Fair Trade

Fair Trade is a loosely organised social movement that has its origins in the 1960s but first began to gain significant market share in the 1990s.

It starts from the recognition that in developing countries most farming and agriculture is carried on by independent subsistence farmers who have little time or ability to form organisational structures to represent them. Increasingly, from the 1960s to the 1990s, their buyers became bigger and bigger multinational companies against whom the small farmers have little bargaining power.

This creates difficulties. Firstly, the price that the farmer can command is pushed lower and lower making it impossible for them to generate any sustainable capital for investment. Secondly, agriculture, which should form a stable bedrock for any economy, becomes commodified with the risk that big buyers might switch their contracts from country to country leaving severe hardship and economic damage in their wake. Thirdly, the multinationals begin to promote the commodities that will maximise their profit, not the products that are necessarily the most productive for the land which the small farmers are working.

Fair Trade seeks to counteract these tendencies by building social enterprises that provide an alternative route to market for farmers. Prices are guaranteed allowing room for capital accumulation, helping the economy as a whole, and increasingly distributors and retailers have to sign contracts that prevent them from exploiting the goodwill of consumers by increasing their mark-up on such goods. Fair Trade sales in the UK increased by 22% last year.

As well as protecting small farmers income, the Fair Trade movement has widened in recent years to include objectives such as protecting traditional crafts, industries and skills - and by linking up with NGOs to provide sustainable education and health facilities in rural communities.