What is Fairtrade?

After workshop 3 where we discussed about fairtrade, this subject really caught my interest. I would really love to find out what exactly is fairtrade. To compile what is fairtrade, I browse through the Fairtrade Foundation homepage again. Consumer can actually gain detailed information about fairtrade.

It is a non-profit independent organisation whose purpose is to alleviate poverty by creating opportunities for producers and workers who have been economically disadvantaged or marginalized by the conventional trading system. It is actually a tool for development that ensures disadvantages farmers and workers in developing countries get a better deal through the use of the international FAIRTRADE Mark.

Consumers are getting more and more supportive for Fairtrade products after getting to know what Fairtrade exactly is about and so there might be companies who are trying to mislead consumers that their products are actually Fairtrade product to increase their sales. In fact, for a product to display the Fairtrade Mark, it must meet international Fairtrade standards which are set by the international certification body Fairtrade Labelling Organisations International (FLO). These standards are agreed through a process of research and consultation with key participatants in the Fairtrade scheme, including producers themselves, traders, NGOs, academic institutions and labelling organisations such as the Fairtrade Foundation. Therefore, consumer can report misuse if they found out a product misuses a Fairtrade Mark or Fairtrade word. They can report it to the Fairtrade website (www.fairtrade.org.uk). Consumer can either submit it online, print it out and post it, with attached evidence to:

Attn: FAIRTRADE Mark Misuse Officer
Fairtrade Foundation
Ibex House
42-47 Minories
London
EC3N 1DY

Because it is a fairtrade product, there must of cos a minimun price that a buyer of a fairtrade product has to pay to a Producer Organisation for their product. According to the website, though the price is not fixed, but it should be seens as the lowest possible starting point for price negotiations between producer and purchaser. It is set at a level which ensures that Producer Organisations receive a price which covers the cost of sustainable production for their product. This means it also acts as a safety net for farmers at times when world markets fall below a sustainable level. However, when the market price is higer than the Fairtrade minimum, the buyer must pay the market price. Producers and traders can also negotiate a higher price, for example on basis of quality, and for some products, FLO also sets different prices for organic crops, or for particular grades of produce.
But what I am thinking here is, the lowest possible starting price is for the producer and purchaser to negotiate, will there be any possibility that a purchaser only purchase products from producer who offer the lowest minimum price? Because, every producer has a different minimum cost to sustain their production, and so, will this put other producer who has a slightly higher minimum cost in hazard by unable to offer the lowest minimum price?

I am really interested in this area of topic, and so I will do more research on it. I hope that my fellow coursemate could assist me in this by giving me some comment.

Thank you .