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Each additional person in the supply chain adds on to the cost of the product, as that person expects a profit.
Since there is more of a direct link from consumer to producer in a Fair Trade scenario, costs are kept
comparable to non-Fair Trade goods, and more of the profit goes to the producer rather than to many
different people in the supply chain.
How is Fair Trade making a difference if the sales volume is so low compared to non-Fair Trade sales?
First, Fair Trade sales volume is not low: retail sales of Fair Trade items passed $1.1 billion in the U.S. in 2009.
That has generated additional income paid to producers, beyond normal market rates, of $48 million.
Further, for a Peruvian weaving cooperative making only a few hundred dollars a year, a $1,000 craft sale to
a Fair Trade Organization is a significant increase in income. In some parts of the world, Fair Trade earnings
are turned over to the community to improve quality of life. The money may fund a potable water system or
provide health education or bring an adult literacy program to the community. Keep in mind, there is a much
more direct link from consumer to producer in Fair Trade, and so the producers benefit that much more
from each incremental increase in revenue.
Fair Trade organizations such as us jaipurhandloom.com thrives more by supporting the people who live to
their art by promoting them to ventures where people appreciate their art and in return it supports their
family , we have developed a sustainable method by which we support atleast 30 women we freed from RED
light area , now they work out of sub urban area producing beautiful kanthas, tapestries and poufs
supporting their kids and family and living a graceful life. In evening as per Indian tradition they sing and
dance on popular bollywood songs.
What are cooperative workplaces, and why are they important to Fair Trade?
Cooperatives and producer associations provide a healthy alternative to large-scale manufacturing and
sweatshop conditions, where unprotected workers earn below minimum wage and most of the profits flow
to foreign investors and local elites who have little interest in ensuring the long term health of the
communities in which they work.
Fair Trade Organizations work primarily with small businesses, worker-owned and democratically run
cooperatives and associations which bring significant benefits to workers and their communities.
By banding together, workers are able to access credit, reduce raw material costs and establish higher and
more just prices for their products. Workers earn a greater return on their labor, and profits are distributed
more equitably and often reinvested in community projects such as health clinics, child care, education, and
literacy training.
Workers learn important leadership and organizing skills, enabling self-reliant grassroots-driven
development.
changing trends, which ultimately helps the producer communities to become more economically
sustainable.