Fair trade and the informal economy

Fair trade governance operates in formalised supply but much of the fair trade movement aims to support own-account workers and micro-enterprises often operating in the informal economy.

Although Fair Trade governance operates in formalised supply chains, much of the Fair Trade movement aims to support own-account workers and micro-enterprises which are often as part of the informal economy. Fair trade relationships are often synonymous with the payment of prices defined by the sustainable cost of production, rather than market forces, although the range of governance approaches involved provide a variety of support mechanisms for producers: including the supply of pre-production credit (to meet operational costs), the development of long-standing, transparent and supportive relationships, and additional investments by buyers in building producer social, economic and environmental capacity. Fair Trade governance aims to improve the conditions under which developing world producers supply the market, and specifically aims to create market opportunities driven by buyers who transcend value for money calculations based on their own immediate material desires.

Funders

ESRC-funded PhD (2011); Women in the Informal Economy, Globalizing and Organizing (WIEGO) (2013); Sustainable Places Research Institute, Cardiff University (2014-2015)

People

• Dr Alastair Smith, University of Warwick