Fair Trade and Co-operatives

The Fair Trade and co-operative movements have much in common. This chapter aims to examine the convergences and divergences between the two fields, highlighting what they can learn from each other and how practitioners and researchers in the two areas can better collaborate.

Fair trade is an innovative approach to economic development that uses a market-driven approach to exploit the growing trend in ethical, or caused-based, consumption (Nicholls & Opal 2005). Fair Trade organizations aim to re-engineer the value chains between poor producers and artisans - typically in developing countries - and their wholesale buyers such that a greater proportion of the overall rents accrue to those who provide the inputs. Put simply, Fair Trade aims to ensure that the poorest actors in a supply chain benefit from more of the overall financial value creation as a development tool. Moreover, Fair Trade reconnects producers and consumers at the point of purchase such that consumption becomes a political – or, at least, life style – choice.

This chapter is structured as follows. After this introduction, the second section describes the development of Fair Trade from its historical roots to the current organizational landscape and market organization. Next there is a discussion of several key issues and challenges that have emerged as Fair Trade has become increasingly institutionalized. Then, the fourth section explores the relationship between Fair Trade and the co-operative and mutual movements. Finally, conclusions serve to sum up the chapter.