Fair trade is a method of ensuring that farmers and organizations get a reasonable price for their product and that workers earn a reasonable wage and have decent working conditions. The system works by giving producers and middlemen a certification mark after they pass an inspection by fair trade officials. A consumer can recognize this mark in the shop and be assured that the item was produced to a certain standard. The fair trade system covers a wide range of food and nonfood items, including cotton.
To get fair trade cotton certification, farmers need to ensure the workers are paid reasonably, have good health and safety standards, have the right to belong to a union, and have adequate accommodation if required. A farmer must also monitor and improve the impact of the farming process on the environment if necessary, not use genetically modified organisms, and handle chemicals safely. A cooperative of many farms needs to have a democratic management system. A company called FLO-CERT, which is a branch of Fairtrade International, checks these standards before awarding the fair trade certification.
More than 70 countries grow cotton, and about 100 million households earn money from the plant. The market price for cotton is affected by the popularity of synthetic fabrics and by the fact that certain countries such as the United States subsidize cotton producers so their cotton is sometimes sold at below production cost. This means that cotton from other countries needs to be sold at lower prices, which sometimes does not cover the cost of production.
Developing countries can produce cotton cheaply as wages are low. The pressures of very cheap competing cotton from subsidized farmers and the generally low price of the fiber can also mean that farmers may earn very little from the harvest and may even lose money. Fair trade cotton producers are guaranteed a reasonable price from buyers as long as they stick to the standards set by the fair trade organization. As well as the guaranteed price, farmers receive a Fairtrade premium, which is used to improve the community's living, education, or business conditions.
Fair trade cotton can be bought and sold directly to the public by fair trade organizations. Regular clothing producers can also buy the cotton and make clothes for shops that do not specialize in fair trade products. Fair trade cotton that is also organic commands a higher price than regular fair trade cotton.
The higher prices paid to farmers, workers, and trade organizations for fair trade cotton can make fair trade clothing more expensive, but it also ensures that people involved in cotton production earn more than they otherwise would. Workers can use the extra money for housing, food, or education. Farmers can also expand their businesses to make more profit while at the same time respecting the environment and worker's rights.
