Alternative Trade: A Brief Overview

Alternative trade aims to contribute to the alleviation of poverty in developing regions of the world by establishing a system of trade that allows marginalized producers in developing regions to gain access to developed markets. This alternative trade builds on producers' skills and enables communities to play an active part in their own development, while at the same time satisfying consumer demand in the developed markets.

The fundamental characteristic of alternative trade is that of equal partnership and respect - partnership between the developing region producers and importers, shops, labeling organizations, and consumers. Alternative trade "humanizes" the trade process - making the producer-consumer chain as short as possible so that consumers become aware of the culture, identity, and conditions in which producers live. All actors are committed to the principle of alternative trade, the need for advocacy in their working relations and the importance of awareness-raising and advocacy work. The idea of the "invisible hand" has given way to the idea of working "hand in hand" with the market regulated by democratic authorities.

Thus, in a spirit of partnership, certain guiding principles, or criteria, are agreed by both sides. As a minimum, developing region producers commit themselves to democratic functioning and decision-making procedures within their organizations.

In return, alternative trade organizations agree to:
* provide direct access to developed world markets for producer's products, avoiding to the greatest possible extent middlemen and speculators;
* pay a fair price that covers producers' basic needs and covers costs of production, and leaves a margin for investment;
* pay part of the price (40 - 50%) in advance so that producers avoid falling into debt;
* establish long-term working relationships and contracts with producers.

[The above material is paraphrased from the Fair Trade Yearbook: Towards 2000 which is a publication of the European Fair Trade Association. EFTA, January 1998, p.23 & 25]