Brief Overview of the Fair Trade Policy: Helping the Workers Who Struggle the Most

Fair Trade is the organization that offers alternative products to already-existing conventional products and it was founded as a response to poor working conditions for the workers in third world countries. For the product to receive the Fair Trade certification, it must fulfill certain conditions imposed by OSN. In particular, it ensures that there is no violation of human rights, the products are also produced in the climate-neutral and sustainable manners and it provides minimum wages that ensure certain living standards for the workers.

Fair Trade is a fast-growing industry, whose revenues have almost doubled since 2010 and in 2017 it has amounted to 8,49 billion EUR, which represents 9% sales growth since 2015. The organization represents more than 1,6 million farmers and workers in 73 countries. Fair Trade is helping to fight gender inequality, child labor, workers´ rights, and climate change. The part of the price that is listed for the Fair Trade products is a social premium and producers decide in which projects it will be financed. The decision is made on a democratic basis and it is transparent. Fair Trade premium in 2016 amounted to 36,6 million EUR and it was used for scholarships for children or building new schools and roads or electricity lines etc.

The organization is monitoring the impact of the label on the lives of the people. Fair Trade collects panel data through the household surveys, and they found a significant result in decreased poverty at households whose main income comes from fair trade crop cultivation.

Certification and labels have become an important tool to make the consumers in the first world countries aware of the unfair working conditions of the workers in developing countries. Ethical products such as fair trade, cruelty-free, sweatshop or child labor free products are being more and more demanded. But there are generally two opinions concerning ethical labeling. On the one side, through various organizations, it benefits the workers around the world. On the other side, some claim, that it is just the effort of the big corporations to ease down the perception of their practices through the supply chain on the international level.

However, products, receiving certification must fulfill some requirements and the supply chain must be monitored. This is imposed from a third party, which is a government agency or a certifier and thus it should ensure a corporate responsibility through the whole supply chain process.