- Fair Trade Minimum Price: The system works to pay a price to producers that aims to cover the costs of sustainable production.
- Pre-Harvest Credit: The system is designed to encourage buyers to partially pay in advance when producers ask for it.
- Payment of a Fair Trade Premium: This is built into the system, where a given sum is paid over and above the base commodity price. This sum often goes to support:
- Social (health and education)
- Economic (improve productivity)
- Environment (reduce reliance on single commodities) conditions of the producing community
*** Important to note: As many projects funded by the premiums are communal, the broader community, outside the producer organization, often benefits from Fair Trade.
Fair and Safe Working Conditions:
- Positive working conditions: The system is committed to promoting independence and positive work conditions that meet and respect international conventions on labour standards
- Child Labour is strictly prohibited: Respect is maintained for the International Labour Organization (ILO) legislation on the employment of children, in addition to local laws and customs.
Stability and Guarantee:
- Ethical trade relations: The system works to sustain long term trade relationships that are founded on dialogue, trust and mutual respect and have a goal of continual improvement.
- Contracts: Buyers are encouraged to sign contracts that allow for long-term planning and sustainable production practices.
- Transparency and accountability: This is created and maintained in the market place through the auditing process.
- Traceability: Products are traceable through the supply chain.
- Fair relation: This is developed between smallholder groups and farmer organizations/ contracting company and individual farmer. This is based upon a direct relationship between producers and importers, which results in payment being made directly between buyer and seller, rather than through middle men
- Safeguarding of natural resources: This is vital for long-term trading relationships, which are a key objective in Fair Trade partnerships.
- Environmental responsibility: Support for sustainable environmental practices is given by rewarding and encouraging farming and production practices, such as:
- Integrated farm management systems which minimize pollutants, pesticides and herbicides
- Organic agriculture techniques
- Bans the use of most dangerous pesticides
- Creating opportunities for economically disadvantaged producers.
- Developing Fair trade relationships in which all act as partners.
- Capacity building with the producer organizations by investing in activities which strengthen the knowledge, abilities and skills of producers and producer groups, so they can effectively meet their mission and goals.
- Gender Equity: This means working with producer organizations to ensure women’s work is properly valued and equally rewarded.