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Tea 201 - Fair Trade - The Effects of Sustainable Investment in People

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Fair Trade

Fair. Trade.  You see these words thrown around in tea shops and coffee shops.  But what does it mean?  Why is it such a big deal?  Well, never fear my dear readers.  I am here to tell you!

To put it simply, fair trade is the economic model that literally cuts out the middle man between the growers and the shops that sell the products.  This allows for the farmers to be given a chance and the capacity to compete in the global market.

It was created in 1988 when the fall of coffee prices created a panic for developing countries that were supplying the beans.  This directly impacted the small farmers.

When you see the words Fair Trade on a product, you may also notice that the price is sometimes higher than a typical store brand.  That’s because there is also a “social premium.”  What you’re paying for is not just for the product itself.  You are also paying for funds that go directly into the communities of the workers through educational, social and cultural development.

There are six keys principles of Fair Trade according to a well known company who deals in Fair Trade called Rishi:

A Fair Price: Fair-Trade-certifying organizations establish a fair price, guaranteeing farmers and workers a living wage as well as an additional sum of money or “premium” for investment in social, environmental or economic development.

Fair Labor Conditions: Fair Trade workers and farmers are guaranteed safe working conditions and fair living wages. Forced child labor is strictly prohibited.

Direct Trade: Fair trade products are purchased directly from Fair Trade producers, eliminating unnecessary middlemen and allowing farmers to strengthen their organizations and become competitive players in the global economy.

Democratic and transparent organizations: Fair Trade producers within the farm or organization democratically decide how to use their Fair Trade premiums.

Community development: Fair Trade producers invest their Fair Trade premiums into projects that benefit the community and environment including but not limited to the following: improved healthcare, education, business, and farming improvements.

Environmental sustainability: The Fair Trade system strictly prohibits the use of genetically modified organisms (GMOs), promotes the improvement of soil fertility through practices such as crop rotation and limits the use of harmful chemicals in favor of farming methods that protect and preserve the health of the soil, air, water, workers and consumers.

What a wonderful business model, don’t you think? All in all everyone wins! Do you invest in Fair Trade products?