Fairtrade Standards

Fairtrade Standards

When you find a product that carries the Fairtrade Mark, it means that it was produced and traded according to Fairtrade Standards and that every company involved in the making of this product (from the farm, up until the product is packed) is certified and audited every year to ensure compliance. Fairtrade Standards cover the three key areas of sustainability: social, environmental and economic.

The key objectives of Fairtrade Standards are to:

  • ensure that producers receive prices that cover their average costs of sustainable production;
  • provide an additional Fairtrade Development Premium that is invested in projects that enhance social, economic and environmental development;
  • facilitate long-term trading partnerships and enable greater producer control over the trading process;
  • set clear core and development criteria to ensure that the conditions of production and trade of all Fairtrade certified products are socially, economically fair and environmentally responsible.

Fairtrade Standards distinguish between core requirements, which producers must meet to be certified, and development requirements that encourage producers to continuously improve and to invest in the development of their organisations and their workers. This concept is developed for the target group of Fairtrade; disadvantaged producers and workers. It encourages sustainable, social, economic and environmental development of producers and their organisations.

Fairtrade Social Standards

All Fairtrade certified farms must comply with Fairtrade Social Standards. These are based on the labour standards set by the International Labour Organisation (ILO), and include:

  • no forced or child labour
  • health and safety measures
  • non-discriminatory policies
  • freedom of association and collective bargaining 
  • nationally agreed minimum wages
  • access to basic services

For small-scale producers, Fairtrade Standards require an organisational structure that allows access to democratic decision-making processes. The cooperative needs to be set up in a transparent way for its members, and must not discriminate any particular member or social group.

For commercial farms  / plantations, Fairtrade Standards require the company to bring social rights and security to its workers. Some of the core elements are: training opportunities, non discriminatory employment practices, no child labour, no forced labour, access to collective bargaining processes and freedom of association of the workforce, condition of employment exceeding legal minimum requirements, adequate occupational safety and health conditions and sufficient facilities for the workforce to manage the Fairtrade Premium.

Fairtrade Environmental Standards

All Fairtrade certified farms must comply with Fairtrade Environmental Standards. These include requirements for environmentally sound agricultural practices.

An overview of the progressive Fairtrade Environmental Standards

The focus areas are:

  • minimised and safe use of agrochemicals
  • proper and safe management of waste
  • maintenance of soil fertility and water resources
  • no use of genetically modified organisms (GMOs)

Fairtrade Standards do not include organic certification as part of its requirements. However, organic production is promoted and rewarded by higher Fairtrade Minimum Prices for organically grown products.

> Download our Fairtrade & Environment Q&A

Fairtrade Economic Standards

Fairtrade Standards require the buyers to pay a Fairtrade Minimum Price and a Fairtrade Development Premium to the producers. The Fairtrade Minimum Price aims to help producers cover the costs of sustainable production. The Fairtrade Development Premium is money for the producers or for the workers on a plantation to invest in improving the quality of their lives. Also, Fairtrade standards require buyers to give a financial advance on contracts, called pre-financing, if producers ask for it. This is to help producers to have access to capital and so overcome what can be one of the biggest obstacles to their development. This promotes entrepreneurship and can assist the economic development of entire rural communities.

The Fairtrade Minimum Price is a 'floor price' that is crucial for the livelihood and security of small-scale farmers. When world market prices crash, Fairtrade requires buyers to pay at least the Fairtrade Minimum Price or the market price, whichever is higher. This allows producers to always earn enough to cover the costs of sustainable production, and to enjoy decent living conditions.

Upon purchase of a Fairtrade certified commodity (and besides the minimum price) traders must pay a Fairtrade Development Premium (FDP). The FDP is a major empowerment tool as it allows small-scale farmers and farmworkers to invest in developing their businesses and their communities. Usually, smallholder farmers use the FDP to improve their farming methods, quality and outputs (e.g. buying tools or machines, pay for training on best farming practices, hire an agronomist), as well as to improve the lives of member farmers (e.g. hire teachers for the local school, buy books, set up healthcare or micro-finance systems). In the case of commercial farms, the Premium is paid into an account owned by the farm workers, who generally spend the money by investing in education programmes such as bursaries or skills development courses, or in infrastructure improvements such as building a créche in the community or putting electricity in their houses.

> For a list of current Fairtrade prices consult Fairtrade International's Pricing Database

Fairtrade certification

For information about Fairtrade certification and to download Fairtrade Standards visit our business section.