Fair Trade - Definition, Advantages & Disadvantages

What is fair trade?

Fair trade means that the producer gets a guaranteed, fair minimum price for his produce. Fair trade also sets minimum standards for the pay and condition of workers.

Advantages of fair trade

• Provides producers with a fair price
• Ensures workers get a fair wage
• Ensures workers get reasonable working conditions
• There are no arguments over price
• Workers can secure a better future for themselves and their families
• It benefits the producers and the manufacturers
• It creates jobs for local people
• It could increase sales because customer like to feel they are helping those less fortunate than themselves.

Disadvantages of fair trade

• The product is usually a higher price than a non fair trade product - the customer pays more
  
• The product may be a lower quality
• The non fair trade workers get paid less and have worst conditions
• The profits the producer makes may not be reinvested in the workers or local community