What is Fair Trade?
The Fair Trade movement started 25 years ago as an education concept, using alternative trade methods to show to the European public the injustice and social unbalance caused by international trade. The terms of trade (price relation between raw materials and processed/technical goods) developed very much in favour of the industrialized countries at that time. Fair trade started to counter this development in establishing special criteria for sustainable trade with (mainly) smallholders, starting with ‘colonialism’ products like coffee, tea and cocoa. The most important criteria are:
-A defined part of the price (surplus) is paid for community tasks/social issues of the cooperative or farm workers community.
-The trade relation should have a long term perspective.
-Part of the price is paid in advance in order to make the producers independent from local credits (with exaggerated high interest rates)