens of similar shops, opened Germany and other Western European countries in the Benelux countries. Worth mentioning, however, remains that the majority of the products that were sold at the time in the world shops, still came from the craft. 1973, the world's first fair-trade coffee was sold in the Netherlands. In the same year launched the sale of by SOS in Germany imported coffee - by the action 365 that sells this until today. 1980, these fair trade organization was S.O.S. in S.O.S. Wereldhandel renamed.

During the sixties and seventies important parts of this movement were working on finding markets for products from those countries, which had been for political reasons isolated from major world trading programs. So sold thousands of volunteers, for example, coffee from Angola and Nicaragua in world shops, churches, around the home and in booths in public places.

Crafts / Agricultural Products ( 1980 )

In the early eighties, the alternative trading organizations took a major challenge: The "New " to the fair trade products was more and more lost, the sales figures stagnated and crafts began at the market very old-fashioned and no longer to look modern. As the market for craft products further decreased, the supporters of fair trade were forced to rethink their business model and to find innovative solutions to the ongoing crisis in this industry.

Goods from agriculture made ​​it the perfect replacement for dwindling market for craft products: They offered a renewable source of income and were easy to sell, since each individual consumer was a potential customer. The first agricultural products that had been sold in the fair trade coffee and tea, which dried fruits, cocoa, sugar, fruit juices, rice, spices and nuts were quickly followed.

In 1983 there was a total of about 2,500 action groups in Fair Trade. In November 1985, there were about 350 world shops, 70 of which were organized at this time in the AG3WL. 1986 were located in Germany about 400 world shops and about 4,000 action groups. In 1988, the club Third World partners Ravensburg was founded, which today is Germany's third largest importer of fair trade products. In the same year was introduced by the Dutch organization Solidaridad, the Max Havelaar fair trade.

In 1989, the International Federation for Alternative Trade ( IFAT ) was founded as the World Association of alternative import organizations, about 100 fair trade organizations belonged to 1998, including Germany Third World partners Ravensburg, El Puente, GEPA and TEAM. In 1990, the European Fair Trade Association (EFTA ) was founded as an association of eleven alternative import organizations.

Rise of the Fair Trade label (first half of the 1990s )

The sales of Fair Trade, however, came only really turned heads when the first initiatives for fair trade label emerged. Fair trade had indeed get through ever-increasing sales uplift, but he was largely confined to smaller world shops that were scattered throughout Europe and to a lesser extent in North America. Many were of the opinion that these stores are far too disconnected from the rhythm and the lifestyle of contemporary developed societies and.

The only way to increase sales opportunities, was to offer fair trade products where the customers normally go, in larger chain stores. The problem that arose in this case was that the distribution of the goods should be made as to by the customer should trust fair trade products and their respective origins unconditionally. After it had come in the ensuing period of debate within the circles of fair trade, 1988, the first logo "Max Havelaar " (see above) was introduced by the Dutch organization Solidaridad. This independent certification made ​​it possible for the products outside world shops to sell and thus to enter the mainstream, creating a wider range could be addressed to customers and increased sales of fair trade then clear. The logos often differed from country to country. While " Max Havelaar " has been used in countries such as Belgium, Switzerland, Denmark and France, the products have been awarded the " TransFair " seal in other countries such as Germany, Austria and Italy, the UK and Ireland to put on the seal " Fairtrade Mark ".

On 12 June 1992, the organization TransFair International was founded as an institution of the European Fair Trade seal of the EFTA and TransFair Germany in Göttingen. In the early summer of 1993, UNICEF was 27 TransFair member. The Network of European World Shops ( NEWS!, German " Network of European World Shops ") was established at the European World Shops Congress in Utrecht. In autumn 1994, TransFair announced 33 member organizations, it was the first TransFair sealed tea on the market. In the year 1994 5.000 tonnes of green coffee were imported under TransFair conditions.

Second half of the 1990s

In early 1996, Chocolate ( cocoa and sugar) and cocoa products with the TransFair seal was introduced. Found on 11 May 1996, organized by the Network of European World Shops, the first European Fair Trade Day under the slogan Africa in European World Shops - breakfasts with Africa! instead.

In April 1997, several international organizations joined to seal the joint umbrella organization Fairtrade Labelling Organizations International (FLO ), headquartered in Bonn. In May 1997, TransFair had 37 member organizations. From 2 to 6 June 1997, the World Summit of fair trade coffee in Tutzing was conducted on Lake Starnberg. On 6 June 1997, the first edition, edited by Misereor and BDKJ, three-week information service world & trading appeared - information service for Fair Trade.

In summer 1997 sweets came with the TransFair seal on the market. On 5 July 1997, the Urgent Action of the Clean Clothes Campaign launched for claiming a social fund for Thai Näharbeiterinnen. She turned to the corporations, C & A, Karstadt, Metro, Neckermann, Otto and source. In October 1997, the GEPA and the Otto-Versand began a collaboration. Various Crafts GEPA were offered to give two sides of the Otto catalog Beautiful. From 6 to 12 October 1997, the action was more right than cheap - performed FAIR trade bananas. Around 130 world shops take the banana action days of BanaFair eV part.

On January 17, 1998, the Asia group of the Global March Against Child Labour went in Manila on the way to Geneva. On 25 February 1998, the Group launched America in Sao Paulo, and on March 21 the Africa Group in Cape Town. On May 9, the same year the third European Fair Trade Day was held under the motto made ​​in dignity - instead of in the garment industry production conditions. In Rome, the eighth European Weltladen conference was held in the same year.

On 8 May 1999, the fourth European Fair Trade Day was conducted. This was also the start of the three -year campaign land power satellite.

2001 to today

In 2002, 17 national labeling organizations agreed on a common logo, which will in future facilitate the international movement of goods and public relations. Furthermore, the European Commission announced that it would support fair trade. The World Bank also has a positive attitude towards fair trade. According to the commentary to a published her study in 2003 to fair trade coffee have advantages.

The year 2004 was declared by the United Nations to the rice year. In the Netherlands celebrated the 45th anniversary of the Fair Trade Organization in 2004. Organizations increasingly trying to integrate Fair Trade with the economically weaker partners in the WTO rules, but this is controversial. On March 23, 2004, a European conference on " Fair Trade - A contribution to sustainable development? " At the European Parliament in Brussels, the leading role of EURO COOP, NEWS! and EFTA was organized.

2005 was proclaimed by the United Nations as the International Year of Microcredit financial systems. In 2006 launched the NGO " Weed " an initiative on fair trade with computers. With the project " PC global" maladministration in the computer manufacturing to be uncovered.

Within the last ten years, fair trade boomed worldwide. FINE estimated that sales of fair trade products, both those with and those without seal Seal, earned about 260 million euros. 2005, the sum of 660 million euros has been estimated, which meant an increase of 154% and a steady increase of about 20 % per year. Similarly, the sale in America and the Pacific countries developed; there is increased sales of 291 million in 2003 to 376 million in 2004.

Important Fair trade importers are now BanaFair, dwp eG, El Puente and the GEPA. Fair -traded products are sold on a large scale among others, the Body Shop, Hess Natur and Living Crafts.

Since the year 2013, starting from the Fair Phone initiative Fairtrade aspects play a greater role in the IT and electronics production for the first time.

Practice

Areas of Fair Trade

Traditionally, fair trade deals with agricultural products that are exported from developing countries to developed countries. The certification system of the FLO today includes coffee, (ice ) tea, bananas and other fresh and dried fruit, juices, cocoa and chocolate, (cane ) sugar, honey, nuts, vegetable oil, rice, spices, cotton products and wine. Besides, are predominantly in world shops, offered products of traditional crafts Fair Trade. For hand -made rugs there own label as Rugmark, especially since the problem of child labor in this area by cases like Iqbal Masih is known. Also for cut flowers has existed since 1998, a seal of its own under the name Flower label, which is assigned by the non-profit association Flower Label Program.

More recently, fair trade is extended to industrial products such as clothing and soccer balls, and there are initiatives him to computers that oil or diamonds (see also: Blood Diamond ) want to expand. However, this is not without controversy within the fair trade movement. Even in tourism fair trade is increasingly the subject. Given declining milk prices in Europe there are few approaches that aim to ensure " fair prices " for European dairy farmers.

Labeling and certification

So-called label or labels make Fair Trade products for consumers recognizable as such. The largest organization that is responsible for the certification of products and producers and the independent verification of compliance with the criteria, is the international umbrella organization Fairtrade Labelling Organizations International ( FLO). In her numerous national fair trade organizations are members. The FLO- Fair-trade label is the internationally standardized fair trade label. National Labelling Initiatives are TransFair in Germany, Fairtrade Austria in Austria and Max Havelaar in Switzerland.

In addition to these major labels some less common there are labels that are restricted to certain companies / organizations on particular countries, regions or products. These include BanaFair eV for bananas, Rugmark for carpets from India or the Flower label, which is assigned by the Flower Label Program eV. The Flower Label Program works in the field of certification of flower farms in part related to TransFair. Farms that are certified under the Fairtrade standards may apply on the basis of this examination, the FLP membership. To avoid duplicate testing. In contrast to TransFair, however, the FLP does not control the entire chain of cut flowers, but only the socially and environmentally responsible production. FLP flowers are traded on the international cut flower market after the mechanism of supply and demand. Thus, there is also the opportunity for florists FLP flowers to obtain and make them available in their stores. In contrast, bouquets with the Fair Trade label are available in major supermarket chains.

In addition to the general criteria - respect for human rights and the ILO Conventions concerning freedom of association, prohibition of child labor and slavery in production, in turn, contribute a stipulated "fair" price that covers the cost of production and ensures the existence of the producers - are for the individual products set specific criteria, particularly in respect of the installation and the corresponding ecology. Organic farming is not compulsory for most labels, although some pesticides are prohibited.

Fair trade and political content

Parts of the Fair Trade movement connecting the actual trade with political content by consumers background information about the situation in the countries of origin of the products and about the world economy will be taught. So criticized the campaign for the processed in Tanzania Ujamaa Coffee in Switzerland in the 1970s, the " charity mentality " of development aid, and the promotions for jute bags from Bangladesh were also directed against a deemed ecologically harmful consumption and throw-away mentality.

Part of political movements in the countries of origin are systematically supported. The best known were the campaigns for the Nica Nica Coffee and bananas so-called, with their sale the Sandinistas were assisted in Nicaragua. Today, various initiatives for example, promote the sale of coffee Zapatista cooperatives in Chiapas (southern Mexico).

Fair Trade in the free economy

As long as Fair Trade is without coercive measures, subsidies or tax initiatives, fair trade is fully compatible with a free market economy. Fair trade is subject to the same duties, restrictions like any other trade in goods, especially imports from non-EU countries. However, it requires a willingness of customers to accept higher prices.

Just like any commercial enterprise, the Fair Trade companies must compete on the often highly competitive market. In Germany, the market share of fair trade coffee in approximately 2% (as of 2012) is located. Contrary to the trend of declining coffee consumption, fair trade, however, is able to claim. The sales figures slowly and steadily increasing. In addition to traditional providers such as GEPA, El Puente, dwp eG or claro fair trade, meanwhile, offer supermarkets and retail chains goods with labels for fair trade, in addition to their conventional offering.

The Bremer economist Hans -Heinrich Bass expects the market segment of fairly traded goods will continue to grow as accepted by the consumer quality seal to a self-reinforcing growth process would lead: If more vendors to participate in the growing market segment, will the quantity and diversity of range increase - it träten economies of scale and economies of scope (economies of scale and scope ) on. This in turn would be more buyers purchase goods from this segment - which in turn more providers call on the plan. The German Society for International Cooperation speaks even of them that now is a " sleeping giant " awoke.

Studies on the impact of Fair Trade

Two analyzes from the years 2008 and 2009 that have evaluated numerous studies on fair trade, come to the conclusion that the Fair Trade bar a significant contribution to development and most improve the lives of those involved in the production people and families. So many studies have shown that fair trade self-confidence, dignity and social capital of farmers to promote, but this is only elusive. Most studies suggest better economic circumstances, albeit not always clear in a sufficient to cover the basic needs level. Particular emphasis of economic stability and better access to credit. Fair Trade correlate significantly with improved health, greater food consumption and frequent school. He promotes stable, durable institutions, improve market access and lead to more diversified production. However, the degree of success depends often upon the circumstances. So bring fair trade with more developed countries barely economic but rather institutional advantages for producers. Hardly had explored the extent to which Fair Trade effecting environmental improvements. Least fair trade have contributed to the oft-expressed goal of improving the gender equity. Fair Trade alone can not solve complex problems of marginalized regions, but should be seen as part of a differentiated development strategy. The time available for such analyzes selection of studies is, however, still generally regarded as unsatisfactory or not addressed. Four studies will be carried out by way of example in more detail below.

2002 dealt Loraine Ronchi of the Poverty Research Unit at Sussex University on the impact of Fair Trade on the Coocafe - cooperative in Costa Rica. She found out that fair trade strengthened producer organizations and concluded that " it is possible to look back say to the coffee crisis of the early nineties, that Fair Trade has achieved its objectives to improve the income of small producers and as well as their quality of life positive impact on the welfare of the organizations that represent them at local, national and beyond this level. ".

In 2003, the Research Group for Fair Trade at Colorado State University Board held seven case studies with coffee producers in Latin America ( UCIRI, CEPCO, Majomut, Las Colinas & El Sincuyo La Selva, Tzotzilotic and La Voz ), who is committed to fair trade, and finally came to the conclusion that fair trade " have improved the well-being of the smaller coffee farmers and their families within a short time." In particular, these different case studies found that they had at Fair Trade achieved greater access to credit. Also described in the studies that these manufacturers have easier access to education compared to ordinary coffee producers. Similarly, families are more likely to be intact and children have better access to education than children from families that produce conventional coffee.

A 2005 by Nicolas Eberhart conducted for the French non-governmental organization Agronomes et Veterinarians Without Borders case study that deals with producers of fair trade coffee from Bolivia, came to the conclusion that the certification of fair trade has had a positive impact on the price of coffee in the region Yungas, hence it economically all coffee producers benefited, regardless of whether they had been awarded or not. Similarly, the Fair Trade should have strengthened the manufacturer organizations and increased their political influence.

In 2007, Sandra Imhof and Andrew Lee a study on the impact of Fair Trade in Bolivia conducted on behalf of SECO ( Swiss State Secretariat for Economic Affairs). The aim of the study was to evaluate the impact of fair trade on poverty reduction in the small coffee farmers ( both those who produce under Fairtrade conditions, such as those who produce under conventional conditions ) to examine how the conflict prevention. The authors came to the following conclusions: (1) Fair trade can reduce horizontal inequalities and thus could potentially have a positive effect on conflict prevention. ( 2) Fair Trade promotes "capacity building ", which leads to poverty reduction. ( 3) Fair Trade Creates competitive effects in the local market, poverty could be reduced in the conventional producers. (4 ) The effect on the mass market of fair trade could have reduced poverty indirectly. However, the authors emphasize that these four hypotheses need to be tested in other market and conflict situations continue to make more precise statements about the impact of fair trade can.

Fairtrade sat around with Nicaraguan farmers that they change their production to organic coffee, which resulted in a higher price but lower income of farmers due to higher costs and lower yields.

Attitude of the policy on Fair Trade

European policy

In June 2006, the Green MEP Frithjof Schmidt, the Development Committee, the report Fair Trade and development before.

The report highlights that the sales increases in fair trade were largely achieved labeled products with a seal of approval and has been that in most European countries developed initiatives for labeling. The report was followed by a resolution that urged the European Commission to make a recommendation for Fair Trade, and urging them to promote fair trade. The report also includes a set of minimum criteria that should be met by a product in order to be consistent with the fair trade.

" This resolution responds to the impressive growth of Fair Trade and demonstrates the growing interest of European customers to responsibly buy ," says Frithjof Schmidt. Peter Mandelson, EU Commissioner for External Trade, responded that this resolution would generally very well accepted by the Commission. " Fair Trade brings the customer to think and is therefore even more valuable. We need to develop a coherent framework for the policy and this resolution will help us. ".

The resolution was adopted on 6 July 2006.

World Bank

The World Bank has a positive attitude towards the fair trade. According to their study on sustainable coffee markets from 2003 can sustainably produced coffee bring such an improved use of natural resources with them ( both Fair Trade as well as ecological agriculture) " benefits; in producing less agricultural chemicals are required, which reduces costs and health risks. Moreover, the use of rural labor, which is more work there for those who desperately need a rises. "

Criticism

A criticism of the fair trade is often the lack of transparency of price composition of products of fair trade: For the consumer is often not understand exactly who gets what share of the added prices in the value chain. The price difference of fair trade products in comparison to conventionally traded is significantly higher than the additional amount that will receive the producers - the remaining part will partly skimmed from retailers, partly explained by the management and control costs of the organizations, which is, however, difficult to verify from the outside. Also the structure of the value chain from south to north is hardly touched. The label " Fair Trade " is above all an instrument of price discrimination, so the price did not reflect the marginal costs and the additional income for producers. Costa Coffee offered a cup of fair trade coffee for 10 pence more expensive as conventionally traded coffee. This would suggest the customer, the price difference would be of use to coffee farmers, however, amounts to the actual additional income only half a penny per cup. This is due above all to the low share of coffee beans at the cost of a cup of coffee. Nine and a half pence per cup went so maybe at Costa Coffee. After Costa Coffee was asked about it, the company began in late 2004 to offer fair trade coffee at no extra charge.

Another point of criticism is that the producers have to partly pay high prices to get the seal of approval, and the fragmentation of the market is promoted. This could ultimately lead to a decline in wages in the non- fair trade chain.

From an economic perspective it is criticized that the price is not completely controlled by pricing mechanisms, but is set by organizations partially. Since a fair price is not objectively ascertainable, the price determined is arbitrary. Furthermore, there is a danger of corruption and inefficiency, because the success of producers no longer depends on their productivity, but by membership in a fair trade- certified organization.

Especially in connection with the temporary, much caused by overproduction fall in coffee prices ( coffee crisis ) the criticism has been variously expressed that guaranteed by fair trade higher prices would encourage the farmers to increase their production volume and thus increase the problem of overproduction. Coffee farmers are especially so poor because too much coffee would be produced, which should not be further encouraged by fair trade prices.

Fair trade is an instrument according to Paul Collier of charity, the peasants put an incentive to continue their poverty promotional production. The movement reflecting an anti- modern idyll, as the farms have to be small and family-run and modern agricultural technologies such as mechanization, economies of scale, pesticides and genetic engineering are neglected and even actively avoided.

The concept of fair trade is criticized as such. For a " fair trade " ( "fair trade" ) is the term not protected by law. Secondly, it is "a certain potential to prejudice formation ( or affirmation ) ... can not be denied "; because this term implies any other trade is unfair, both in the external and internal trade. In this way, not only would all producers that are not fair trade certified, disadvantaged and damaged but also and above all, any dealer does not carry Fair Trade products, discriminated against. The ( agricultural) markets of the industrialized countries that are currently protected from competition by high tariff barriers should be some better open to all producers from developing countries view them instead of giving privileged access through tools such as fair trade, few producers. Also, there are those who view required by the fair trade environment and social standards as discrimination of developing countries in trade and as a disguised protectionism.

One of many proponents of fair trade - in particular by representatives of the "Alternative trade " - criticism stating that the fair trade run by the increasing focus on mass markets and the cooperation with large corporations risk to move away from its original goals and ideals. Within the Fair Trade movement, there are different views as to whether the trade fair aimed at the highest possible market share and revenues, or should be limited to a small but effective market niche. The international Clean Clothes Campaign about is not on individual products to be marked with labels, but would like to achieve compliance with fair working conditions across the apparel industry.