fair trade - how does it work?

You’ve probably all seen these labels on products in the grocery store and in specialty markets:  Fair Trade, Fair for Life, World Fair Trade, Fair Trade Federation.  What they have in common is a focus on the worker with the aim to promote equitable trade. It seeks to help producers in developing countries and covers coffee, cocoa, tea, wine, sugar, bananas, flowers and even handicrafts. It has 4 key goals:

  • To pay farmers a decent, living wage.
  • To create direct trade links to farmers, bypassing exploitative middlemen.
  • To provide access to affordable credit.
  • To promote sustainable practices, such as organic farming, that help protect the environment.

In the tea industry, Makaibari Tea Estate was used as a model in the early 1990s to test and develop fair trade principles that would lend themselves to larger estates and companies.  Small shareholder models were not suitable for tea plantations with vast acreage and often vertical integration.  Makaibari was the first to be certified Fair Trade in 1993.


How does Fair Trade work?

Tea producers meet specific criteria to be considered a Fair Trade co-operative or estate.  Importers/Buyers pay a certain premium over the market value which is then channeled back to the workers of the co-operative/estate.  A Joint Body of workers decides how to spend the funds.  This means that every time you purchase a Fair Trade tea, a portion of that price goes back directly to the workers of that tea estate.

Some of the specific standards that Tea producers must meet are:

  • Wages that meet or exceed legally established minimums
  • Absence of forced or child labor
  • Freedom of association and organization
  • Safe working conditions, including protection from exposure to harmful agrochemicals
  • Adherence to national and international labor protections, including those established by the ILO of the United Nations and, in India, the Plantation labor Act.

Tea workers have the capacity to improve their own lives through Fair Trade.  Here are some ways in which workers have chosen to use the Fair Trade contributions:





An active Joint Body works diligently at Makaibari.  It represents the 7 villages of Makaibari and consists of 16 representatives, 6 men and 10 women.  A member representing the Network of Asian Pacific Producers (NAPP) is also present.  This is currently held by Mrs. Meena Tamang.  The Manager of the Tea Estate, Mr. Sanjay Das and Satyadeep Gurung, Fair Trade Officer also attend all meetings to facilitate decision making and prioritization of agenda items.

The Joint Body meets around the 15th of each month.  Meetings last 1 – 2 hours and are held on working days. Representatives are elected members from each samaj (village group) and they collectively make decisions on projects and plans.  Some of their recent accomplishments include:






Prior projects at Makaibari have included the establishment of a Learning Centre, a thriving micro-loan program and reforestation programs.

At Korakundah Estate in the Nilgiri region, typhoid and hepatitis B vaccines have been procured, cooking gas provided for workers and computers bought for the local school.

In Hubei province, farmers producing our China Green Dew have used their funds for investment in rural infrastructure, a new regional hospital and grants for hundreds of impoverished farming children to attend primary school.

The Fair Trade movement also has many critics.  The chief complaint is that the administrative bodies seem to focus more on producer certification and less on the actual benefits to the workers.  The various bodies are fractured and often work at cross purposes and leave the producers and importers confused as to which policies to follow.  Producers complain about the increased regulatory burden it puts on them for additional certification.  The critical task of ensuring that premiums are, in fact, channeled back to the workers of each estate is often handled haphazardly. Despite these complaints, often legitimate, Fair Trade has gained momentum and, for the most part, it bestows an added financial benefit to workers to improve their quality of life beyond the basics.  Some importers have circumvented this system and have elected for direct trade rather than fair trade.  This allows them to have a one-on-one relationship with the producer. They can then ensure that their dollars directly benefit workers and that they do not get lost in banking minutiae, additional fees, theft or misappropriation.

Despite this criticism, the Fair Trade movement has enhanced the well-being of thousands of farmers and villages in the tea industry worldwide.  We have personally visited newly built schools and clinics funded by Fair Trade and seen the hard lives of women greatly improved through zero-interest loans and grants for social and community projects.  We transfer the funds directly into the bank accounts of various Fair Trade Joint Bodies in several countries so we can attest to the actual receipt of the funds by the workers.  


Your purchase of any Fair Trade tea directly contributes to the well-being of a tea worker so keep selecting Fair Trade teas on our site.  They are clearly labelled by the icon.  It is an easy way of making the right choice. 




Amjadkhan Pathan November 18, 2018

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