Fair trade brings products from poorer regions into more developed economies. A minimum price is agreed on in advance to make sure that producers will be able to earn a living wage. This protects producers from market fluctuations that can cause prices to drop below production costs. This is a common problem in the conventional marketplace, and the struggle of shrimp farmers in Thailand and Mexico is just one example of how market fluctuations can impact producers.
Most fair trade groups also use and promote long-term contracts which are meant to provide stability for producers. Some associations like Fairtrade International also charge a premium on top of the minimum set price which is given back to the producers and invested in their communities, for example in healthcare or education.
Working conditions are audited by a certifying body to ensure that safety and health standards are being met. Child and slave labour are strictly banned. Workers under fair trade have a protected right to organise and unionise.
Protect the environment
The fair trade movement emphasises the importance of protecting the environment. Without fair trade agreements, foreign companies can and do invest in farming and production in developing countries with little regard for environmental sustainability. One long-term and high profile example of the damage that can be done is Chevron’s destruction of large swathes of the Amazon rainforest in the process of drilling for oil. Sometimes it is local industries that cause environmental damage out of desperation to cut costs and keep afloat in an increasingly competitive market. Because of this reality, fair trade initiatives have stressed the importance of enforcing sustainable practices. These practices include water conservation, restricting various chemicals, prohibiting genetically modified organisms, encouraging biodiversity, and ensuring waste is responsibly disposed of.