"[The oral tradition] is very much an essential element of what constitutes our folk music and has been since the genre was first documented"
Indeed, the term "oral tradition" is oft used and the concept is probably fundamental to any discussion of folk music. The meaning of the phrase should be self-evident, but in practice it is one of those terms that seems to shift its meaning as soon as it is used. I, at least, have never understood where the boundary, if there is one, is set between, say oral tradition and literate transmission.
X sings a song collected by Sabine Baring-Gould "from the mouths of the people" (and published by him as closely to the original as possible - let's not go into a discussion on all those that he "improved.") Is X then continuing the oral tradition after a gap of a century and a half?
Y learns "I'm for ever blowing bubbles" from the local village folk as they sing it at leisure in the pub. When Y sings it to his children as a lullaby, has that song entered the oral tradition?