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Insurable Interests

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Insurable Interests

Vol. 6, Issue 3November 2010

FINANCIAL INTERESTS

A Look at Fair Trade

Fair trade is a concept that has gained steam in recent years. The basic idea is to ensure that the people in underdeveloped countries who produce commodities and other products for use in developed countries get a fair price for what they produce. There are many fair trade labeling organizations and many products affected by fair trade. One of the most popular fair trade products is coffee, and it offers a good look at how the system works overall.

Americans drink more than 20 percent of the coffee produced in the world, and most of the coffee growers are in underdeveloped areas of South America, Asia and Africa. The main idea behind fair trade coffee is to help ensure that growers get a fair price for their coffee.

There are several organizations that certify coffee as fair trade, which adds to the confusion. In general, though, any coffee marked fair trade probably provides benefits to growers. One of the main certifying organizations is Fairtrade Labelling Organizations International, or FLO, an international group of 24 organization. The U.S. branch of FLO is Fair Trade USA.

FLO’s fair trade principals include:


  • Fair prices. The organization sets a guaranteed minimum price and adds a premium for organic growers. Buyers can pay more than the minimum if they choose, and many specialty coffee buyers pay considerably more than the fair-trade minimum, even if they are not fair-trade certified.

  • Fair working conditions. Workers on farms that are fair-trade certified must have safe working conditions, be paid a living wage and have freedom of association. They cannot use child labor.

  • Direct trade. Buyers work as directly as possible with fair-trade certified growers, so as to avoid the middleman. This can help keep the cost of fair-trade coffee down.

  • Democratic and transparent organizations. Fair-trade growers must be able to decide in a democratic fashion how to use the money they make from selling their goods.

  • Community development. Fair-trade growers invest some of the money in things like schools, health care, job training, etc.

  • Environmental sustainability. Fair-trade growers cannot use genetically modified organisms. They are encouraged to use sustainable farming methods and to limit the use of chemicals.

In addition to coffee, which Fair Trade USA has certified since 1998, the organization certifies tea, herbs, cocoa and chocolate, fresh fruit, sugar, rice, vanilla, flowers and honey.

Fair Trade USA does not certify handicrafts or other non-food goods, but there are organizations that do. If you are interested in fair-trade products, look for a certification on the label.

Many major retailers—including specialty retailers like Starbucks, Seattle’s Best, Whole Foods, and Trader Joe's; mainstream markets like Safeway and Kroger; and even discount or wholesale stores like Target, Costco and WalMart—offer fair-trade-certified coffee products. You also can buy fair-trade coffee at fair-trade stores such as Ten Thousand Villages.

This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.

Photo: iStockphoto.com

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