--- title: Fair Trade | What Is It & How Does It Benefit Farmers and Consumers? description: Fair Trade is a movement that aims to help farmers and consumers. Learn about its benefits to farmers and consumers and the easy ways you can support it. image: https://www.carboncollectiveinvesting.com/hubfs/Fair_Trade.png --- [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo-white.4f6047d4.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) [![Carbon collective](https://www.carboncollectiveinvesting.com/hubfs/raw_assets/public/CarbonCollective_August2021%20copy/images/carbon-collective-green-investing-logo.53b28bee.svg "Carbon collective")](https://www.carboncollectiveinvesting.com/) - About - Employers - [Sustainable 401(k)](https://www.carboncollectiveinvesting.com/401k) - [401(k) Comparison Tool](https://www.carboncollectiveinvesting.com/401k/plan-comparison-tool) - Individuals - [FAQ](https://www.carboncollective.co/en/knowledge/faqs) - [ETF](https://www.carboncollectivefunds.com/) - Learn - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing) - [Investing Basics](https://www.carboncollective.co/sustainable-investing/investing-basics) - [Blog](https://blog.carboncollective.co/) - [Tools](https://tools.carboncollective.co/calculator/) - Log in - [Carbon Collective](https://app.carboncollective.co) - [Altruist](https://app.altruist.com) [Talk to a human](https://ask.carboncollective.co/f4o5dylkg) [Sign up](https://app.carboncollective.co/sign-up) [Log In](http://app.carboncollective.co/) **[Home](https://www.carboncollectiveinvesting.com/) > [Sustainable Investing](https://www.carboncollectiveinvesting.com/sustainable-investing) >** Fair Trade # Fair Trade ![](https://www.carboncollectiveinvesting.com/hubfs/zach-stein.jpeg) Written by Zach Stein | Reviewed by [Subject Matter Experts](https://www.carboncollectiveinvesting.com/subject-matter-experts) Updated on October 1, 2024 Fact Checked Why Trust Carbon Collective? ### Table of Contents ## **What Is Fair Trade?** The term “fair trade” describes several different business models and social initiatives that aim to promote more equitable and sustainable trading relationships between producers in developing countries and consumers in developed countries. ## **The History of Fair Trade** The fair trade movement began in the 1940s when [European NGOs](https://ec.europa.eu/social/main.jsp?langId=en&catId=330) started working with artisans in developing countries to help sell their products on international markets. In the 1950s and 1960s, fair trade mainly focused on commodities such as coffee, tea, and chocolate. In the 1970s, the movement expanded to include other products, such as handicrafts, clothing, and wine. ## **How Does Fair Trade Work?** Under the fair trade model, farmers and workers in developing countries are paid a fair price for their products. This Fairtrade Minimum Price covers the cost of [sustainable production](https://www.epa.gov/sustainability/sustainable-manufacturing#:~:text=Sustainable%20manufacturing%20is%20the%20creation,employee%2C%20community%20and%20product%20safety.) and ensures that farmers can make a decent living. In addition, farmers and workers receive a Fairtrade Premium that they can use to invest in their businesses or communities. ## **Principles of Fair Trade** Fair trade is built on core principles emphasizing the need for greater justice and equity in global trade. These principles include: ![Principles_of_Fair_Trade](https://www.carboncollectiveinvesting.com/hs-fs/hubfs/Principles_of_Fair_Trade.png?width=1920&height=1080&name=Principles_of_Fair_Trade.png) - Respect for workers’ rights, including the right to organize and bargain collectively. - Payment of a fair price that covers the costs of sustainable production. - Provision of decent working conditions. - Gender equity and empowerment of women. - Support for small-scale producers. - Promotion of fair trade certified products. - Transparency and accountability in business practices. - Respect for the environment. ## **The Benefits of Fair Trade for Farmers** Fair trade helps to break the cycle of poverty and exploitation that many small-scale producers face by providing farmers with a fair price for their products. In addition, the [Fairtrade Premium](https://www.fairtrade.org.uk/what-is-fairtrade/what-fairtrade-does/fairtrade-premium/) allows farmers and workers to invest in their businesses or communities. This can lead to improved working conditions, higher incomes, and better living standards. ## **The Benefits of Fair Trade for Consumers** Consumers who buy fair trade products support farmers and workers in developing countries who are treated fairly. In addition, by choosing fair trade products, consumers can help to create a more sustainable and equitable global food system. ## **How Fair Trade Helps to Improve the Lives of People in Developing Countries** Fair trade is one way to help address the problems of poverty and exploitation faced by many small-scale farmers and workers in developing countries. By ensuring that these producers are paid a fair price for their products, fair trade helps to empower them and improve their lives. ## **How to Support Fair Trade Every Day** There are many ways that consumers can support fair trade. One way is to buy fair trade certified products. This certification guarantees that farmers and workers have been paid a fair price for their products. Another way to support fair trade is to look for products that are made with sustainable and ethically-sourced ingredients. Finally, consumers can also support fair trade by spreading the word about the benefits of this business model. ## **The Bottom Line** Fair trade is an alternative to conventional trading that emphasizes the need for greater justice and equity in global trade. Fair trade is built on core principles that include respect for workers’ rights, payment of a fair price, and support for small-scale producers. The fair trade movement began in the 1940s when European NGOs started working with farmers in developing countries to sell their products on international markets. The benefits of fair trade for farmers include a fair price for their products and the opportunity to invest in their businesses or communities. The benefits of fair trade for consumers include supporting farmers and workers in developing countries who are treated fairly and helping to create a more sustainable and equitable global food system. ## **FAQs** ### **1. What is fair trade?** Fair trade is an alternative to conventional trading that emphasizes the need for greater justice and equity in global trade. ### **2. What are the principles of fair trade?** The principles of fair trade include respect for workers’ rights, payment of a fair price, provision of decent working conditions, gender equity, support for small-scale producers, and promotion of fair trade certified products. ### **3. What are the benefits of fair trade for farmers?** The benefits of fair trade for farmers include a fair price for their products and the opportunity to invest in their businesses or communities. ### **4. What are the benefits of fair trade for consumers?** The benefits of fair trade for consumers include supporting farmers and workers in developing countries who are being treated fairly and helping to create a more sustainable and equitable global food system. ### **5. How can consumers support fair trade?** There are many ways that consumers can support fair trade, including buying fair trade certified products, looking for products made with sustainable and ethically-sourced ingredients, and spreading the word about the benefits of this business model. ### Related Topics - [Sustainable Investing](https://www.carboncollective.co/sustainable-investing/) - [Carbon Footprint](https://www.carboncollective.co/sustainable-investing/carbon-footprint) - [Energy Efficiency](https://www.carboncollective.co/sustainable-investing/energy-efficiency) - [Greenhouse Gases](https://www.carboncollective.co/sustainable-investing/greenhouse-gases) - [Net Zero](https://www.carboncollective.co/sustainable-investing/net-zero) - [Renewable Energy Sources](https://www.carboncollective.co/sustainable-investing/renewable-energy-sources) - [Sustainable Development Goals (SDGs)](https://www.carboncollective.co/sustainable-investing/sustainable-development-goals-sdgs) ![Attend Our Next Webinar](https://www.carboncollectiveinvesting.com/hubfs/carbon-collective-green-investing-icon-webinar.12af7b6e.svg) ### Attend Our Next Webinar Join our next Sustainable Investing 101 webinar, get our favorite DIY options, and walk through how we build our portfolios. 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