(un)Fair Trade

The Fair Trade concept was pioneered by missions groups and non-profits back in the early ‘40s. The idea is that if a product is produced with Fair Trade practices, one can assume it was created “fairly”. This concept has become a household term due to the proliferation of corporate transparency caused by the internet boom in the early ‘90s.

However, there has been some speculation as to whether Fair Trade is actually bolstering sustainable growth or just allowing for a new marketing ploy for Fair Trade certified businesses. In many cases, the new wages are just a fraction higher than what it was before, and typically still far below the market value of the product.

In many cases, Fair Trade seems to be (at best) merely making business “better than it was”. While I do believe Fair Trade is positive and necessary, I also believe it’s time to move beyond it.

This calls for pricing that is determined by the market value of a product rather than just what you can buy it for. If a boutique sells a product for $200, that would indicate that it was purchased for about $100 from a wholesaler that bought it for $50 from the artist. But that’s far from typical. A product like this is more likely to be purchased for closer to $5-$10 in a place like Rwanda or Kenya.

But we have the opportunity to change that dynamic. If we pay according to the market value of the product, we still experience great margins, the artist receives a “fair” price for their product, and the retail margin isn’t affected. And this raises the bar for what buyers are expected to pay in developing countries. This seems like a logical scenario doesn’t it? Anything less just seems…unfair.

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