Enable producers and artisans in poor countries to earn a fair price for their work. More justice and sustainability in trade and business.
Cut-price clothes and food are often produced by exploiting unprivileged people in developing countries. They work long hours for low pay, often in appalling conditions to produce cheap goods. How is it possible? Because of the free trade policy followed by some international markets in which countries’ governments do not restrict imports from, or exports, to other countries. Therefore, it makes sense for a business – whose only goal is the profit – to produce its goods where the labor cost is the cheapest. It works because these businesses are powerful, and because the consumer doesn’t see how his/her goods are produced.
Fair trade sourcing
Businesses collect, process, market and export farming products or handicraft produced by small farmers or artisans in the developing countries and pay a fair revenue for their work. They often provide advise on farming techniques or product designs to help them increase productivity, efficiency and improve their working contitions.
- Fair Trade Certified (For profit – coffee, chocolate, sugar, fruit juices, impacted 1,6 million farmers and workers)
- Alter Eco (For profit – coffee, rice, olive oil, 24,500 farmers)
- Fairtrasa (For profit – fruit, 9,000 farmers)
- Godson Export Commodities (Non profit – chia seeds, 6,500 farmers)
- Ben & Jerry’s (For profit – ice cream made with fair trade sugar, cocoa, vanilla, coffee and bananas, impacted 1,465 farmers for the coffee itself)
- LXMI (For profit – rare plants)
- Chuculat (Non profit – cacao)
Fair trade certifications / labels
The first fair trade certification to become widespread was Max Havelaar in 1988. These cooperatives’ mission is to inspect and certify that the farmers at the end of the supply chain are receiving a fair pay for their work.
The farmers / producers are stakeholders in the company. These social entreprises involve them in the whole value chain.
Instead of being disenfranchised from the process, now producers are intimately connected to each other and the products they create.
Direct distribution services
Connecting vendors (farmers) to buyers (distributors) to avoid multiple middle mans and transfer more money to the initial farmer or artisan, or to the pop and mom shop, by using smartphone technology or an online marketplace.
Sourcing raw materials from high-risk areas in a responsible way to improve the production practices and incomes of the communities most affected by conflict or poverty.
(instead of stopping sourcing from the region entirely to avoid being associated with harmful practices, delivering economic blow to local residents)
- Fairphone (100,000 Fairphone owners, smarphone made with “conflict-free” metals)
OTHER SOCIAL ENTERPRISES WITH SIMILAR VISION & MODEL
Sale of premium Swiss chocolate. Choba Choba has a unique business model : the cocoa farmers are shareholders of the company. They participate in the decision making and the benefits of the company. Also, 5% of the sales are allocated to the Revolution Fund and transferred to the communities in direct payouts and in the form of shares.read more
Sale of luxury jewelry, ethical fashion, offering high quality, contemporary design paired with handmade techniques and sustainable materials. Artisans retain 25-35% of revenue while industry standards is 2-3%. Virtual factory using mobile phones to coordinate over 1,300 independant artisans into a demand responsive manufacturing model. They receive purchase orders, manage inventory and delivery, and get paid directly on their mobile phone. A cloud system is matching demand with available capacity. This business model reduces waste, time and costs, offering a lower price to the consumer and higher wage to the producer. Soko sells to over 400 international resellers, and directly to 10.000 online consumers.read more