The last time we talked about the terms ‘Natural’ & ‘Organic’ and in our today’s topic we want to highlight the differences between ‘Fairtrade‘ & ‘Direct Trade‘.
Fairtrade has principles such as fair payment and ensuring good working conditions for farmers in the developing world.
The Fairtrade mark is a registered certification label, and products that display it, must meet Fairtrade Standards, set by Fairtrade International. This is not for free and costs (2% of the wholesale price) which is often very high for farmers’ co-operatives to become Fairtrade certified. The benefits allow co-operatives to attain higher prices and retain access to markets, but disadvantages do exist. For instance, the minimum price is only guaranteed to the co-operative, and not the small-scale farmer, or their workers at the end of the chain.
But Fairtrade has been shown to increase standards of living and reduce risks and vulnerability for farmers and workers and their families, enabling them to become stronger businesses.
While ‘Fairtrade’ promotes ‘protection’ of farmers, ‘direct trade’ offers ‘aspiration’. The fixed price a farmer receives from Fairtrade will not be affected by the quality produced, so farmers are not encouraged to take on the extra labour and input costs needed to grow a better crop. Quality-based direct trade, however, allows for indicated pricing agreements and participation in the field. A farmer that may be based in a region with outstanding climatic and topographical attributes for producing sesame seed, could, through a direct trading approach, become enabled to grow a greatly superior crop, and earn more money as a result.
Another benefit of working directly with farmers is the ability to spot the needs that arise within a community that would improve farming practices, and in the end, the quality of a crop.
Has Direct Trade their own label?
No, Direct trade is not eco-labelled. Many people opt to buy only ‘Fairtrade’ products. In doing so, they’re automatically rejecting other products not labelled as fair trade so, in their own mind, presuming it ‘unfairly traded.’ But arguably Direct trade products are much fairer all round:
- for the farmers, who are paid more;
- for the importers, who are developing rewarding, long-lasting relationships with the farmers;
- and for us, the consumers, who get a higher-quality product, for a similar price, and have the knowledge that workers have been paid fairly.
The main problem with Direct trade is that it’s a very new model and currently only vaguely defined and that you can’t see because there’s no label.
Do Fairtrade and Direct Trade really change anything or does it just make us, the consumers, feel good?
They are choices. Not always, but sometimes you pay a bit more for fairly or direct trade products, but then the farmers are also paid fairly. We had a chocolate shop before, selling organic and fairly traded chocolate, and we were therefore in contact with many cocoa farmers in South America and Africa. Those farmers had better housing, better facilities and could send their children to school, in contrast to the plantations next door. We think it’s better to help developing countries by putting the money in at the bottom, rather than at the top through governments.
What about Fair pay, that’s not only in developing countries is it?
No, it isn’t, the gender pay gap is also here in Europe. Two years ago, women in the EU earned on average 16% less per hour than men, and still, there are huge differences between the EU countries.Equal pay for equal work is one of the EU’s founding principles. EU countries must eliminate discrimination on grounds of sex with regard to all aspects and conditions of remuneration for the same work or for work of equal value, it’s part of doing ethical business.
So, to be sure about your favourite products, we suggest to check the packaging and the websites or contact the companies directly. Have another look in your cupboards and bathroom and see if your favourite products are fairly traded.
Please share your findings, thoughts or questions with us, by simply adding a note underneath, sending us a PM or join one of our online info events. Because sharing your experiences will help us all. We would love to hear from you.
Next time we talk about ‘Sustainability‘, so, stay tuned and until next time, Pimm + Marcel.