The Disadvantages of Fair Trade

Fair Trade products are part of a program started by people who wanted to use their purchasing power to ensure that small farmers, crafters and artisans had the chance to compete with bigger corporations and make a fair wage doing it. Any small company that wants to operate under the Fair Trade umbrella needs to follow certain rules and regulations and get certified. Certification needs to be renewed every couple of years.

Fair Trade USA
Fair Trade USA

That oversight makes sure that companies don’t just follow the rules in order to get certified and then change their business practices. The Fair Trade program is largely viewed as being good for consumers and good for small businesses. But, some people say that the disadvantages of Fair Trade outweigh the advantages. Take a look at some of the disadvantages and decide for yourself if purchasing Fair Trade products is something that is right for you.

Fair Trade Products Cost More

It is true that consumers pay a little more for products that are certified Fair Trade. Any products that are ethically produced from produce to shoes are going to cost more than similar products that are sold at big stores. But, price is not the bottom line for socially conscious consumers. Typically Fair Trade items are no more than a few dollars more expensive than the alternatives. Those few dollars might equal skipping a cup of coffeeshop coffee or waiting an extra week to buy a new sweater that you want. But to the artists, crafters, farmers and small business owners whose products you are buying those few dollars have a huge impact. Those extra dollars mean that a child can go to school, or a woman who is trapped in an unsafe situation can finally file for divorce and support herself. Those dollars eliminate food insecurity for families and provide clean water for communities.

Fair Trade Certification is Expensive

Another disadvantage that is often mentioned is that getting Fair Trade certification is expensive for the individuals and small businesses that the program wants to help. The initial process of getting certified can be expensive. But the benefit to the business is enormous. Being certified as a Fair Trade business can increase sales by 15% or more for most businesses. There are expenses to running any business. Paying for the certification necessary to be part of the program is a business expense that provides a great return. Businesses also need to renew their Fair Trade certification every couple of years which does cost a bit, although it costs less than the initial certification. Being re-certified every few years is important because it ensures that the business if following the protocols of the program. Because of the added marketability that the Fair Trade mark brings the cost is not a hindrance to most businesses.

It Doesn’t Make a Difference Which Fair Trade Product You Buy

This disadvantage of Fair Trade is one that consumers who aren’t really familiar with the program often raise. They think that it really doesn’t make a difference if you buy these products or not so people should just buy the cheapest product. To a large corporation it’s true that a single purchase won’t make a difference. But to a small independent business that purchase does matter. Every dollar earned can make a dramatic difference for a family owned business or artist cooperative. It might seem like buying these products isn’t really an important choice to make because you don’t see the impact but dig a little deeper into how Fair Trade works and you will be amazed at the difference your purchase can make.

Disadvantages of Fair Trade

There are disadvantages of Fair trade and advantages. Yet there are still companies that dislike the implementation. Some companies involved in selling coffee, this area has been traditionally dominated by four major companies. These companies claim that the reason why coffee farmers continue to suffer is because of fair trade. They argue that the movement has allowed many farmers to enter the business of growing coffee. Thus, according to them, this has lead to the overproduction of coffee and ultimately to lower prices. They further argue that because fair trade sets a minimum price, high-cost producers are prevented from exiting the market. Without the minimum price, some producers would likely go out of business ensuring that the supply of coffee goes down and thereby increasing the price.

Fair Trade Skyscraper
Disadvantages of Fair Trade

Why Some Companies Are Against Fair Trade

The real problem lies  not in why they complain about the implementation of it but in how they have managed to circumvent some of the rules and thus threatening to discredit the whole movement entirely. What these coffee companies did was to have their own ethical branding of their respective products. Thus consumers are unable to distinguish which are fair trade coffees and which are not due to the saturation.

Fair Trade Organizations

Some fair trade organizations are developing a unique certification mark. This ensures that the minimum price remains at $1.25 per pound and that the premium is still investment for social services. Still the organizations admit that ethical labeling has somewhat decreased the effectiveness of certification logo. The certification has been, for a long time, one of the advantages of fair trade over multinational corporations. But because of the ethical labeling this same uniqueness has been undermined. Thus by having their own implementation, they have managed to deceive consumers.

One company for example has the Fair Trade FLO label on their products simply because it buys its coffee from producers that carry the fair trade product certification. Another company has also managed to get a certification despite the fact that its ability to mass produce coffee has been one of the reasons why small coffee farmers are facing problems.

Implementation of Fair Trade

Multinational companies will always try to do what they can to gain the much needed competitive advantage. It is up to organizations to ensure that the implementation of fair trade corrects this error.

What do you think? I’d love to hear your thoughts on this intersting topic of the Disadvantages of fair trade.

Fair Trade Federation

I just found this great resource for fair trade products. Check it out for yourself.
There is a download list available for all sorts of fair trade products for sale from all over the world. If you know of other comapnies, I’d love to hear from you, so we can share the knowledge about Fair Trade Clothing across the globe!

Why buy Fair Trade shoes?

When you decide to purchase fair trade products including shoes, you are supporting the manufacturers and the original producers of the materials that were used to make the shoes. Unlike other shoes, fair trade companies assist in the development of the local communities and their suppliers by paying a fair wage and investing in local projects and provides suitable working environments for the workers.

A Blue Fair Trade Sandals, which is a more decorative style.

Fair Trade Working Conditions

Fair trade products is about making decent working conditions, better prices, better terms of trade and local sustainability for workers and farmers in the third (developing) world that are manufacturing fair trade products. By requiring companies to pay sustainable prices for their goods, buying fair trade addresses some of the injustices of conventional trade, which traditionally hurts the poorest, weakest shoe producers. It enables them to improve their position and have more control over their lives.

If you have ever bought Fair Trade shoes I’d love to hear from you and tell me what you think of them!

Who started Fair Trade?

This movement of fair trade started over sixty years ago with the founding of Ten Thousand Villages. The organization was the brainchild of Edna Ruth Byler, a businesswoman who was struck by the poverty that she witnessed when she went on a trip to Puerto Rico. She believed that artisans in developing countries can have sustainable economic opportunities if they were provided them with a viable marketplace in other rich countries.

Where To Source Fair Trade Products

There are many companies like Ten Thousand Villages that builds long term buying relationships with artisans who then receive a fair price for their work and consumers have access to fair trade clothing, gifts, fair trade products, accessories and home décor from around the world.

I’d love to hear where do you buy your Fair Trade products from?

Where to find Fair Trade Shoes