Fairtrade labelling

From ArticleWorld

Fairtrade labelling started as a movement in 1988 for consumers in the Netherlands to identify fairly grown coffee from Mexico. Since then the overarching brand, which started out as Max Havelaar, has gained considerable international acceptance, and spawned a host of other similar industry-specific labelling practices. With so much agricultural and other production moved out of the western world to cheaper economies in Asia, South America, the Pacific Rim, and Africa, there are concerns about whether fair practices and standards are in place to protect the labor force, societies, and environment of producer countries. The often higher prices of fair trade goods is justified by pointing to the social capital that such businesses create in local, often indigenous communities.

Is fairtrade expensive?

The higher price of fair trade or Fairtrade branded products is due to two main reasons. The first involves compliance. If business owners, cooperatives and traders establish a stable, long-term price for the product, this is often above market standards to ensure sustainability even through poor seasons. In addition, many Fairtrade businesses pay cash into community development initiatives such as health care posts and schools to generate social capital. The cost of production due to this increases more for non-agricultural goods such as carpets. But the other reason contributes more to the higher retail price of such products in supermarkets in western Europe, North America and Australia, namely, that consumers are willing to pay a lot more for non-exploitative products;it has greater value than the same goods without it. In Switzerland and the Netherlands, which have the highest rate of consumption of ethically produced goods, everything from fruit to chocolate, tea to underwear, carpets to sugar could be Fairtrade.

Fairtrade audits

Fairtrade certification is underpinned by a philosophy of social justice, and in practice this translates into stringent country-specific auditing systems to assess labor policies, stable pricing systems, and the environmental impact of, say farmers and cooperatives that grow and market cacao, or cottage industries that weave carpets. The Fairtrade Labelling Organizations International is slowly becoming an umbrella organization uniting fair trade Labelling groups in close to two dozen countries. Other product-specific fair trade-type labels include Rugmark (child labor-free carpets) and Made-By (non-sweatshop clothing). Producers whose manufacturing process is approved by the auditors pay a small fee to use the label. The fee supports the non-profit activities of organizations such as FLOI.

Pros and cons

Cynics say that developed country consumers are merely massaging an enormous, basically unhealable wound to assuage their guilt, but supporters of fair trade practices point to scandals such as those surrounding Nike manufacturing facilities in Indonesia to prove their point. Fair trade practices and Fairtrade labelling will likely grow steadily as many consumers in the manufacturing countries too are willing to absorb the cost of the 'social premium' in non-exploitative goods.