Photo courtesy of Adam Baker via Flickr.

The Fair Trade Industry: A Billion-Dollar Marketing Strategy?

A guide to the fair trade industry.

Fair trade labels can be seen on many different products around the world, promising to help farmers in developing countries.

The fair trade industry is huge – selling products for more than $6,4 billion in 2011, according to the organization Fairtrade International. More than 1.2 million farmers across 66 countries are involved, and the products are sold in over 120 countries.

What fair trade means for farmers

The system works by having farmers and product retailers pay a fee for the right to use the Fairtrade label.

It also imposes strict standards on the farmers, requiring them to not use, among other things, child labor, pesticides, herbicides, and genetically modified products.

In return, retailers can charge a premium for the products, which is spent on development projects such as schools and health clinic in the producing communities.

There is also a minimum price for fair trade goods that make sure the product is paid for even when market prices are down.

Although many companies operate fairtrade operations, the certification has to be granted by Fairtrade International, a non-profit association of member organizations, traders and experts.

The products produced and sold by the fair trade industry include bananas, honey, oranges, cocoa, coffee, shortbread, cotton, dried and fresh fruits and vegetables, juices, nuts and oil seeds, quinoa, rice, spices, sugar, tea and wine.

How to know if a product is fair trade:

The Fair Trade Certified Mark

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Used only in the U.S. and Canada, this mark is nevertheless certified by FLO-Cert, the certification arm of Fairtrade International.

The International Fairtrade Certification Mark

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Image courtesy of Fairtrade International.

Used in the rest of the world since 2002, this mark is slowly being introduced to North America.

Criticism of the fair trade industry

The label doesn’t always mean a product is 100% fair trade, however, as pundits have pointed out.

For instance, manufacturers of chocolate bars can mix fair trade beans with regular beans they buy a certain percentage of fair trade goods, they can label that high a percentage of their products as fair trade.

The fair trade industry has also been criticized of not successfully tackling poverty and favoring small landowners over migrant laborers.

This article was originally published Sept. 19, 2013. Curiousmatic regularly updates content with up-to-date information.

Do you shop fair trade? Do you think it’s an effective way of improving conditions in developing countries? Tweet us @curiousmatic.

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