Unraveling the True Beneficiaries of Fair Trade

Who really benefits from Fair Trade? Fair trade is defined as the practice of directly benefiting producers in the developing world by buying straight from them at a guaranteed price. As a first world country, the United States is enamored with the concept of helping those in need, and fair-trade products are an essential component to that idea. A consumer should research and determine for themselves who fair trade truly benefits: the producer or the buyer. The principles that govern fair trade will provide enough information to substantiate whether buying fair-trade items at premium prices is beneficial to the small farm producer. One principle of fair trade is the agreed minimum price that is set above the market price. Each fair-trade

A social premium, usually 10%, is used to focus on the development and technical assistance that is needed on the farms. On the positive side of this requirement, the FLO claims that the social premium was worth $65 million in 2012, and it went to building community facilities like schools, hospitals and improving farm infrastructures (FLO 2013b). This seems promising, but there are several academics that have expressed concern that fair-trade faces a seriously large gap dividing the benefits depicted by fair-trade and the reality of the advantages achieved through it. One example of this where the social premium is such a small and negligible amount that when it is handed down to the farmers there is nothing of

According to both Fair Trade USA and the FTI, certification ensures that pricing, environmental and working condition standards established under fair-trade principles are being met. An independent third party, like IMO fair for life, conducts the farm visits while Fair Trade USA and FTI do the supply-chain audit. Because the FLO and FTI contract the certification out to third-party organizations, this adds another bureaucratic layer