Fair Trade History

The History of Fair Trade

The origination of Fair Trade can be traced back to the time after World War II.  Back then, Western European charities started with first supporting measures. In 1959, the first alternative, nonprofit-oriented trading organization was established in the Netherlands and in 1969 the first world shop, run by volunteers, opened, also in the Netherlands (Breukelen). Afterwards, many world shops opened rapidly in other western European countries as well as Germany. The product range at that time however was limited to handicraft products. Only in 1973, the first fair traded coffee was sold.

The concrete idea of “Fair Trade” developed from the political conflicts in the ‘60s. At that time, fair trade had been more and more perceived as a symbol against Neoimperialism. Back then, students started to massively criticize the business strategies of international affiliated groups. The worldwide model of free market economy had been increasingly attacked. People demanded the price to be directly connected with the actual costs and all producers to have the same rights to access the market. Based on this, the ideals of the Fair Trade originated. At that time, people also started to connect trading with political content by providing background information about the situation in the producing countries to the consumer. People also started to create markets for products from countries that had been isolated from world trade programs for political reasons. This way, several thousand volunteers sold coffee from Angola and Nicaragua back then.

Out of the necessity to modernize and broaden the world shops and to expand the idea of fair trade to also include agriculture, in the 80s many agricultural products, such as coffee, tea, dried fruits, cocoa, rice, spices and so on, have been added to the already established product range.

With the establishment of the first initiatives for Fair-Trade-Seals, the Fair Trade experienced an upswing. The first Fair-Trade-Logo (“Max Havellar”) was introduced by the Dutch organization Solidaridad. Consumers increasingly asked for a guarantee to unconditionally be able to trust the origin of the fair traded products. The introductions of Fair-Trade-Seals helped to better position the world shops and hence make them more accessible to the mass-market and at the same time more interesting for the consumer. Ever since then, various logos were established in the different countries. By now, several international Seal-organizations have been organized under the umbrella of the Fair Trade Labeling Organization International (FLO). This organization defines the international standards for Fair Trade and consolidates the different labels. It furthermore controls the producers and retailers, grants them support and help and is responsible to the certification. 

Nowadays, Fair Trade developed to be a serious option for the conventional trade and is by far not restricted to crafts and agricultural products anymore. By now, it has been expanded to also include industrial products (especially in the textile industry) and tourism. Fair Trade can be found anywhere where producers are being economically put at disadvantage or excluded and isolated from important world trade programs for political reasons.
Principles of Fair Trade

The fundamental idea of Fair Trade is to pay a fair price for the products of disadvantaged producers, which normally is above the respective world market price. This way, producers are enabled to earn a higher income, which guarantees them to cover production costs, to secure their livelihood and to ensure a socially fair, healthy and environmentally friendly production.

With long-term contracts, the producers gain a certain guarantee and security for long-term investments and the creation of new jobs. Hence, Fair Trade creates opportunities for economically disadvantaged producers, helps them become more independent and encourages them to maintain and improve their position in the market.

In addition, Fair Trade is committed to ensuring that international environmental and social standards are being maintained, woman are treated equally and receive an appropriate pay for their work and child labor is excluded. In general, the activities of fair trade can be summarized as follows:

•    To create opportunities for economically disadvantaged producers
•    To pay a fair price, which is above the world market price, independent from its fluctuations, and paid in advance when necessary
•    To create socially acceptable working conditions (working conditions should comply with relevant healthy and safety regulations, prohibition of child labor and slavery, equal opportunities for women)
•    To establish capacity and know-how
•    Transparency and responsibility (transparent management, respectful contact with producers and continuous dialogue)
•    To protect the environment (to promote ecological agriculture and exclude pesticides that are harmful to the environment)

In general, Fair Trade is based on dialogue, transparence and respect. The criteria, on which the activities of Fair Trade are based on, are being defined by the “convention of the world shops”, in which these three principles are also included. In doing so, producer-organizations, importers and worldshop all work together.
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