When you buy Fair Trade chocolate, you are helping the cocoa farmers who produced the raw ingredients to get a higher price for their goods and thus develop a sustainable framework for continued production. Fair Trade was initially conceived in the 1940s and today it benefits more than 1 million workers in 58 developing countries, according to Fair Trade Labeling Organizations International (FLO). In 2008, Fair Trade sales amounted to 2.9 billion euros ($3.6 billion) worldwide, an increase of 22 percent from the previous year.
Whenever a product carries the Fair Trade label, the producers and traders of the raw ingredients have met the Fair Trade standards. One set of standards applies to shareholders and small cooperatives, and the other applies to workers. These standards require the shareholders to operate in a democratic way and the workers to be paid an adequate wage and have proper housing, health and safety standards, and access to labor unions. The World Fair Trade Organization (WFTO) also lists proscription of child and forced labor, gender discrimination and environmental sustainability among the Fair Trade standards.
According to the WFTO, Fair Trade began in the United States in 1946 when Ten Thousand Villages, a crafts cooperative, began buying needlework from Puerto Rico. It spread to Europe in the 1950s, when Oxfam began importing crafts made by Chinese refugees and selling them in its shops in the United Kingdom. Oxfam-UK created the first Fair Trade Organization in 1964, while at roughly the same time a parallel organization called Fair Trade Original was established in the Netherlands. In the 1960s and 70s, non-governmental organizations (NGO's) and concerned individuals formed many Fair Trade organizations worldwide. FLO specifies 1988 as the year the first Fair Trade label was launched. FINE, an association of the four main Fair Trade networks, was formed in 1998.
The FLO outlines the benefits that Fair Trade offers to producers and consumers alike. It offers producers stable prices for their goods and a premium on top of these prices to improve the quality of their lives. Because Fair Trade producers jointly manage the FLO, it gives them control over decisions that affect their lives and empowers them to establish democratic organizations. The benefits for individual consumers include the opportunity to purchase products in line with their ethical principles, and companies get a credible way to ensure their trade has a positive effect on the people at the beginning of the chain. Fair Trade also benefits the environment by encouraging workers to use protective, sustainable farming methods and to refrain from using harmful chemicals or genetically modified organisms (GMOs).
Despite its altruistic motives, the Fair Trade movement may not be working as envisioned and may be creating unforeseen market problems. According to Hal Weitzman in the Financial Times, farmers in Peru were not paying temporary workers the required wage in 2006, and Weitzman noted that there was no way to force them to comply with the Fair Trade standards. Richard Gray, writing in the Telegraph in 2008, cited a report from the Adam Smith Institute that said Fair Trade was failing to have an effect on poverty in developing countries, was skewing world prices upward and was encouraging uncompetitive farming methods and the hiring of seasonal, rather than permanent, workers.
The Fair Trade movement has the potential to put a human face on trade, and bring consumers closer to the cultures of producers. Advertising for chocolate marketed under the Fair Trade label includes references to these cultures, and indigenous iconography is often used to promote the product. This increases consumer awareness of conditions and cultural norms in the producing countries, and thus brings the global community closer together.