What is fair trade in economics?

Fair trade can be defined as a pre defined standards for producers to protect their rights by giving them right payment for their goods.Fairtrade is a system of certification that aims to ensure a set of standards are met in the production and supply of a product or ingredient.

Fair trade is a global movement of international trade that nurtures sustainable development through fair and equitable trading partnerships. Fair trade strives to alleviate poverty by providing direct market access to artisan groups, translating into more benefits to the producers.

The mainstream market systems are dominated by long trade chains and high profit margins, where the majority of the profits are split by numerous intermediaries, and the producers receive very low wages for their work. Fair trade companies work directly with producer groups and pay fair and sustainable wages for their work.