In applying the standards to small-scale producers and the workers, ‘FLO International’ sets three common fair trade principles to follow. Each of these areas is necessary if the practice of the fair trade act to succeed.
These 3 principles are in the areas of:
- Economic Development
- Environmental Development
- Social Development.
The First Fair Trade Principle
– Economic Development
Under the principle of economic development, for any goods or products to be certified as fair trade products it requires buyers to pay the minimum price and, in some cases, the fair trade premium, to the producers. The goal of the minimum price is to help the producers cover the cost of the sustainable production. The premium is to be used as capital and invested in improving the lives of the workers and the producers alike. This is done through investments in health, environment, and education, among many others. To ensure that the amount is used correctly, it is the workers who decide what to prioritize. They are also the ones charged with managing the amount obtained from the premium, this empowers the workers and the producers.
The Second Fair Trade Principle
– Environmental Development
The principle relates to environmental development. Workers and producers alike must ensure that their products are grown using sound and environment friendly agricultural methods. These include minimizing on the use of agrochemicals, maintaining the fertility of the soil and the water resources, and managing waste properly. The most important however is that producers never use genetically modified organisms. Though the FLO International does not require organic certification, doing so ensures that the producers will be able to sell their products at higher minimum prices.
The Third Principle
– Social Development
Social development is just as important as the other two. Standards require producers to have an organizational structure that will allow them the ability to directly bring their products to the market. It is also important that everyone involved in the production has a say on the decision-making process and it is encouraged that everyone participate when such activities are done. In addition, the organization must be set-up in a way that there is transparency and there is no discrimination.
The Heart of the Fair Trade Definition
The principles are stated in general terms in order to allow for flexibility to the producers and the farmers. This is more effective since being too specific may result in the producers not being able to understand and meet the guidelines. These three principles are the heart of what fair trade is all about, it is important not only for producers but also for buyers to always remember it.