What is Fair Trade?

Fair Trade, or alternative trade, refers to the exchange of goods based on principles of economic and social justice. The key objectives of Fair Trade are to empower low-income artisans and farmers around the globe to better their conditions, and to promote understanding between them and people of developed regions. Alternative traders who are members of the Fair Trade Federation pledge to:

  • Pay a fair wage in the local context.
  • Provide equal opportunities for all people.
  • Engage in environmentally sustainable practices.
  • Build long-term trade relationships.
  • Provide healthy and safe working conditions.
  • Provide financial and technical assistance to workers whenever possible.


While a "fair" price is often difficult to determine, Fair Trade advocates generally agree that the producer should earn enough not only to cover material and labor costs, but also improve the standard of living for the producer's family, cooperative and community.

FTOs and ATOs can be either for-profits or not-for-profits, wholesale or retail. They work with producers to provide markets for farm products, textiles and handcrafts in developed nations. Because Fair Traders reduce the number of often-exploitative middlemen and keep overhead low, they typically return one-quarter to one-third of the retail price of items to artisans. A portion of that return may take the form of job training, technical assistance, health care, access to loans and grants, and/or dividends.

Fair Trade producers use their income primarily to feed, clothe, shelter, educate and provide health care for their families. Fair Trade relationships also provide producers with access to training and technical assistance; loans to buy land, livestock and materials; ownership of the means of production; and respect for their cultural traditions and native environments. Fair Trade income allows villagers to remain in the countryside to earn a living, rather than migrate to overcrowded, disease-ridden urban areas.

Consumers who patronize Fair Trade businesses enjoy their own benefits: access to high-quality crafts and agricultural products; a venue for sharing one's values with friends and relatives through conscious gift giving; an engaging way to learn how people of other cultures live and work; and an opportunity to befriend and empower individuals one otherwise might overlook.

Fair Trade provides an easy-to-access, life-affirming forum for softening the stereotypes and distrust that too often divide people, leading to hate and violence.