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What is Fair Trade?

Fair trade is the solution to improving the lives of millions of farmers throughout the world. Many of them are in fact currently suffering in unfair trading systems which prevent them from living the lives which they deserve. Trade can only be fair once these barriers are lifted.

We have adopted six criteria for determining fair trade.

1. Establishing fair trade rules at local, national and international level

Fair trade is also synonymous with public awareness, education, publicity campaigns and action coupled with strategic, economic and political influence.

2. Contributing to a fair income for disadvantaged producers, particularly those in the south

Independent certification bodies determine the Fairtrade standards and the minimum Fairtrade price for a whole range of products. Oxfam-Wereldwinkels works in conjunction with three of them: FLOCERT, IMO Fair For Life and Ecocert CSR. For food products for which no Fairtrade standard (yet) exists, Oxfam-Wereldwinkels and the producers work to set a mutually agreed price.

  • The Minimum Fairtrade Price
    The minimum Fairtrade price takes account of the buyer’s purchasing power, the nature of the work and the effort required. It will vary depending on the country, region and quality of the product and is intended as a guide only. In practice, fair trade organizations will negotiate the price with the producer. They will follow it to the letter and will sometimes pay more, particularly if the market price is higher than the minimum Fairtrade price.
  • Fairtrade Bonus
    On top of a minimum price, Oxfam-Wereldwinkels pays a bonus which is intended to encourage the social and economic development of the community as a whole. The group of producers makes a democratic decision on how to use this bonus. It is usually used to build schools, clinics and warehouses and to improve roads or to organise training for its members.
  • A Fair Income
    Oxfam-Wereldwinkels offers producers the opportunity to earn a fair income: one which covers the costs of production and which will also cover the cost of housing, food, clothing, education and medical care. Often producers may only sell a very small proportion of their produce at fair trade prices, which consequently only covers a part of their household income. Therefore fair trade can not always guarantee a fair income, but the more fair trade products producers can sell, the higher their income will be.
3. The most direct possible purchase with maximum transparency

We raise public awareness on unequal trading relationships around the world. We encourage those critical of this and who opt for solidarity and respect to think in ways that go against the grain. We put pressure on politicians and businesses to encourage them to adopt policies which will benefit disadvantaged groups of produces, particularly in the south.

Oxfam-Wereldwinkels purchases part of its products directly from producer organisations. Often the purchasing and/or export of goods is done via an “intermediary”. This could be an organisation which represents and supports different producer groups (e.g. Del Campo in Nacaragua) or a “socially responsible business” (e.g. a factory) which purchases raw materials from local producer groups and then processes them into exportable products (tea, for example).

Purchasing can sometimes be done via other (European) fair trade organizations with which Oxfam-Wereldwinkels works. We are already working with certain organisations affiliated with international umbrella groups such as IFAT, FLO or EFTA. They guarantee the purchasing is done by the minimum possible number of intermediaries and in accordance with fair trade principles.

4. Choosing to develop the capacity of disadvantaged producers

Oxfam-Wereldwinkels supports trading relationships with groups of disadvantaged or poor producers in the south. The adoption of measures aimed at increasing the power and skills of these producers is termed "capacity development".

In other words, Oxfam offers solutions and advice in the form of:

  • investment credit or bridging loans;
  • advances;
  • training schemes;
  • product development;
  • quality improvement.

Support and advice are directly given to:

  • poor or disadvantaged producers which are working within democratic organisations (cooperatives);
  • producers working with socially responsible businesses to market their products so that they can have an impact on regional development.
5. Respecting humans and the environment

Oxfam-Wereldwinkels only buys products from producers who work under humane conditions, in accordance with International Labour Organization (ILO) standards regarding health, employment rights, equality, child labour, etc. in the workplace.

Oxfam-Wereldwinkels also pays particular attention to sustainable, environmentally-responsible development. We manage natural resources responsibly. We use low-energy-consumption production methods. We aim to use environmentally friendly transport and take an effective and sustainable approach to waste processing and packaging.

6. Sustainable partnerships

Fair trade is not about just one purchase. Oxfam-Wereldwinkels offers producers structured access to the market and guarantees them the forging of a long-term relationship. Produces can then plan ahead, expand their expertise, improve their position on the market and develop their business in a sustainable manner.