Published On: Mon, Jul 1st, 2019

How Fair Trade Benefits People in Poverty

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Half of the world’s population live in poverty and are expected to survive on less than $2 a day. This means they cannot afford an education, health care, or acceptable cost of living standards. Because of the global trade situation, many of these people are unable to break themselves free of the restrictions of poverty.

Developing countries account for only 0.4% of the world’s total trade, which means they have very little power to stand up for their rights. Producers are less able to employ skilled negotiators, and this often leads to unfair trade agreements which see them making little or no profit.

The idea behind fair trade practices is that producers in developing countries are offered the chance to work themselves out of poverty by participating in trade agreements that see they receive a fair price for their goods.

Principles of Fair Trade

The World Fair Trade Organisation provides ten principles that fair trade organisations must work to in order to ensure the standards of fair trade are being upheld. These principles include:

Creating Opportunities for Economically Disadvantaged Producers: Fair trade organisations should seek to help producers who have been marginalised by the trading system, and help enable them to become economically self-sufficient.

Transparency and Accountability: Communication must be clear, and the actions of management must be transparent.

Payment of a Fair Price: Workers are paid a price which has been mutually agreed on, and which reflects the time, resources, and skills put into creating the product.

Child Labour and Forced Labour: Any work using children must adhere to local laws, and will not affect the well-being, security, or education of the child. No organisation should use forced labour.

How it Makes a Difference

In most cases, the sellers of fair trade goods source products from a producer who supports a collective of small group or individual producers within a community. MINKA is a producer organisation in Peru which is comprised of 62 community organisations. These 62 organisations are made up of 3,000 individual artisans and farmers.

Individually, these workers would have little chance of protecting themselves against exploitation and unfair trade practises, but as a collective they have more power for negotiation. The producer organisation ensures that they have rights, and that they are paid a fair price for their goods.

Fair trade producers are also helping to improve women’s rights in developing countries. Prokritee is a producer group in Bangladesh whose aims include helping women who are the heads of their households and have little or no income and few assets. Prokritee supports around 700 producers, with 95% of these being women from rural areas.

Fair Trade, Poverty

Asha Joydhor makes handcrafts for one of Prokritee’s producers. Her involvement with Prokritee has allowed Asha to provide a higher education for her three children, and to help support her father and mother-in-law who, through farming, bring in income only six months of the year.

A similar story is that of Bhagbati from Nepal. Bhagbati is supported by the Association for Craft Producers (ACP). She was forced to drop out of school early because her family could not afford to keep her there; however, through her work with ACP, Bhagbati has been able to save to study a Bachelors degree in Business Studies. She intends to use the information from this degree to help promote the weaving group she leads.

Fair trade practises help individuals to support themselves and their families, but they also benefit whole communities. Villages are able to build health centres and increase access to basic necessities, such as clean drinking water. Fair trade does not just benefit the individuals, but allows communities as a whole to create a better life. Through supporting fair trade, you are helping others to work their way out of poverty and into a better life.

About the Author

- Paul Linus is an eminent online journalist who has been writing news, features and editorials on different websites from across the world for about a decade. He can be contacted at

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