Facts About Fair Trade

What is TransFair Canada?

TransFair Canada (TFC) is the Canadian affiliate of Fairtrade Labeling Organizations International (FLO). It is a not-for- profit company. Its members include major Canadian churches, trade unions and such non-governmental organizations (NGOs) as Oxfam-Canada, and World Vision. FLO is a growing world-wide movement working for the fairer trade of products in global markets.

What is TransFair Canada committed to?

TransFair Canada supports the alleviation of poverty in Southern countries by expanding sales of certified fair trade coffee and tea in Canada. The goal is to have sales of one million kilograms of coffee sold in the Canadian coffee market under a fair trade license by year-end 2001. TFC is working to show coffee importers and retailers in Canada that they can do good business by doing good. It wants them to offer coffee that's more fairly traded and expand this "niche market." It wants Canadian consumers to have more choice. TransFair Canada is about rewarding the coffee industry by helping it grow, not about punishing it for today's wrongs. It promotes a 'buycott' not a boycott.

How does TransFair Canada work?

TFC is an independent certifier and monitor. It licenses the TransFair logo to Canadian Roasters for a fee. When Canadians buying coffee see it, they know they're improving life for coffee farmers in the developing world, and for their families and communities. TFC licensees buy from importers who pay a fair price and deal directly with the democratic co-ops, which the small farmers began forming in the 1980s. There are now over 300 coffee co-ops on FLO's international register of producers in Latin America, South America, Africa, and Asia.

How is today's coffee trade unfair?

Of the 25 million coffee producers in 70 countries, over one third are small farmers. Typically, each has only two to five acres of land. Since each coffee bush provides only a pound of coffee per year, the farmers must tend thousands. They are at the bottom of a long food chain from farm to supermarket and local cafe. Usually they get no more than 10% of the retail price. This means earning as little as $5 a day. Unable to export directly, they turn to dealing with mid-level traders or "coyotes," as they're called in Latin America. With their monopoly coyotes force farmers to sell low and as lenders, coyotes charge extremely high interest.

How does fair trade benefit farmers?

1. Guaranteed minimum price of US $1.26 per pound, which covers the cost of production and basic living costs. If the world price is higher than $1.26, importers pay a premium of US$0.05/lb more.
2. Direct trade/reduced reliance on the middlemen.
3. Pre-financing by the importer to the producer if requested, which helps avoid debt traps.
4. Long term contracts: So producers can invest in social and ecological development projects such as organic or shade grown coffee which is healthier for the environment, workers and consumers, produces higher quality beans, and allows families to inter-plant fruit trees and vegetables at the same time. Under fair trade, consumers pay a more 'realistic cost, which acknowledges the farmers' basic human rights, environmental concerns, and sustainability in return for quality coffee. Through the skills learned from direct fair trade, farmers know the value of their coffee and capture a higher percent of the world price even on their conventional market sales.

To learn more follow this link to the TransFair Canada website.