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 …show more content…
Bezencon (2011, pp.64,65) states that the earnings of Fair Trade farmers will be protected by price floor set by Fairtrade Foundation to ensure selling price of Fairtrade certified products is higher than market price and independent of the current market condition. Taking the coffee industry in 2013 as an example, despite the fact that coffee prices was low, Fairtrade farmers in Mexico, Peru, Tanzania and Indonesia sold around 8 to 26 percent higher, are mentioned in Fairtrade International (2016, p.1). It seems that Fairtrade farmers’ income can be secured. Yet data gathered in the Dragusanu et al. (2014, pp. 228-229) suggests a considerable proportion of crops produced by Fairtrade-certified farmers can be sold for the Fairtrade price: coffee (45 percent), cane sugar (54 percent), cocoa (61 percent), bananas (72 percent), and cotton (60 percent). It shows the exceptions do occur in the prevention of earning below the minimum price. As a result, Fairtrade growers cannot gain better price as the targets of Fairtrade and hence income stability cannot be guaranteed.
Finally, it can be argued that income generation training is ineffective for Fairtrade producers and workers. Fairtrade International (2016, p.1) reports greater proportion of Fairtrade famers received training than that of non-Fairtrade farmers. According to Bezencon (2011, pp. 64-65), training provided by Fair Trade is about
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To begin, migrant farmers are not paid fair wages. In Source D, the graph demonstrates that a farm worker will earn only $.30 for every $100. of produce that he harvests. The majority of the earnings are split between the manufacturers and the retailers. This does not leave the farm worker with an adequate salary to feed and clothe his family. Furthermore, with such measly wages, the farm workers cannot live “The American Dream.”
I watched the video “The Coffee Go-Round” which talks about how the cost of coffee seems to be dropping and as a result this has a negative impact on coffee producing countries. One of the strategies mentioned in the video is to grow different crops, this strategy isn’t so great since many of these farmers don’t have enough money to grow different crops. Another strategy mentioned is to move out of the land and go into the city, this is a good and bad option. It’s a good option since in cities there are more jobs being offered. However, it’s not such a great option because many of these farmers have lived their whole lives on their land, and moving to the city is a drastic change especially if they have a family. Lastly, another option is fair
In 1890 clergyman Washington Gladden wrote an article called “The Embattled Farmers”. In it he blamed the ruin of the farmers on “protective tariffs, trusts…speculation in farm products, over-greedy middlemen, and exorbitant transportation rates.”
In the first week of classes we learned seven economic principles that would later be reinforced with examples in the class along with providing our own examples and analysis of the concepts in our own written work and debates about real world issues and events. We first talked about how incentives matter. In agriculture, and many other business sectors, incentives are very important and come in many forms such as subsidies or tax breaks from the government. It was also very important to learn about the shortages and surpluses that could amount from such incentives. For example, if the government were to give farmers prices above equilibrium, farmers would then be able to over produce above the demand levels. This is not to say that the government can’t sometimes improve the market outcomes. If a market failure is present and the government interferes, it would result in a positive market outcome. Next we discussed the importance of trade-offs and the opportunity costs behind those trade-offs. We make our trade-offs among three pillars of values: social/cultural, environmental, and economics and only when all three are balanced are we completely sustainable. In agriculture, trade-offs and opportunity costs are faced daily, and decisions should be made according to what is most sustainable now, and in the future. If a farmer decides to drain a wetland for more crop space to produce more (economic), the opportunity cost is the ecosystem being destroyed (environmental). Another example is if a farmer decides to farm organically, the opportunity cost is the increased yields of non-organic farming practices. Next I learned that rational people think at the margin. An example of this within agriculture is that a farmer does not think that he will hire five people to run two tractors, he thinks at the margin, hires two people to do the job, and therefore profits from that decision. I learned that markets are a good way
Astyk and Newton, in their essay: The Rich Get Richer, the Poor Go Hungry, explains that “around the world, industrial agriculture has consolidated land ownership into the hands of smaller and smaller populations” destroying local self-sufficiency (518). Individuals are no longer able to grow own fresh, healthy foods to feed their family. They now depend on industrially grown crops and processed foods loaded with chemicals for food. Additionally, because of the farm policy, farmers that continue to cultivate healthy produce like fruits and vegetables get little or no government support, thus the higher prices of fresh produce seen today at our grocery stores.
Our sense of Adventure and inability to abstain from new and exotic endeavors has bound us with a flaxen cord. With each new finding probing us to find more, we fulfill our curiosity. We eat more food and grow in knowledge. And this is great for mankind, in fact it lead to our nations foundation. Now, we trade and barter foods grown across the world. This makes it expensive to ship foods as well as difficult to eat food with less GMOs. And for foods that are only able to grow in specific climates it leads to “the exploitation of cheap labor.” (Source F). Meaning that countries without minimum wage requirements work long hours with unsubstantial pay. It damages their economies and communities due to the lack of
The Brazilian acai berry has been a food staple for low income families for years and a cultural symbol for generations. This berry is vital in Brazil, where it is farmed and, until recently had a relatively small market. However, after an Oprah interview the demand for acai has become an international affair. The rising demand has created a free market; however the once inexpensive food staple has become too expensive for the low income families. This report will analyse the current markets advantages and disadvantages, followed by two possible government intervention models. The examined interventions will be export tariff and price ceiling.
Patel concludes that these systems favor the consumers rather than the producers. He uses Mexican corn as an example. The price of corn in the Mexican market collapsed due to U.S imports. The U.S corn farmers were significantly subsidized by their government, and the poor Mexican farmers had no way to compete. Patel accuses America of using its economic and political power to strong-arm Mexico and other countries under the guise of free trade agreements. With all of the evidence Patel presents on this topic, any reader would have a difficult time disagreeing with this assertion.
In chapter seven, it was stated that the coffee shop company do not completely buy from the small-time farmers. In case regarding towards Rwanda, a developing area where Starbucks supposedly performs fair trade, it was discovered that Starbucks buy their coffee beans from bigger plantations and the middle man, who buys coffee beans from small-time farmers usually scamming them (216). This creation of image of Starbucks being a good corporate business in helping the small time farmers earn more income is contracted by Simon’s findings, and shows that the coffee company is actually taking advantage of the small time farmers, when Starbucks buys from the middle man or the big plantation owners, it pay less for the coffee beans than they do if Starbucks purchases beans from small-time farmers. The greed of Starbucks at the expense of the individual farmers is unethical, yet the coffee shop company markets the contradiction.
In my opinion cheap prices for imported goods is benefit for the citizens of developed country, but it carries some negative impacts. I assume that low wages in the developing countries cause of not providing the desired quality of product manufacturing and sanitation. The spread of the diseases can occur in food hubs that are engaged in distribution of food in the wholesale and retail chains. It is place where control of quality must be strong. The solution of this problem may become international supervisory structure in the field of production and
In addition to that, when developing countries were convinced, it has come to the arisen of a contemporary debate of free trade vs. fair trade. Obviously, in economic globalization of free trade, China has a main advantage which is low working wage, relatively to the US wage. And, the problem is that there is no mean of defining "unacceptably low wages" or "inhumane working conditions." As a result of the huge international gap of living standards, China has benefited from free trade, although most Americans view it as an unfair
In the Fairtrade practice, customers of Fairtrade goods must pay a Producer Organisation the Fairtrade Minimum price. Furthermore, farmers and workers are involved in deciding on which projects the Fairtrade Premium is invested in whether it be socially, environmentally or economically. Regarding the ‘Aid for Trade’, the Ministers of Foreign Affairs and Trade as well as the Minister for Trade and Investment introduced the Strategy for Australia’s Aid for Trade investments, building a foundation for future Australian aid for trade investments. In addition, organisations such as the World Trade Organisation (WTO) are involved with international trade as well as the Organisation for Economic Co-operation and Development (OECD) who initiated a global monitoring exercise known as the Global Aid for Trade
By 1993, the Banana Empire ceased to exist due to Panama Disease, ongoing labour issues, the rise of new competition and the increased assertiveness of host country governments all contributed to the growing intricacy of the industry. Nowadays, the modern banana farmer has been exposed to many pesticides, which have led to adverse health conditions for the majority of workers but working conditions and wages are on the rise currently. The introduction of fair trade bananas in 2004 was fundamental in bettering the working conditions for farmers and labourers.
These markets became inundated with grain, the prices plummeted, forcing farmers to plow more acres or produce more bushels per acre. This pushed yet more cheap product onto the market, driving prices down further, perpetuating the cycle in what is termed the “treadmill effect” (Roberts 24). This is a key problem of the modern “Walmartization” of food - this low cost, high volume maxim exemplifies the gross “inadequacies of food as an economic phenomenon” through what economists call “differentiation” (Roberts 31, 36). For example, farmers have an indistinguishable product from other producers (e.g. corn), therefore they must be ultra-competitive, down to a fraction of a penny, to sell to manufacturers; envision an upside-down triangle. My mother, an artisan who produces hand-made window treatments (shades, swags, valances), removed herself from the sweatshop industry (due to her superior workmanship) nearly 30 years ago. However, she has not increased prices in 20 years because if she did, her designers would flock back to the sweatshops. She must produce more in order to make a living wage, barely making above sweatshop prices herself. Applied to the food industry, the rush to maximize profit and lower cost leads to a diminished product and strangles competition and alternative voices, as they cannot
In light of this, I would like to explore research frontiers in the area of the challenges of managing food and farm businesses in a global setting of the 21st Century. In our society beleaguered by agricultural problems that ranges from economic to environmental problems such as weather and global warming, issues concerning trade and management of agricultural enterprises has been the topic of debate for the past decade. Many developing/poor countries who earn their living from agriculture continuously suffer from poverty and hunger as a result of the increasing pressures on the world's resource base. Policymakers are gripped with finding solutions to problems such as structural and technological constraints, inappropriate domestic policies and an unfavourable external economic environment. As a result, the growth of these economies has been slow, undernourishment has been increasing and the marginalization of these countries in the global economy has continued. This trend has created problems for developing countries over the past decade. Economic and financial