Why Are Fair Trade Certifications Important?

Jhai Coffee Farmers Cooperative [Photo by Fair Trade Laos1] (CC BY-SA 3.0)

Fair Trade Certified Imports

Fair trade certified imports to the US increased dramatically last year, including a large increase in organic imports, expansion into popular new product categories, a surge in consumer demand and increased brand recognition for fair trade certified goods. While the world economy continued to be unstable in 2010, fair trade products bucked the trend with strong demand for fair trade and organic coffee being particularly notable.

This has resulted in $44 million in premium funds being paid to coffee farmers to date. It reflects the desire of socially conscious consumers to align their purchasing habits with their vales, and the money generated by this increased demand for fair trade products is being directly reinvested into farming businesses to build infrastructure and capacity. It is also benefiting farming communities with new schools, roads, health care and other development efforts.

Fair Trade Certifications in Africa

The demand for fair trade certified products has done much to benefit African communities, and this positive trend can continue if the infrastructure and institutions are in place to effectively capture and retain a fair share of the profits for African governments and local communities. A critical barrier to success for many African export-led businesses has been a lack of physical infrastructure and social captial, which made their goods less globally competitive.

Shop pelmets for the winter season [Photo by net_efekt] (CC BY-SA 3.0)

That’s why investing not just for short term profits, but rather in long term development of institutions and in wider society is so important. When consumers purchase fair trade certified products from Africa, they help to ensure that profits do not just flow out of the country, whether via transfer mispricing or into the tax haven accounts of super wealthy and corrupt interests.