Developing Fair Trade Standards and Certifications

The Fairtrade Labelling Organizations International (FLO) is building global monitoring and labeling coalitions to standardize Fair Trade criteria. This umbrella organization oversees labeling standards, such as price minimums and pre-paid requirements, and manages a registry of producers committed to Fair Trade. These producers, including small farmers and cooperatives, sell directly to manufacturers and distributors, ensuring adherence to Fair Trade principles.

Criteria for Fair Trade Certification

Through product labeling initiatives, FLO has set specific standards to determine eligibility for Fair Trade certification. Producers must meet criteria such as:

• Paying farming families a fair price that provides decent living wages.
• Helping small farmers gain access to necessary working capital loans.
• Establishing direct, long-term trading relationships between buyers and farmers.
• Offering a price that covers the cost of production.
• Prioritizing a social premium to fund community development.
• Providing partial advance payments to prevent small producers from falling into debt.
• Maximizing benefits to farmers by following Fair Trade standards.

Impact of Fair Trade on Communities and Markets

Fair Trade helps deliver trade benefits directly to needy communities. By connecting farmers with cooperatives and bypassing middlemen, it guarantees farmers a fair price and promotes sustainable practices. It also enables consumers to purchase high-quality Fair Trade products through mainstream retailers. The positive effects of Fair Trade extend beyond farming communities to the broader food industry, where product sales have grown by nearly 40% since the 1980s. Many consumers are now willing to pay more for Fair Trade products, knowing that farmers and workers receive fair compensation.

Global Reach and Member Organizations

As of April 2011, FLO has 24 members worldwide, including 19 Labelling Initiatives, three Producer Networks, and two Associate Members. These organizations contribute to the Fairtrade labeling model and play a central role in decision-making within FLO, promoting products carrying the FAIRTRADE Certification Mark globally.