Fair Trade: Understanding the Organizations and Labels

Fair trade may be a movement to support farmers and laborers in achieving better trade conditions, but it’s also a system of organizations that label products and certify producers.

Because there isn’t a single entity that manages the production of fair trade goods on the consumer market, there are multiple labels. By learning more about fair trade cooperatives and nonprofits, you’ll understand what’s behind each label and whether you care to choose one over another.

All fair trade organizations have the overarching mission of ensuring farmers, laborers and artisans can receive fair wages, market prices and trade conditions for the goods they produce.

Some of these nonprofits and cooperatives issue certifications to producers and brands who have proven they are facilitating just labor practices and adequate conditions for workers and artisans. Certified brands can leverage fair trade labels to attract consumers who value ethical and sustainable production — and also don’t mind paying a little extra.

The fair trade industry covers a growing range of products, but the most common ones are coffee and chocolate. These two are the ones you’ll most likely see at the supermarket. Leaders in the movement also tend to focus on other foods and consumer products, such as bananas, tea, cotton and clothing.

The qualities that separate these organizations and fair trade labels are their legal statuses, organizational structures, histories, values, priorities and market shares. There are also subtle differences in what each considers fair trade.

Here are the major players:

Equal Exchange

Equal Exchange is an alternative trade organization that sells fair trade products under the Equal Exchange brand. Unlike the other entries in this list, Equal Exchange is not a fair trade certification body. Nonetheless, their label and business are prominent in the fair trade movement.

The Equal Exchange team is the most dedicated to the cooperative structure that has defined the fair trade movement. Their co-op has more than 120 workers who are entitled to an equal stake and vote in the business. A vote from an executive director or board member is worth the same as one from a lower-level employee or farmer partner. Equal Exchange claims it is a “democratic worker co-operative,” meaning its workers are also owners and managers.

The co-op specializes in standard fair trade staples such as coffee, chocolate and bananas, but their team also focuses on the avocado industry. Equal Exchange products are not available in many major stores or chains, but they do have an online shop.

Fairtrade International

Fairtrade International is the oldest and largest fair trade organization in the world. In 2004 it split into two independent entities: Fairtrade Labeling Organizations International [FLO] and FLOCERT, a certification body that helps companies implement and follow fair trade standards. Fairtrade International is the abbreviated version of FLO and has been the official name of the organization since 2011.

In 2013 the organization amended its constitution to give farmers and workers more voting power to influence the direction of the movement. This decision reflected their commitment to promoting cooperative principles and the power of helping farmers and workers organize.

Today the federation has many member countries involved with labeling initiatives, spanning across Europe, North America, Japan and Australia, while also including networks of producer organizations from Asia, Latin America, Africa and beyond. The organization is recognized by ISEAL Alliance, a global association that sets sustainability standards, and is also a part of the Fairtrade System.

One of the key members in FLO International is the Fairtrade Foundation, a UK-based independent nonprofit. The Fairtrade Foundation licenses the use of the Fairtrade mark in the United Kingdom, empowers producers and raises awareness about how Fairtrade standards enable trade practices that are more equitable.

Fairtrade International manages a wide range of products, everything from bananas and chocolate to gold and wine. In the U.S. their chocolate-related work has been especially impactful. Ben and Jerry’s, for example, works with Fairtrade International to source and certify many of their core ingredients.

Fair Trade USA

After more than a decade of working with fair trade farmers, Paul Rice launched Fair Trade USA in 1998. The organization was an affiliate of Fair Trade International but left the federation in 2012, leading to the establishment of Fairtrade America.

According to Fair Trade USA representatives, the nonprofit became independent because its leaders believed abandoning the cooperative structure was necessary to scale business and ultimately help more farmers. The change allowed Fair Trade USA to collaborate with large farm owners and plantations.

Other fair trade organizations criticized this move because they believed the new business opportunities betrayed the fair trade principles of working with small farmers, limiting commercialization and relying on cooperatives for worker empowerment. Prominent voices in the movement worried that workers associated with Fair Trade USA would be more likely to face abuse or be denied a fair living wage.

Regardless of moral debates, it’s clear the strategy allowed the nonprofit to expand in different markets, work with more farmers and serve a higher number of consumers. Fair Trade USA developed its own certification standards and trademarked “Fair Trade Certified,” which is now the most common fair trade label in America.

Fair Trade USA doesn’t cover as many categories as Fairtrade International. Unlike Fairtrade International and Equal Exchange, however, Fair Trade USA does focus on the clothing market. Their brand partners include large apparel companies such as Patagonia and REI.

The expansion seems to have made fair trade products more accessible and affordable across the country. Goods that were once limited to local markets and expensive grocers are now distributed in Walmart, Kroger and Publix, among many other retailers. For years many consumers perceived the fair trade movement as being primarily for white middle or upper-class consumers in cities, but that image is changing.

World Fair Trade Organization

Founded in 1989, the World Fair Trade Organization [WFTO] describes itself as a global community of “Fair Trade Enterprises.” In collaboration with Fairtrade International, WFTO created the International Fair Trade Charter in 2018. Roughly 74% of the workers, farmers and artisans associated with WFTO are women, and the majority of WFTO member leadership is female.

To feature the WFTO label on their products, companies must pass a “Guarantee System” that includes the Fair Trade Accountability Watch [FTAW]. The certified labels are “Guaranteed Fair Trade” and “Guaranteed Fair Trade Origin.”

In addition to the usual fair trade categories of food, clothing and beverages, WFTO works with brands on “Alternative Tourism.” The organization is based in the Netherlands, and their labels are more common outside the U.S.

Fair for Life

Unlike many other fair trade certification systems, Fair for Life [FFL] certifies a wider range of goods, including food, non-food and raw materials. Another major difference is that this certifier covers every step of the production process, rather than just slapping certification on the final product.

Fair for Life also gives approval to entire companies, a rather rare honor that highlights producers that promote transparency and adheres to sustainable and eco-friendly business practices. This certifier has excluded brands with a bad record of child labor, unjust working conditions and environmental exploitation.

The stringent standards set forth by Fair for Life promote organic trade practices, clarity regarding all ingredients, and long-term commitment from buyers. The certifier also guarantees prices over the market average and directly supports price negotiations for producers.

Does It Matter Which Organization You Support?

All of these organizations deserve support because they have a strong record of helping farmers and workers improve their quality of life and trade conditions. Depending on your values and preferences, however, there might be a specific one you’re more comfortable with.

Equal Exchange, Fairtrade International, WFTO and Fair for Life tend to appeal to fair trade purists. Fair Trade USA was once plagued with controversy, but it’s up to you to decide whether those criticisms are valid.

Fairtrade International and Fair Trade USA seem to have comparable prices. Equal Exchange is significantly cheaper, but they don’t offer many products.

The quality of the goods is subjective. It depends on which brands, farms and manufacturers you like.

No matter which organization you support, the ethical and sustainable choice is to buy fair trade when possible. At Public Goods, we collaborate with Fair Trade USA and Fairtrade International. If you haven’t already, check out our fair trade coffee and tea!