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How does Fair Trade work?
Fair Trade is responsible commerce that takes into consideration the value of all people, from the producer to the consumer. This unique business model brings together producers and buyers with the common goal of creating sustainable livelihoods.
Buyers and producers work directly with each other to develop commercial relationships, trust and mutual support. Both the buyers and the producers adhere to a set of Fair Trade criteria established by the International Fair Trade Association for handicrafts, or the Fair Trade Labeling Organization for agricultural commodities such as grapes, used in producing wine.
The buyer agrees to pay producers a Fair Price for their crafts, and guarantees a minimum stable price for food products. Each price point must provide a living wage. Buyers must also work toward developing long term business for the producers so they are capable of future development and investment in their farms.
The producer group agrees to provide good working conditions, safety procedures and adequate health standards for all workers. In addition, democratic working processes must be available for groups receiving a Fair Trade premium. The use of this money is decided upon by the democratically elected workers committee. Producers also agree to use environmentally sound production methods.
Both the buyer and the producer group agree to promote human rights, especially those of women, children and people with disabilities. As buyers and producers meet milestones, they are expected to continuously improve upon these standards.
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What is the history of Fair Trade?
Fair Trade has been around for decades. Organizations have been working overseas and within their own countries to help develop better lives for people in need. Over the years thousands of people have been given opportunities to improve their lives by selling Fair Trade products.
The term "Fair Trade", however, is more recent. Fair Trade is a response to some of the effects globalization has had on third-world producers. Depreciation of wages, increased subsidies used by developed nations, and instability in prices for primary commodities have resulted in an increase in world poverty.
Many western Fair Trade companies see these same problems in their own countries. In response to this, Fair Trade organizations and companies like Etica are working hard to develop more markets for producers in the United States. We feel that many Americans face the same problems that our third-world producers do and we will therefore not limit our outreach.
Fair Trade has now become a common phrase in Europe as 50% of UK residents can identify the Fair Trade mark. This wave of educated consumerism is starting to make its mark in the US. Global Fair Trade sales are expected to reach $1 billion in 2007.
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Where can I buy Fair Trade products?
You can purchase Fair Trade products on this site and at a number of stores throughout the Untied States.
Check out our Fair Trade Links page to learn about more Fair Trade retailers in your area.
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When I purchase Etica wine, where does my money go?
Let's look at one bottle of wine; we'll say this bottle costs $10.
- 1 dollar and 85 cents goes directly to the vineyard
- 20 cents of this total goes directly to the Fair Trade sponsored Workers Organization to be used for social development. In Chile, this money has built homes, helped with health insurance and purchased a school bus. In South Africa it has purchased a community television, paid for classes, and supported a childcare facility.
- 1 dollar 65 cents goes to the wine cellar, farmers, and workers. Through Fair Trade they are guaranteed a livable wage.
- 53 cents goes to shipping
- 6 cents covers insurance
- 5 cents pays tariffs
- 23 cents covers federal taxes
- 6 cents pays state taxes
- Less than a penny for brokering fee
- Less than a penny for paperwork fees
- 13 cents goes to warehousing
- 9 cents to cover waste
- 84 cents to commission
- 64 cents for handling/delivery
- 4 cents will go to Transfair stamp (until this stamp is developed this money will go towards the Etica Scholarship)
- 2 dollars and 90 cents goes to the retail store
- 2 dollars and 20 cents goes to Etica
- 11 cents of this total goes to the South African Community Development Committee
- 11 cents goes to the Etica scholarship fund
- 1 dollars 98 cents goes to advertising Etica products, import/wholesale licensing, staff salaries, visits/inspections of fair trade vineyards and general office expenses.
These numbers may look small but they add up quickly.
Etica, in its first year of business, hopes to give one local high school student the opportunity to attend university with money raised by the Etica scholarship fund.
The South African Community Development Committee is an organization started by the Citrusdal farmers 30 years ago. Although not funded by Fair Trade money, Etica feels that it is an important organization for the betterment of South African workers and farmers. It is for this reason that Etica uses its personal funds to support the committee, which offers classes and training for farm workers and their families.
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How do I know the product I am purchasing is 100% Fair Trade?
Etica goes to great lengths to ensure that each and every product we sell is 100% Fair Trade. We work with US and international Fair Trade organizations to research producers and audit them, while developing direct and open relationships. Our business relationships are based on mutual respect, an understanding of each other's needs, and a will to reach common goals. If you wish to receive more information about any of our producers please email us at producers@eticafairtrade.com and we will be happy to share our information with you.
We work with the following organizations to research producer groups before we visit them:
- International Fair Trade Association (IFAT) based in The Netherlands.
- Fair Trade Labeling Organization (FLO) based in Bonn, Germany.
- Fair Trade Federation (FTF) based in Washington DC.
Etica is currently working on becoming a member of the Fair Trade Federation and is a founding member of the Minnesota Fair Trade Association. The Fair Trade Federation is currently auditing us to determine how we and our producers meet Fair Trade criteria as well as how we conduct Fair Trade business here in the US.
As soon as we hit our two-year anniversary (as are the rules), Etica will also apply for membership to the International Fair Trade Association.
We will share our results with you as soon as we hear back from organizations. Please visit our Fair Trade Links page to learn more about the various Fair Trade organizations that we work with.
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What does the Fair Trade label mean?
The Fair Trade Certified label is used by TransFair USA, www.transfairusa.org, the independent, non-profit auditor responsible for auditing Fair Trade agriculture products like tea, coffee and rice entering the US market.
This label guarantees that producers are given a better deal under the Fair Trade Labeling Organization's guidelines for agricultural products. Under the FLO system, 20 countries are now using Fair Trade Certified labels to distinguish commodity products from their non-Fair Trade counterparts.
Etica has just recently introduced Fair Trade wine to the US market. We are currently working with the TransFair USA to certify these wines for the US market. All of our wines are already certified under FLO in Europe and are being exported to several European countries under this system.
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Why are there no Fair Trade certified logos on crafts?
At the moment there are no labels or logos developed for Fair Trade handicrafts. There are however, two organizations that are responsible for auditing Fair Trade producers and companies that sell them. These are the Fair Trade Federation and the International Fair Trade Association.
Members of these organizations can display the logos in their stores, on
their websites and in their marketing materials.
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How is Etica wine fairly traded?
Like most small farmers around the world, grape farmers and workers in
developing countries are susceptible to low incomes that often do not cover
labor and production costs. The Fair Trade price guarantees livable wages
and covers production costs. The Fair Trade system allows farmers to become
more sheltered from the effects of suppressed, unpredictable, and distorted
world prices. The premium paid in addition to the guaranteed price allows
producers to invest in their own futures.
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How does Fair Trade tie into local, domestic agricultural issues?
Fair Trade is a way of life. Consumers can support local farms and promote global Fair Trade. The goal of Fair Trade is to develop sustainable lifestyles around the world. Buying local organic foods from small farmers is a huge benefit to our community. Etica supports local farmers and encourages people to shop at co-ops, farmers markets, while supporting community agriculture groups. Buying locally defends food sovereignty, saves fuel and energy, while providing the freshest food available.
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Where can I find more information about Fair Trade?
The Fair Trade Links page will send you to all the right places to learn more about Fair Trade. Click here to reach the Links.
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