Fair Trade - fair to all

What is fair trade? Is it paying a fair price to disadvantaged producers in the developing world for their skill and work? Is it paying a fair market price in the developed world for goods or services you buy? or is the whole supply chain supposed to be fair?

I believe it is all of the above, fair trade should be fair right across the board to everyone involved in the supply chain, including those in the middle, like us, who are trying to manage those relationships.

However, the reality these days seems to be the middle people, those who are trying to raise awareness, lead the way in forging relationships between the producers and the retail customers who are being squeezed into unfair situations; I'll give you a couple of examples:-

Trying to do our bit for sustainable manufacture, I am always on the look out for more environmentally friendly or ethical raw materials and this week I went to meet with a producer with a new line in hemp bags. The bag designs were good, with little adjustment would fit in well with our direction towards western fashion and were well made. However, when it came to the price, I was forced to reject them. To make the minimum profit margins we need (and that's by no means excessive, my accountant would say not enough!), I would have to sell the hemp bags in the UK a higher price than many of the leather bags. As many people know, hemp is a wonderfully ethical fabric; sustainable, environmentally friendly and strong; however, in the UK, the perceived value of hemp is lower than leather. There is a market for hemp, but people are just not prepared to pay the price it needs to be within the fair trade supply chains.

A different 'squeeze' is presented by one of the IFAT producers I work with. Over the years, we have developed a strong relationship, but slowly every year the cost prices have been increasing disproportionately. I could be wrong, but there seems to be an attitude of 'they can afford it' without the understanding that people are not prepared to pay 'any price' for fair trade goods. I want to support these organisations, but it gets to a point where the products become uneconomical to buy and sell in the UK and Europe.

When I'm visiting developing countries, I am often viewed through 'dollar shaped glasses', it's totally understandable, in comparison we are rich, but there is absolutely no concept of the cost of living in the 'Western' world, all they see is us visiting their countries and spending money. I'm not sure if it is politically correct to say so, but it is often referred to as 'white tax'.

The current worldwide economic climate is pushing prices up everywhere, in Nepal fuel and food prices have risen and the normal way of doing things is to pass those costs directly onto customers. In the UK with the 'credit crunch' biting hard, customers are looking for ways of saving money, buying cheaper goods and economising on 'non-essential items' (which doesn't appear to include beer or wine and going out at the weekends), so those people in the middle get the squeeze.

There is definitely a need for trade to be fairer, in Nepal where I am right now, every day I am witness to the cripling poverty, exploitation, child labour and desperation. Fair trade make a huge difference and I am also lucky enough to witness the positive change to the lives of some of those in such a desperate situation that their families had been forced to sell their daughters to traffickers in order to survive. But undoubtedly, the hardest part of running a fair trade business is trying to manage these relationships at each end of the scale whilst maintaining a viable profit level in the middle.