What Is Fair Trade, and Why Is It Important? Here’s a Deep-Dive on Its Global Impact

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The Global Impact of Fair Trade with Paul Rice

Not too long ago, you could only find fair trade certifications on coffee and tea. Now, the label graces food, beverages, and even clothing brands. This means more products than ever are being produced under strict social, environmental, and economic standards.

To learn more about fair trade and how it intersects with global events, Liza Moiseeva, Brightly’s CMO and co-founder, sat down with Paul Rice, the president, CEO, and founder of Fair Trade USA. (The organization behind the Fair Trade Certified seal.) In the latest episode of Good Together, they take a deep-dive into the current state of fair trade organizations and artisans.

Continue reading to learn more about the global impact of fair trade, how it has been affected by COVID-19, and—of course—how we as consumers can help support these workers and organizations.

What Is Fair Trade?

what is fair trade?

According to Rice, fair trade is more than just a certification label to look for in the store. “Fair trade is both a philosophy and a movement,” he says. “A movement for social justice, better livelihoods, and sustainability.”

It’s a movement and certification body that gives farmers and factory owners a framework in which to define responsible practices. Those farmers and factory owners are then audited against those standards.

“We have a 200-point checklist of social, environmental, and labor criteria,” says Rice. “We audit and certify farms and factories every year against those standards. So when you see that Fair Trade Certified seal on a bag of coffee or a bunch of bananas, or maybe a fleece at Patagonia, you know those producers got a better price. They produce sustainably, they took care of their workers, and they took care of the environment. All of that is being supported through your purchase as a consumer.”

One clarification Rice makes sure to point out is that fair trade doesn’t indicate the certification of a company.

“We’re not certifying Target or Walmart or Patagonia; we’re not certifying the company as an entity itself,” he says. “What we’re certifying is the terms of trade with the farmers and workers that they’re buying from. So that fair trade label is your reassurance as a consumer that the farmer didn’t get screwed—that the worker and the farmer were taken care of, and they got a better deal.”

How Has COVID-19 Impacted Fair Trade Workers?

what is fair trade?

At the onset of the global pandemic, a number of farmers and factory workers were left unpaid due to canceled orders from companies scrambling to cut expenses. But how were fair trade artisans affected by this worldwide shutdown? According to Rice, these factories were surprisingly prepared.

“A whole section of our standard is around the requirement of factory owners and farm owners to provide personal protective equipment to their workers, and then to train them in why to use it,” said Rice. “And so, fair trade became even more relevant than ever during COVID because we already had protocols in place for training workers and farmers in things like PPE.”

This preparation proved to be invaluable for workers and their health.

“I’m really proud to report that in the factories we certify, and in the farms we certify around the world—we’re now working with a little bit over one million farmers and workers in 46 countries—the incidence of COVID among our communities is very, very low,” Rice says. “I attribute this at least in part to the fact that fair trade is already getting those farmers and those workers involved in health training and safety programs, and helping them get access to personal protective equipment and the training they need to use it appropriately.”

How Can I Support Fair Trade Workers?

The main way to support these workers as a consumer is to look for and purchase fair trade products. And if you’re concerned about cost, Rice says the premium you’ll pay as a consumer is very minimal.

“The reality is that the premium that the brands pay—whether it’s Patagonia or Target or anyone else—is only around two percent of the of the export price. So it’s a very small markup for the brand,” says Rice. “But what that translates into is hundreds of thousands of dollars each year going back to every factory, and for the workers to manage and to invest in various community projects like health, education, clean water, daycare, and so on.”

Rice goes on to explain that, as consumers, we really don’t see a huge difference in price because it’s such a small percentage of the total cost. He cites $29 fair trade blue jeans from Target as an example. “It’s possible for a company like Target to source blue jeans from a very efficient and productive factory overseas, and pay that fair trade premium and still deliver that product at an affordable price to U.S. consumers,” says Rice.

Another piece of advice that Rice offers is to slow down when making purchases.

“Reflect for just a second on the families who put their hearts and souls into growing the food that keeps us alive,” Rice says. “And then think empathetically about it. Does that family make enough money to live a decent living and to keep their kids in school and to have hope for their future? That act of intentionality and of empathy is the beginning of change.”

Rice believes that once you begin thinking about your purchases in a more intentional way, you’ll not only begin looking for these products, but for organic, non-GMO, and other indicators of sustainability as well. “That [thinking] will lead us on a path where our everyday purchasing decisions can have such a tremendous impact.”


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