Does Fair Trade have a future in this world?
Table of content
1. Introduction and Problem statement.
Nowadays, Fair trade products are hot items. In 2006 worldwide sales came up to 1.6 billion Euros of Fairtrade Certified Products. This was about 42% more than it was the year before. Even the products coffee and cocoa knew a bigger growth in the numbers 53% and 93% respectively (Fairtrade Labelling Organizations International Annual Report, 2006/07)
Fair trade is an alternative approach to trading partnerships that aims for sustainable development of excluded or disadvantaged producers in the Third World. It seeks to achieve this by providing better
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When their attitudes will be positively influenced this will also influence their behavior, which has a positive effect on their fair trade buying behavior. This support what Shaw and Shiu in de Pelsmacker & Jannsens (2002) found out: processing of information about an ethical issue will determine consumers’ beliefs, behavior and attitudes.
There are two constructs of attitude towards fair trade in general: a negative construct and a positive construct. The negative construct: skepticism which has a negative effect on people their fair trade buying behavior. The positive construct: concern about fair trade issues, which has a positive effect on people their fair trade buying behavior. Out of all the above named trade-offs the current study focuses on two kind of trade-offs: price and fair trade concern.
2.1 Price and fair trade buying behavior
In this case price is described as how much money consumers spend on fair trade products. In definition fair trade means: to ensure stable trading conditions for producers in developing countries who are disadvantaged (Ozcaglar-Toulouse, Shiu & Shaw, 2006). Stable trading like a living wage and safe working conditions for disadvantaged farmers in developing countries will create a higher price than the same standard products produced by farmers in the advantaged countries.
Previous studies have shown that ethical products are considered too expensive or that the consumer does not
The set price will make the producers comply with the standard costs and which will be beneficial to the consumer at the end. Businesses will need to follow the standards and pledge that no child will experience slave labor in their work and production of products. If Business does not follow the practices we can boycott the products. Business should be investigated and held accountable. For the consumer to only purchase fair trade products until the item becomes a fair trade product. As consumers we can look at labels, be more aware of fair trade products. We can talk with our local grocery companies, coffee shops, and look for the fair trade products.
Being an entirely fair trade company means Just Us pays its suppliers from so-called “third world” countries a fair price, including a premium for social welfare, gets into long-term contracts (equal or more then a harvest cycle) with them skipping middlemen who often absorb most of the margin and offers them additional benefits e.g. pre-payment and loans. “The
Fair trade also comfy an improved deal for farmers through: Fair prices, security for contracts, investments in development, improved working conditions and sustainable farming methods. Café direct is the leading fair trade hot drinks brand it the Uk. Café direct uses the business to improve livelihoods and build communities to help the farmers and workers. Furthermore, Café direct sent more than half of its profits back to into the business of its grower partners. Café direct also gives their producers a voice. Café direct makes sure that it is never the sole buyer of any of its partners. Furthermore, Café direct motivates growers to find other buyers, this averts buyers from becoming independent on the company. Also, this proves that Café direct is not out to use its buyer-power to manipulate its partners for
Fairtrade foundation always creates opportunities for economically disadvantaged producers, pay farmers fair price and make fair trade between each other. Because of these principles in trading,
There will be no clear solution that can solve the problem completely, as it will not happen. Such measures take a considerable amount of time to implement and its effects may take a long time to trickle to the poor marginalized farmers in Nicaragua and other Latin American countries. The fair trade market attempt to solve the problem of price, such as many other systems attempt to solve the larger problem, but instead it has led to more implications. With a mantra to support and represent coffee farmers, guaranteeing fair prices. The need to certify coffee by the FLO has raised burdens on these coffee growers which in turn has decreased the market and demand for certified coffee. Farmers are now selling less of their coffee beans to the Fair Trade price (Linton). Many cooperates and the FLO have argued and proposed increasing the selling price for certified coffee beans, but these efforts fall short, since increasing the prices would discourage consumers from buying fair trade coffee, as well as prevent any future business from expanding and contributing to the fair trade. This has not created any discouragement, instead, Fair Trade certified coffee continuous to be imported, with each year surpassing the previous (Haight, 2011). Even then the demand for Fair Trade coffee has decreased and instead, pushed it out of a
No good deed goes unpunished. No act of charity goes unresented. Buying coffee at the local coffee shop down the street, we see the Fair Trade logo and wonder whether ordering Fair Trade coffee rather than conventional coffee really supports farmers in unindustrialized countries. In other words, does Fair Trade work? The Fair Trade initiative aims to improve the living conditions of producers in developing nations. The goals of Fair Trade are to achieve higher prices for producers, greater availability of financing for producers, longer-term and more sustainable buyer-seller relationships, improved social goods and community development, and the use of environmentally friendly production processes. Fair Trade works through a certification
This case talks about Fair Trade USA which is one of the leading certifier of fair trade products in North America. Fair Trade USA was founded by Paul Rice in 1998. From a non profit organization, Fair Trade USA growth has been phenomenal. Initially after first year of its inception, it started certifying one million pounds of coffee. Today it is certifying more than 1 billion pounds of coffee per day.
Free Trade is the ability to trade goods and services without barriers, and for prices to rise naturally through supply and demand. In theory, Free Trade was a way to break down the barriers between countries, banishing taxes and allowing prices to be naturally set through supply and demand. According to the World Trade Organization, this gives the poor countries the opportunity to specialize in the production of goods that derive from their environment and natural resources with the capacity to sell those same goods to the western world, while being able to buy back goods that may not produced in their native country. This idea is to be beneficial to all; however, the rich become richer while the poor remain poor.
The “Fair Trade for All” implementation which aims to increase the market for fair trade coffee beans by allowing coffee plantations, who produce large amounts of coffee, to become fair trade certified. However, supply for fair trade coffee is larger than the demand. This makes it much harder for small coffee producers to sell their coffee as they must compete with large coffee plantations who can produce much more coffee, ultimately putting small-scale coffee producers at a disadvantage (Cole, N. L., & Brown, K. 2014).
The two fundamental questions in the survey were (Question one), “How familiar are you with the concept of fair trade?” to gauge fair trade awareness, and (Question two), “How frequently do you purchase or attempt to purchase fair trade products?” to gauge fair trade consumption. These questions, with four and five answer choices, respectively, provided incremental responses. The answer choices for the former question ranged from, “I have never heard of fair trade” to “Very familiar; I often hear about or encounter fair trade products or related information,” while the answer choices to the latter question ranged from “I have never purposefully bought a fair trade product,” to “Anytime I shop; I purposefully seek out fair trade products in everything I buy.”
According to the Cambridge Dictionary (2014), fairtrade is ‘ a way of selling or buying a product that makes certain that the people who produce the goods receive a fair trade’. Coffee producers’ products are not necessarily produced to organic standards (Global fairtrade, 2010). Nowadays, coffee is one of the most popular beverages in the world. Eighty-percent of the coffee products in the world market are made by twenty-five million small holders (fairtrade, 2012). Around one hundred and twenty five million people worldwide depend on coffee for their livelihood. There are seven million and nine hundred thousand tonnes of coffee produced per year and six million and two hundred thousand of these are for import (fairtrade, 2014).
Fair trade is a label that businesses who follow certain criteria for environmental and labor standards can purchase. According to the network of Four Fair Trade organizations, ‘‘Fairtrade is a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of,
The idea of Fairtrade emerged in the late 1940s, which aims to rise the living standard of the disadvantaged producers and farmers in the developing countries. Providing sustainable supports to them, including investments, training, decent working conditions and better prices. The first Fair Trade label was introduced in 1988 to certify Fairtrade product and thus Fairtrade products become saleable in both supermarkets and other mainstream actors (Bezencon, 2011, p.61). This essay argues that producers and workers cannot gain notable benefits from Fairtrade. It will begin by looking at the Fairtrade minimum price and wages, then move on to the financial stability guarantee from Fairtrade Foundation and finally with the factors
Free trade usually offers lower prices and the producer usually tries to make the product with cheaper price as possible as it could be. In other way of understanding, free trade is the act of buy and sell without the interference of government.
The idea of standards-based certification and labeling of foods, such as coffee, emerged in the 1980s. Unlike the commodity coffee chain, the standards-based Fair Trade value chain eliminated several middle layers, including the local buyer, miller, exporter, shipper, and importer and allowed farmers to deal directly with wholesalers. “Free trade” means unrestricted, uncontrolled access to our economy, tariff- and duty-free, for goods made for $4-per-hour or less. (Barlow, G. 2014).