- / N2N / – Fairtrade-certified products have thankfully become commonplace in the UK. Globalization means that UK-based companies can look further afield for cheaper alternatives for their supply chain, but with the added reassuring knowledge that the workers involved in producing new products are also earning a fair wage.

In one of the most difficult economic years on record, consumers spent an estimated €3.4 Billion on official Fairtrade products in 2009 – a 15% increase over the previous year. Celebrities such as Chris Martin, Bono, Brad Pitt, Matt Damon and David Beckham have all shown their support and raised the profile of consumers buying products involved with fair trading. The boom in its popularity has obviously inspired a positive knock-on effect on supply chain management with a vast improvement in healthy working relationships.

What is fair-trade? Previously, workers in developing countries such as farmers, plantation workers and other producers received only a tiny fraction of the money generated by their crops or products. They also frequently face problems such as unstable prices and a lack of access to finance. The movement advocates the payment of a higher price to producers as well as social and environmental standards. However, it focuses in particular on exports from developing countries to developed countries, most notably handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate and flowers.

Only products that have been audited according to a strict set of specific criteria can carry the official “Fairtrade” mark. But business managers (especially those involved in Supply Chain Management) should be made fully aware of the importance of “fair trade” during the education process. The exact criteria vary between product categories, though all Fairtrade-certified traders must follow these basic guidelines:

* Pay a price that covers the cost of living
* Pay a premium that producers can invest in development
* Make partial advance payments, when requested by producers
* Sign contracts that allow for long-term planning and sustainable production practices.

The concept of fair trade should not be just restricted to developing countries. The supply chain (for any business) in the UK should be fair and be respectful to everyone involved, while not necessarily involving a governing body, but the concept should be instilled into the mindset of every business owner in the UK through basic business training.

In conclusion, using fair-trade will increase supply chain costs, but this can be countered by the positive PR which is generated by implementing a fair-trade policy.

Andrew Parker has written several articles for Qube relating to the advantages of Supply Chain Management NVQ qualifications.

Nation2Nation publishes articles of interest to professionals involved in Supply Chain Management, Logistics, Import Export, International Trade, Border Security, Transportation, Transportation Safety, Trucking, Railroad, Air Freight, Maritime and Cargo Management.  Contact Jeff Platts at contact@nation2nation.com.

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This post was submitted by Andrew Parker.

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