Fair Trade – How It Works For Producers And Consumers

In the concept of fair trade, both the consumers and producers are benefited for it calls for a trading partnership that will not put the other party’s rights to an advantage in expense for the other. The producers of goods will cater high quality products to the consumers in exchange for a fair price. The said price will help them earn a just income and will replenish their production expenses.

The concept of fair trade can benefit the producers in many ways. The stability of price for their products gives them utmost advantage. This price it set to assure that producers can get back the investments they have for the production costs and at the same time be compensated from their hard labor. With the fair trade standard, whenever the market price falls, the price remains the same, while in the event the price rises, they will get the market price. The producers and buyers can also agree for a certain price above the fair trade price which will be determined by the quality of the products.

Fair trade is managed by a Fairtrade Labelling Organization (FLO) that manages price setting, sets up and applies fair-trade standards and provides support for the producers. The producers are involved in the decision making process concerning the trading and other decisions like overall trading strategy, the setting of Fair trade prices, premiums and standards.

Fair trade empowers farmers and workers. Producers form a group of their co-farmers producing the same product. For instance, coffee growers will have their own group and other plant growers will have theirs too. Such small groups of producers will be governed by a democratic body that in turn receives support from FLO. With the fair trade minimum price being set, there is a corresponding trade premium that will be utilized as whole group’s fund that they can use to improve their community. They can have it for some community projects that will help improve their farming facilities and other needs.

Fair trade also supports the farmers to have income stability to supply their family’s needs and plan for a better future. It enables the farmer and his family to continue tilling the land to provide foods and support for the improvement of economic condition of their community. It will also encourage farming and production practices that are environment friendly. Farmers are bound to the duty of protecting the environment for this is where they depend for sustainable good harvests.

Fair trade also makes consumers winner in this kind of idea for they can shop quality products according to their preferences and the opportunity to choose from diverse products. Since the consumers are buyers of the products, they also have manifest support for the producers who are struggling to improve their living conditions.

Currently, the fair trading covers more or less 58 developing countries from Asia, Africa, America and Caribbean. These products from such countries are sold to 70 countries worldwide. These products are certified and carry the fair trade mark which exist for products ranging from tea, coffee, fruits, nuts, grains to mention a few.

The World Wide Web is also hosting the fair trade business activities. Websites are established to gather a large pool of sellers and buyers in just one venue. Producers and suppliers can market their quality products with an increased visibility for their target consumers. On the buyers end, they will have the avenue of buying superior quality products after making comparisons out of plenty of options that will surely cater a best buy.

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