Exploring the Link Between Poverty and Trade
Fairtrade International discusses Fair Trade as a vehicle to combat poverty
Fair Trade looks at trade as a means to directly address poverty. In a new position paper entitled “Poverty Reduction and Trade: Fair Trade as a Vehicle to Combat Poverty (PDF),” Fairtrade International (FLO) explores the link between market access and deep cycles of poverty. The paper outlines how the current global trading system places farmers and workers in the developing world at a disadvantage.
As a result of Internationally set prices, price volatility and increasing food prices, farmers are extremely vulnerable to the poverty trap. They also face barriers to competitiveness and lack access to information, investment, infrastructure, education and healthcare. Many lack the necessary organizational and management skills to operate in an international market, making it much more difficult to earn a fair wage for thier labor.
A variety of studies over the last ten years show that Fair Trade leads to the social and economic empowerment of farmers and workers. The Fair Trade model uses a variety of tools to support farmers, including: a minimum price that creates an effective safety net; the Fair Trade Premium that is invested in community development projects; access to specialty markets; and technical support. With Fair Trade certification, workers enjoy better working conditions and earn better living wages.
This paper is part of a series of position papers by Fairtrade International. FLO’s position papers are intended to strengthen understanding and promote dialogue about key issues in the world of Fair Trade.
Fair Trade USA is one if 24 members of Fairtrade International, the organization that establishes international Fair Trade standards and monitors impact worldwide.