founded 1997 headquarters ottawa canada website www.fairtrade.ca fairtrade canada formerly transfair canada is a national non profit certification and public education organization promoting fairtrade certified products in canada to improve the livelihood of developing world farmers and workers . it is the canadian member of flo international which unites 24 fair trade producer and certification initiatives across europe asia latin america north america africa australia and new zealand . contents 1 how fairtrade works 2 work 2.1 certification 2.2 licensing 2.3 promotion 3 criticisms 3.1 ethical basis of criticisms 3.2 what happens to the money 3.2.1 little money reaches the third world 3.2.2 less money reaches farmers 3.2.3 lack of evidence of impact 3.3 inefficient marketing system 3.3.1 corruption 3.4 fairtrade harms other farmers 3.4.1 overproduction argument 3.4.2 diverting aid from other farmers 3.5 other ethical issues 3.5.1 secretiveness 3.5.2 imposing politics 3.5.3 unethical selling techniques 3.5.4 misleading volunteers 3.6 failure to monitor standards 3.7 trade justice and fair trade 3.8 political objections 4 references 5 external links how fairtrade works edit with fairtrade coffee for instance packers in developed countries pay a fee to the fairtrade foundation for the right to use the brand and logo and nearly all the fee goes on marketing . packers and retailers can charge as much as they want for the coffee . the coffee has to come from a certified fairtrade cooperative and there is a minimum price when the world market is oversupplied and 10c per lb extra at other times . the cooperatives can on average sell only a third of their output as fairtrade because of lack of demand and sell the rest at world prices . 1 the exporting cooperative can spend the money in several ways . some goes on meeting the costs of conformity and certification as they have to meet fairtrade standards on all they produce they have to recover the costs from a small part of their turnover 2 sometimes as little as 8 % 3 and may not make any profit . some meets other costs . some is spent on social projects such as building schools clinics and baseball pitches . sometimes there is money left over for the farmers . the cooperatives sometimes pay farmers a higher price than farmers do sometimes less but there is no evidence on which is more common . 4 in some cases the farmers certainly do not get enough extra to cover their extra costs in conforming to fairtrade standards . there is little or no research on the extra costs incurred or the extra revenue . the marketing system for fairtrade and non fairtrade coffee is identical in the consuming countries using mostly the same importing packing distributing and retailing firms . some independent brands operate a virtual company paying importers packers and distributors and advertising agencies to handle their brand for cost reasons . 5 in the producing country fairtrade is marketed by only by fairtrade cooperatives while other coffee is marketed by fairtrade cooperatives as uncertified coffee by other cooperatives and by ordinary traders . 6 to become certified fairtrade producers the primary cooperative and its member farmers must operate to certain political standards imposed from europe . flo cert the for profit side handles producer certification inspecting and certifying producer organizations in more than 50 countries in africa asia and latin america . 7 in the fair trade debate there are many complaints of failure to enforce these standards with producers cooperatives importers and packers profiting by evading them . 8 work edit certification edit fairtrade canada is responsible for certifying that canadian products bearing the fairtrade certification marks meet international fairtrade standards . while the entire certification system monitors supply chains from the producers until the final point of packaging we are responsible for monitoring and auditing products once they enter canada to ensure that what is sold as fair trade certified actually is . licensing edit fairtrade canada licenses canadian companies to use the fair trade certification marks on their products and as part of that license companies must abide by strict mark use standards . fairtrade canada monitors these licensed organisations to ensure that the markings are not be used in a way that is misleading to the public and work with companies to ensure their use does not undermine the integrity of the marks . promotion edit fairtrade canada works alongside community groups companies and individual citizens to promote fair trade certified products . through partnerships campaigns promotional materials events and media engagement the organisation works to develop peoples understanding of fair trade and to build momentum so that more producers can sell more of their products on fair terms . sign announcing wolfville s canada fair trade town status the following fair trade products are currently certified by fairtrade canada and available throughout the country coffee tea cocoa sugar fresh fruit grains rice and quinoa spices and herbs cotton wine flowers nuts and oils shea butter and olive oil and sports balls . fairtrade canada organizes and coordinates several events every year to promote fair trade in canada most notably the fair trade fortnight or the quinzaine du commerce quitable in french which typically run in may and the canadian fairtrade towns campaign . in 2007 fairtrade certified sales in canada amounted to cad 120 million a 55 % year to year increase . furthermore in 2005 it was estimated that approximately 27 % of the canadian adult population was aware of fair trade certified coffee up from 17 % in 2003 and 11 % in 2001 . citation needed criticisms edit ethical basis of criticisms edit consumers have been shown to be content paying higher prices for fairtrade products in the belief that this helps the very poor . 9 the main ethical criticism of fairtrade is that this premium over non fairtrade products does not reach the producers and is instead collected by businesses employees of co operatives or used for unnecessary expenses . furthermore research has cited the implementation of certain fairtrade standards as a cause for greater inequalities in markets where these rigid rules are inappropriate for the specific market . 10 what happens to the money edit little money reaches the third world edit the fairtrade foundation does not monitor how much extra retailers charge for fairtrade goods so it is rarely possible to determine how much extra is charged or how much reaches the producers in spite of the unfair trading legislation . in four cases it has been possible to find out . one british caf chain was passing on less than one percent of the extra charged to the exporting cooperative ; 4 in finland valkila haaparanta and niemi 11 found that consumers paid much more for fairtrade and that only 11.5 % reached the exporter . kilian jones pratt and villalobos 12 talk of us fairtrade coffee getting 5 per lb extra at retail of which the exporter would have received only 2 % . mendoza and bastiaensen 13 calculated that in the uk only 1.6 % to 18 % of the extra charged for one product line reached the farmer . all these studies assume that the importers paid the full fairtrade price which is not necessarily the case . 14 less money reaches farmers edit the fairtrade foundation does not monitor how much of the extra money paid to the exporting cooperatives reaches the farmer . the cooperatives incur costs in reaching the fairtrade political standards and these are incurred on all production even if only a small amount is sold at fairtrade prices . the most successful cooperatives appear to spend a third of the extra price received on this some less successful cooperatives spend more than they gain . while this appears to be agreed by proponents and critics of fairtrade 15 there is a dearth of economic studies setting out the actual revenues and what the money was spent on . flo figures 16 are that 40 % of the money reaching the third world is spent on business and production which would include these costs as well as costs incurred by any inefficiency and corruption in the cooperative or the marketing system . the rest is stated to be spent on social projects rather than being passed on to farmers . there is no evidence that fairtrade farmers get higher prices on average . anecdotes state that farmers were paid more or less by traders than by fairtrade cooperatives . few of these anecdotes address the problems of price reporting in third world markets 17 and few appreciate the complexity of the different price packages which may or may not include credit harvesting transport processing etc. cooperatives typically average prices over the year so they pay less than traders at some times more at others . bassett 2009 18 is able to compare prices only where fairtrade and non fairtrade farmers have to sell cotton to the same monopsonistic ginneries which pay low prices . prices would have to be higher to compensate farmers for the increased costs they incur to produce fairtrade . for instance fairtrade encouraged nicaraguan farmers to switch to organic coffee which resulted in a higher price per pound but a lower net income because of higher costs and lower yields . 19 lack of evidence of impact edit there have been very few attempts at fair trade impact studies . it would be methodologically and logically incorrect to use these attempts to conclude that fairtrade in general does or does not have a positive impact . 20 griffiths 2011 4 argues that few of these attempts meet the normal standards for an impact study such as comparing the before and after situation and having meaningful control groups . serious methodological problems arise in sampling in comparing prices and from the fact that the social projects of fairtrade do not usually aim to produce economic benefits . inefficient marketing system edit one reason for low prices is that fairtrade farmers have to sell through a monopsonist cooperative which may be inefficient or corrupt certainly some private traders are more efficient than some cooperatives . they can not choose the buyer who offers the best price or switch when their cooperative is going bankrupt 21 if they wish to retain fairtrade status . there are also complaints that fairtrade deviates from the free market ideal of some economists . brink calls fair trade a misguided attempt to make up for market failures encouraging market inefficiencies and overproduction . 22 corruption edit the fair trade marketing system provides more opportunities for corruption than the normal marketing system ; and less possibility of or incentive for controlling corruption . corruption has been noted in false labelling of coffee as fairtrade by retailers and by packers in the developing countries 23 paying exporters less than the fairtrade price for fairtrade coffee kickbacks 24 failure to provide the credit and other services specified 25 theft or preferential treatment for ruling elites of cooperatives 26 not paying laborers the specified minimum wage 27 fairtrade harms other farmers edit overproduction argument edit critics argue that fairtrade harms all non fairtrade farmers . fairtrade claims that its farmers are paid higher prices and are given special advice on increasing yields and quality . economists 22 28 29 30 31 32 state that if this is indeed so fairtrade farmers will increase production . as the demand for coffee is highly inelastic a small increase in supply means a large fall in market price so perhaps a million fairtrade farmers get a higher price and 24 million others get a substantially lower price . critics quote the example of farmers in vietnam being paid over the world price in the 1980s planting lots of coffee then flooding the world market in the 1990s . the fairtrade minimum price means that when the world market price collapses it is the non fairtrade farmers particularly the poorest who