Fair trade has a lengthy history, and it did not begin with Fair Trade cocoa or any other food product. In reality, it began with the seeds of what would become Ten Thousand Villages, a handicrafts business.
The notion goes back to 1946, when Edna Ruth Byler began selling crafts acquired from a Puerto Rican women’s sewing club to friends and neighbors in the United States. The concepts of this movement gained popularity in Europe throughout the years that followed, expanding into other sectors. This resulted in the replication of Edna’s business model throughout the 1960s, with the overall goal of strengthening underprivileged populations.
- 1 1960s: UN Conference on Trade and Development (UNCTAD)
- 2 Max Havelaar Label, 1980s
- 3 TransFair International (TFI) and the Fairtrade Foundation were founded in 1992. (FtF)
- 4 Chocolate is the first Fairtrade product introduced in 1994. (Maya Gold)
- 5 Fairtrade Labeling Organizations International was founded in 1997. (FLO)
- 6 New Fairtrade Mark in 2002
- 7 FLOCERT was established in 2003.
- 8 Partner Withdrawals in 2011
- 9 2011-2014: Updates and Modifications
- 10 Increasing Fairtrade Premiums in 2019-2020
1960s: UN Conference on Trade and Development (UNCTAD)
The Generalized System of Preferences (GSP), a system of preferential tariffs (import levies), was debated at the United Nations in 1968. Its primary goal was to reduce import levies on developing-country commodities. To stress the formation of equitable economic ties, the phrase Trade not Aid was established at the time.
The GSP programs were intended to be universal in order to prevent preferential treatment across allies. Nonetheless, the outcomes were varied, owing in part to the agreement’s generic phrasing. Simple manufactured commodities, for example, which are often essential export exports of impoverished countries, were eliminated.
Also, not all countries were involved, and the initiative tended to favour wealthier emerging countries. Notwithstanding these flaws, the United States and Europe expanded coverage and inclusion via various initiatives.
Max Havelaar Label, 1980s
The Max Havelaar Foundation was founded in the Netherlands in 1988 and became the first Fair Trade labeling organization. The name Max Havelaar was inspired by a 19th-century Dutch book (authored by Multatuli) that was critical of Dutch East Indies colonization. The label was created to provide customers assurance that coffees displaying the mark were obtained responsibly.
The group strengthened small producers by enhancing their market access, revenue creation, different types of assistance, and internal organization building.
TransFair International (TFI) and the Fairtrade Foundation were founded in 1992. (FtF)
The European Fair Trade Association (EFTA), a coalition of alternative trade groups, showed interest in the labeling idea and in producing a label that would include coffee and other items. This resulted in the establishment of TransFair International (TFI) in 1992, with its first Labeling Initiative in Germany. Further TransFair attempts in Canada, Japan, and the United States would soon follow.
In the same year, a group of UK non-governmental organizations (NGOs) with a long history of supporting fair trade efforts (such as Oxfam, Tradecraft, Christian Aid, and others) created the Fairtrade Foundation (FtF). The criteria, monitoring techniques, and degrees of stakeholder group participation in these various labeling groups varied. The Max Havelaar Foundation, which subsequently reassessed its expansion outside coffee, was unique in that its governance structure included farmers as well.
Chocolate is the first Fairtrade product introduced in 1994. (Maya Gold)
The first Fairtrade product was certified in 1994, and it was a chocolate bar. Green and Blacks, a British chocolate business, invented Maya Gold, which is now widely available on Whole Foods stores. But, at the time, they made the Maya Gold chocolate bar using Fair Trade organic cocoa obtained from the Toledo Cacao Farmers Association for $1.75 per pound, which was three times the market cost.
Despite the name Maya Gold, members of the co-op included Americans, Africans, and East Asians who worked for the same company. When the BBC Good Food Show coverage in London flew a crew that carried a bar to the Belize cocoa producers, the introduction of Maya Gold would create attention. Once other stations caught up on the clip, the story quickly went throughout the globe.
Fairtrade Labeling Organizations International was founded in 1997. (FLO)
In 1997, 17 competing fair trade labeling groups collaborated to standardize and simplify standards and procedures. Fairtrade Labeling Organizations International, the most well-known worldwide fair trade certification organization, was founded during this summit (FLO). FLO was then the non-profit umbrella organization.
This meant they were in charge of establishing general Fairtrade standards for labor, cooperative structure, and benefits. FLO’s primary purpose was to help underprivileged communities in the Global South improve their market access and trade connections with the Global North by expanding their labeling program.
Apart from ethical assurances, the Fairtrade logo indicates that the items fulfill Fairtrade’s unique social, economic, and environmental requirements. There were no costs for farmers at the time, and certification was financed by collections from certified cocoa purchasers.
Fairtrade is an alternative to traditional commerce that is built on a collaboration between producers and consumers. Fairtrade provides farmers with a better bargain and improved trading arrangements. This provides producers with the ability to better their life and prepare for the future. Fairtrade provides customers with an effective approach to fight poverty through their regular purchases.
International Fairtrade Organization
New Fairtrade Mark in 2002
The many variations of national Fairtrade labels were replaced with a common Fairtrade mark in 2002, according to Fairtrade International’s Fairtrade mark requirements. The design was later simplified in 2011, and then again in 2018.
The most recent modification aimed to provide better transparency about the Fair Trade composition of the items. The endeavor to standardize the Fairtrade mark helped to unite activities in various locations and increase the label’s recognizability.
FLOCERT was established in 2003.
FLOCERT was founded in 2003 to improve trust and credibility in the Fairtrade brand. FLOCERT is the name of the independent subsidiary responsible with verifying and inspecting the records and operations of Fairtrade partner farmers. This ultimate separation of role between the standard setter and the auditor was required.
It enabled the organization to comply with the International Social and Environmental Accreditation and Labeling Alliance’s (ISEAL) Code of Good Practice in Standard Setting. FLOCERT would go on to gain ISO 65 accreditation, which would boost the credibility of its certification system even more.
Owing to the increased expenses of ISO certification, FLOCERT implemented a charge scheme for manufacturers and partner firms. This includes a variable charge for the original application and certification, as well as maintenance and renewal, as well as any changes to their certification.
Partner Withdrawals in 2011
Fair Trade USA (FTUSA) withdrew from the worldwide Fairtrade system on December 31, 2011. They indicated that this was done in order to develop their own certification process, which they call Fair Trade for Everyone. The inclusion of large-scale plantations as certifiable businesses for their label is a key divergence, deviating from FLO’s attempts to empower small farmers. Fears developed as a result of FTUSA’s departure that they might decrease the requirements for fair trade certification.
Fairtrade America is a distinct organization and the last American member of Fairtrade International (much like Miss America vs. Miss USA). In 2017, Cadbury also created its own Cocoa Life initiative, with which Fairtrade International has partnered. Cadbury’s decision was claimed to be motivated by a desire to reclaim control of the Mondelez business by launching their own initiatives.
But, after decades of Mondelez and others neglecting child labor, that’s a hard justification to swallow. Charity and other Fairtrade participants were openly critical of the move, which was regarded as an undoing of Fair Trade accomplishments and a signal for other producers to follow suit.
2011-2014: Updates and Modifications
FLO has continued to provide revised materials throughout the years in order to enhance procedures and broaden the scope of its standards. Significant changes include the May 12, 2011 New Standards Framework and the January 14, 2014 New Hired Labor Standard, both of which are discussed in this page. The New Standards Framework sought to make it simpler for small producer groups to comprehend and comply with certification criteria.
Workers’ rights and the ability to organize were stressed in the New Hired Labor Standards. They also issued the New Ethical Standards to promote responsibility within Fairtrade networks. They assist to clarify and enhance the organization’s position on the 10 principles that they cherish and feel will aid in the achievement of Fairtrade aims.
Increasing Fairtrade Premiums in 2019-2020
A successful implementation of a 20% rise in the Fairtrade Minimum Price for cocoa was also referenced in a 2020 Fairtrade annual report. This rise occurred in October 2019, raising certified farmers’ profits by $235 per metric ton. This coincided with the Ghanaian and Côte d’Ivoire governments requiring purchasers to include an extra Living Income Differential (LID) payment for their cocoa purchases.
Fairtrade’s minimal price rise brought it in line with LID criteria, making all Fair Trade cocoa compliant with the new criterion. Additional initiatives to assist farmers with a decent wage have also been announced, including the addition of data collection tools, investments in sustainable agriculture, and smart use of the Investment Premium.
All of the facts and statistics in this article are the most recent data available at the time of writing.