What goes into the price of what you pay?

Costs in country of origin

Raw materials
Producers’ labour
Transportation from place produced to port
Protective packaging
Import taxes and duty.
Permits
Customs documents

Costs in Country sold

Transportation from port of origin to warehouse.
Transportation from warehouse to retail outlet.
Import taxes and duty.
Customs documents.
Packaging, labelling
Rent of retail location.
Rent for warehouse space.
Cost of broken items.
Cost of stolen items
Wages to staff.
Marketing costs.
Administrative costs eg/ accounting
Business taxes.

Is fair trade really possible in a for profit business?

Fair trade is certainly possible in the for profit realm but it requires the operation to be extremely efficient.

By working directly with the producers, fair trade operations can cut out many unnecessary additional costs such as transportation and profit required by middlemen. This means that the producer can be paid more while keeping within a reasonable price range for the consumer.

When your dollar is worth as much as your vote...

Fair trade is slowly becoming more and more formalised. There are standards established for consumable goods such as tea and coffee. IFAT is currently working on draft document of “Standards for Fair Trading Organisations” which will be presented at the 2002 AGM. What can you do to keep the momentum moving?

Ideally we would all shop at stores that identify themselves with the fair trade movement. Unfortunately, we usually have needs beyond tea, coffee and handicrafts. What products do you purchase on a regular basis that are not produced in Canada? Think about the costs incurred when importing them. Do you think that this could have been a fairly traded product?

Would you mind paying $10 for the T-shirt you bought for $5 if you would know that it was fairly traded? Would you still buy a laundry basket for $60 knowing that it was fairly traded or would you go to the big box store and buy one for $50?
If enough customers vote with their dollar, large retailers will listen...eventually.

We as consumers can also educate retailers about the other aspects of fair trade. Perhaps a retailer who is unwilling to pay more for the items they purchase may be willing to look at the other aspects such as working with their producers more closely rather than jumping from supplier to supplier? Small steps can lead to big change.

According to the international federation of alternative traders (IFAT) fair trade is better than aid. It builds a sustainable future on producers’ own abilities. with the main objective being to improve the producers’ quality of life. Several aspects of fair trade include:

*Producers receive a fair price for their goods and advances on orders.
*ATOs work with producers to provide quality products
*Purchase and marketing of producers’ goods are conducted according to high ethical standards; continuity of orders is important
*Sources, production and workplaces do not exploit people or the invironment.
*Products have meaning above their tangible attributes; consumers are informed about the people who make the products they purchase, increasing their loyalty and understanding that their purchasing power makes a difference
*Cultural exchanges between people in the South and people in the North are encouraged.