What is Fair Trade? and why should we shop Fair Trade?

By Emelie Pelenkahu

What is Fair Trade? and why should we shop Fair Trade?

Fair Trade Blog Everina

Right around April in 2014, we attended a trade show in Seattle, Washington and came across this big white booth with photos of farmers cultivating coffee – it was Fair Trade USA booth. Right then, we discovered this new world for us: Fair Trade. We began to understand a little bit deeper of the mission and initiatives that Fair Trade organizations like Fair Trade USA do to carry the mission. It was and it still is a movement in America and across the world. But,

What is Fair Trade? 

Consumers have heard this term a lot but many don't fully understand the true meaning of this movement, what does it mean when a product or a brand is "Fair Trade." Well, Fair Trade according to Fair Trade USA, is a global movement made up of a diverse network of producers, companies, shoppers, advocates, and organizations putting people and planet first.

Fair Trade USA believe that everyone wants to do what’s right – for their families, fellow global citizens, and the planet. That’s why we’re committed to making the right choices the most obvious ones. Based on the simple idea that the products we buy and sell are connected to the livelihoods of others, Fair Trade is a way to make a conscious choice for a better world. A choice for Fair Trade Certified™ goods is a choice to support responsible companies, empower farmers, workers, and fishermen, and protect the environment. In other words, it’s a world-changing way of doing business.

While Fair Trade USA is ensuring that factory, and artisan workers are treated ethically, Nest, a non-profit organization that we are a member of, is setting a fair trade, ethical, standards for artisans across the globe who work out of their homes. The in-home piece impacts women in particular. The International Labor Organization estimates that there are 300 million of these ‘homeworkers’ globally, most of whom are women.

According to Nest's President, Rebecca Van Bergen, on a Forbes article, “Craft based work is the second largest employer of women in developing economies after only agriculture. One of the reasons that craft is so important as an employer of women in developing nations is that these women are often limited in their ability to work outside the home - their husbands may forbid it, it may be unsafe because of gender-based violence, and in most cases, the demands of family care don’t allow for it. The home-based nature of craftwork makes it an important sector for women, but historically, homework has been very underinvested in.”

Ikat Indonensia NTT Everina Fair Trade Ikat Indonesia Fair Trade

For us at Everina, Fair Trade is our core principle and it is a work in progress as we grow as a company. We are not perfect nor that we strive to be. But our hearts and commitment with creating Everina, is that we want to be a blessing and we want to add value for community of artisans, especially women. So what we have been practicing up to this point is that:

  • We work with economically disadvantage women artisan group in East Nusa Tenggara
  • We make sure our artisans are paid fairly according to the local standards
  • We work with artisans who don’t exploit children in their work spaces
  • Our products are eco-friendly and are sourced locally in Indonesia

Why should we shop Fair Trade?

Let's be completely honest, it's difficult to entirely purchase only Fair Trade products for all of our needs - from food, coffee, clothing to handbags. The system, especially in fashion, of fast delivery at a cheap price is still a big part of our industry. The culture of food manufacturing and factory products are still strong in our society. But we can start small. We can start in any way that we can, start from what item you can find that is Fair Trade that is affordable for you. Because when consumers start to create demand and more demand, industry will have to listen and adapt with the demand of consumers.

We see this happening with organic food industry. We have seen a transformation of this whole food industry where in 2017, the organic food industry total sales hit USD 45 billion, according to Organic Trade Association. That is huge!

So why should we start shopping fair trade? We should shop fair trade products, because it creates:

          • Income Equality. Earnings should fulfill basic household needs, regardless of volatile market prices. Our standards ensure producers, workers, farmers, and fishermen have the money needed to invest in their lives and their work.
          • Empowerment. Fair Trade empowers people to make choices for the good of themselves and their community, regardless of gender, status, position in society, or position on the globe. Rigorous standards give farmers, workers, and fishermen a voice in the workplace and the community
          • Community and Individual Well-being. When people have the capacity to invest in better futures, the result is a healthier workforce and ultimately higher quality goods. Our model is fueled by committees of farmers, workers, and fishermen who decide how to invest the Fair Trade Premium based on their community's greatest needs: often clean water, education, and healthcare.
          • Environmental Stewardship. Environmental practices have long-term impacts on the livelihoods of producers, communities, and the planet. Our standards work to keep the planet healthy for generations to come by prohibiting the most harmful chemicals and taking measures to protect natural resources.


10 Principles of Fair Trade

WFTO prescribes 10 Principles that Fair Trade Organizations must follow in their day-to-day work and carries out monitoring to ensure these principles are upheld. 

10 Fair Trade Principles World Fair Trade Org

Source: World Fair Trade Organization


Principle One: Creating Opportunities for Economically Disadvantaged Producers
Poverty reduction through trade forms a key part of the organization's aims. The organization supports marginalized small producers, whether these are independent family businesses, or grouped in associations or co-operatives. It seeks to enable them to move from income insecurity and poverty to economic self-sufficiency and ownership. The organization has a plan of action to carry this out.
Principle Two: Transparency and Accountability
The organization is transparent in its management and commercial relations. It is accountable to all its stakeholders and respects the sensitivity and confidentiality of commercial information supplied. The organization finds appropriate, participatory ways to involve employees, members and producers in its decision-making processes. It ensures that relevant information is provided to all its trading partners. The communication channels are good and open at all levels of the supply chain.

Principle Three: Fair Trading Practices
The organization trades with concern for the social, economic and environmental well-being of marginalized small producers and does not maximize profit at their expense. It is responsible and professional in meeting its commitments in a timely manner. Suppliers respect contracts and deliver products on time and to the desired quality and specifications.

Fair Trade buyers, recognizing the financial disadvantages faced by Producers and Suppliers of FT products, ensure orders are paid on receipt of documents or as mutually agreed. For Handicraft FT products, an interest free pre-payment of at least 50 % is made on request. For Food FT products, pre-payment of at least 50% at a reasonable interest is made if requested. Interest rates that the suppliers pay must not be higher than the buyers’ cost of borrowing from third parties. Charging interest is not required. 

Where southern Fair Trade suppliers receive a pre-payment from buyers, they ensure that this payment is passed on to the producers or farmers who make or grow their Fair Trade products.

Buyers consult with suppliers before cancelling or rejecting orders. Where orders are cancelled through no fault of producers or suppliers, adequate compensation is guaranteed for work already done. Suppliers and producers consult with buyers if there is a problem with delivery, and ensure compensation is provided when delivered quantities and qualities do not match those invoiced.

The organization maintains long term relationships based on solidarity, trust and mutual respect that contribute to the promotion and growth of Fair Trade. It maintains effective communication with its trading partners. Parties involved in a trading relationship seek to increase the volume of the trade between them and the value and diversity of their product offer as a means of growing Fair Trade for the producers in order to increase their incomes. The organization works cooperatively with the other Fair Trade Organizations in country and avoids unfair competition. It avoids duplicating the designs of patterns of other organizations without permission.

Fair Trade recognizes, promotes and protects the cultural identity and traditional skills of small producers as reflected in their craft designs, food products and other related services.

Principle Four: Fair Payment
A fair payment is one that has been mutually negotiated and agreed by all through on-going dialogue and participation, which provides fair pay to the producers and can also be sustained by the market, taking into account the principle of equal pay for equal work by women and men. The aim is always the payment of a Local Living Wage. Fair Payment is made up of Fair Prices, Fair Wages and Local Living Wages.

Fair Prices
A Fair Price is freely negotiated through dialogue between the buyer and the seller and is based on transparent price setting. It includes a fair wage and a fair profit. Fair prices represent an equitable share of the final price to each player in the supply chain.

Fair Wages
A Fair Wage is an equitable, freely negotiated and mutually agreed wage, and presumes the payment of at least a Local Living Wage.

Local Living Wage
A Local Living Wage is remuneration received for a standard working week (no more than 48 hours) by a Worker in a particular place, sufficient to afford a decent standard of living for the Worker and her or his family. Elements of a decent standard of living include food, water, housing, education, health care, transport, clothing, and other essential needs, including provision for unexpected events.

Principle Five:  Ensuring no Child Labour and Forced Labour
The organization adheres to the UN Convention on the Rights of the Child, and national / local law on the employment of children. The organization ensures that there is no forced labour in its workforce and / or members or homeworkers.

Organizations who buy Fair Trade products from producer groups either directly or through intermediaries ensure that no forced labour is used in production and the producer complies with the UN Convention on the Rights of the Child, and national / local law on the employment of children. Any involvement of children in the production of Fair Trade products (including learning a traditional art or craft) is always disclosed and monitored and does not adversely affect the children's well-being, security, educational requirements and need for play.

Principle Six:  Commitment to Non Discrimination, Gender Equity and Women’s Economic Empowerment, and Freedom of Association
The organization does not discriminate in hiring, remuneration, access to training, promotion, termination or retirement based on race, caste, national origin, religion, disability, gender, sexual orientation, union membership, political affiliation, HIV/AIDS status or age.

The organization has a clear policy and plan to promote gender equality that ensures that women as well as men have the ability to gain access to the resources that they need to be productive and also the ability to influence the wider policy, regulatory, and institutional environment that shapes their livelihoods and lives. Organizational constitutions and by-laws allow for and enable women  to become active members of the organization in their own right (where it is a membership based organization),  and to take up leadership positions in the governance structure regardless of women’s status in relation to ownership of assets such as land and property.  Where women are employed within the organization, even where it is an informal employment situation, they receive equal pay for equal work.  The organization recognizes women’s full employment rights and is committed to ensuring that women receive their full statutory employment benefits. The organization takes into account the special health and safety needs of pregnant women and breast-feeding mothers.

The organization respects the right of all employees to form and join trade unions of their choice and to bargain collectively. Where the right to join trade unions and bargain collectively are restricted by law and/or political environment, the organization will enable means of independent and free association and bargaining for employees. The organization ensures that representatives of employees are not subject to discrimination in the workplace.

Principle Seven:  Ensuring Good Working Conditions
The organization provides a safe and healthy working environment for employees and / or members. It complies, at a minimum, with national and local laws and ILO conventions on health and safety.

Working hours and conditions for employees and / or members (and any homeworkers) comply with conditions established by national and local laws and ILO conventions.

Principle Eight:  Providing Capacity Building
The organizations seeks to increase positive developmental impacts for small, marginalized producers through Fair Trade.

The organizations develops the skills and capabilities of its own employees or members.Organizations working directly with small producers develop specific activities to help these producers improve their management skills, production capabilities and access to markets - local / regional / international / Fair Trade and mainstream as appropriate. Organizations which buy Fair Trade products through Fair Trade intermediaries in the South assist these organizations to develop their capacity to support the marginalized producer groups that they work with.

Principle Nine:  Promoting Fair Trade
The organization raises awareness of the aim of Fair Trade and of the need for greater justice in world trade through Fair Trade. It advocates for the objectives and activities of Fair Trade according to the scope of the organization. The organization provides its customers with information about itself, the products it markets, and the producer organizations or members that make or harvest the products. Honest advertising and marketing techniques are always used.

Principle Ten: Respect for the Environment
Organizations which produce Fair Trade products maximize the use of raw materials from sustainably managed sources in their ranges, buying locally when possible. They use production technologies that seek to reduce energy consumption and where possible use renewable energy technologies that minimize greenhouse gas emissions. They seek to minimize the impact of their waste stream on the environment. Fair Trade agricultural commodity producers minimize their environmental impacts, by using organic or low pesticide use production methods wherever possible.

Buyers and importers of Fair Trade products give priority to buying products made from raw materials that originate from sustainably managed sources, and have the least overall impact on the environment.

* Principles of Fair Trade, source: World Fair Trade Organization


Everina babes, thank you for taking time to read these. We hope that you are inspired to start shopping, if you haven't already, responsibly. We hope that you start researching and finding the right products for you.

We believe that it's about progress not perfection. 


Much love,

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