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Fair Trade

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Charlotte Eriksen

on 1 July 2014

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Transcript of Fair Trade

What is Fair Trade?
The Fair Trade movement includes a number of organizations that encourage the sale of retail Fair Trade goods for which the producer receives guaranteed Fair Trade terms (Sidwell, 2008)

The movement believes that free trade harms the poor (Sidwell, 2008).

The International Fairtrade Certification Mark was introduced in 2002.

Fair Trade is both unique and controversial.

Common products include: Coffee, tea, chocolate, wine and bananas

Arguments for fair trade
Fair Trade reduces risks for producers by setting a minimum price, giving them a social premium. (Mohan S, 2013)
In 2009, 65 million dollars Fair Trade premium was given to the producers,
workers and their communities (Mohan S, 2013).

The Fair Trade movement aims to create a healthy and safe working environment
Fair Trade has published in their official website to announce they will secure the wellbeing of children.(Fairtrade Foundation, 2011)
Akua Gyamfua, a female worker explanaied various learning benefits. (Fairtrade Foundation, 2011)

Fair Trade is an engine of growth for small farmers (Raynolds et al, 2004)

Fair Trade provides a closer link between consumers and producers (Fairtrade Foundation, 2008)

Our Past Understanding
We examine our past understanding of fair trade because:

Fair Trade's success depends on consumers' buyer behaviour.

Our previous understanding can
represent other public understanding

It can give useful insight into cultural
differences and Fair Trade
Arguments against fair trade
Negative effects on ‘unprotected’ farmers.

The movement is full of hypocrisy (Booth, 2004).

Fairtrade helps rich land owners rather than landless labourers.

Unfair distribution of fair trade efforts
18% work in agriculture
51 Fairtrade farms, average salary $9000
– 80% work in agriculture,
4 Fairtrade farms, average salary $700
(Sidwell, 2008)

Regulations can lead to greater
politicisation and corruption (Booth, 2004)
Current Understanding
Introduced to Fair Trade in primary school

Catholic School encouraged students to buy Fair Trade

GCSEs further developed knowledge of Fair Trade

However, criticism of the movement was limited and simplistic
Fair Trade Initiatives


Introduced to fair trade in Business Studies during the IB Diploma

However, Fair Trade was not emphasized socially

Language barriers prevented support

Overall, I had a neutral and shallow perception
First introduced to the movement at
Fair Trade Day in school

GCSE geography further developed existing knowledge

Understood Fair Trade as aiding LEDC's and improving equality

Recognition of the fair trade logo

Encouraged parents to buy fair trade

Limited prior knowledge of fair trade

Had previously only briefly heard about fair trade

No previous significant academic focus on fair trade

We examine our current understanding of fair trade to discover

Varying perceptions & cultural influence

The effect of increased knowledge on our perception of fair trade

Further doubts and questions about fair trade

Our opinion of the effectiveness of Fair Trade
Learned what fair trade is and current and controversial issues regarding it.

Discovered that Fair Trade is relatively new for China.The majority of economic development in China is more dependent on Free Trade.

It’s becoming increasingly popular in these years (Mercier, 2010).

First introduced by the Hong Kong in the early 21st century then started to emerge in 2009. (Mercier, 2010)

Fair Trade Success
First to sell fair trade goods (1992)
Fair Trade campaigns including:
Fair Trade Fortnights
Beyond Fair Trade
Only sells Fair Trade bananas (2006)
Discovered Fair Trade items I owned

Skeptical about the true benefits of Free Trade

Fair Trade should be more transparent

Better methods should be developed to help markets

Until Free Trade is "Free", Fair Trade may be a good movement
Realised Fair Trade's controversy.

Learned that Fair Trade doesn't benefit very poor countries as much middle-income countries.
Mexico has 51
Ethiopia only has 4 (Although 80% of the population in agriculture).

Question whether LEDCs benefit from Fair Trade.

Although the scheme undoubtedly means well, it is hard to conclude that Fairtrade does much good.

Now understand the more complex arguments for and against Fair Trade.

Understand the benefits that Free Trade brings.

Aware of the corruption and unethical practices of the Fairtrade movement

Reference List
Impossible entry requirements for producers in poorer countries.
Limited resources; incapable of achieving the proper business model
False perception that Fair Trade aid's low-income countries
Top 4 nations (2007) –
Mexico, Colombia, Peru, South Africa
– middle-income nations (Mohan, 2010)
Fair Trade fees

Consumers’ willingness to pay more not justified

producers often paid less than the legal minimum wage, which does
violate Fair Trade standards (Mohan, 2010)
Fair Trade often prevents poor countries from further development
focus on primary products

Does not encourage efficiency, and minimises consumer surplus (Powell, 2011)
According to The Fairtrade Foundation (2013) , the movement has been had the following success:
Poundland, 1 pound
Morrisons, 88p
Booth, P., 2004. 'Is Trade Justice Just? Is Fair Trade Fair?'. Institute of Economic Affairs Discussion Paper., 10., p. 2-9

Co-Operative. 2014. FairtradeFortnight [online]. [Accessed on 03 Feb 2014]. Available from: http://www.co-operative.coopcdn-1cf16983b48808a/RevolutionFiles/Fairtrade/img/FairtradeFortnight.jpg

Cinnamon. 2014. TC Tea Pickers [online]. [Accessed on 3 Feb 2014]. Available from: http://www.cinnamon-online.co.uk/sitebuildercontent/sitebuilderpictures/tcteapickers.gif

Fairtrade Foundaion. 2013. Annual Review - Facts and figures [online]. [Accessed on 3 Feb 2014]. Available from: http://www.fairtrade.org.uk/images/2013/F/Facts%20and%20Figures%20infographics%20resized.jpg

Fairtrade Foundation. 2013. Annual Review 2012/2013 [online]. [Accessed on 4 Feb 2014]. Available from: http://www.fairtrade.org.uk/what_is_fairtrade/annual_reports.aspx

Mohan, S. 2010. Fair trade without the froth. Great Britain. Hobbs the Printers

MySupermarket. 2014. 5 Fairtrade small bananas [online]. [Accessed on 3 Feb 2014]. Available from: http://images4.mysupermarket.co.uk/Products_1000/54/235654.jpg?v=2

Parkin, M. et al. 2012. Economics. 8th ed. Harlow: Pearson Addison-Wesley.

Persephone Magazine. 2013. Jorney of the coffee bean [online]. [Accessed on 3 Feb 2014]. Available from: http://persephonemagazine.com/wp-content/uploads/2013/01/Starbucks-fair-trade-ad.jpg

Raynolds et al. 2004. Fair Trade Coffee: Building Producer Capacity Via Global Networks. Journal of International Development 16, 1109-1121.

Sidwell, M., 2008. www.adamsmith.org [Online] Available at: http://www.adamsmith.org/sites/default/files/images/pdf/unfair_trade.pdf., [Accessed 03 February 14]

The Guardian. 2013. Journey of the coffee been [online]. The guardian. [Accessed on 4 Feb 2014]. Available from: http://www.theguardian.com/starbucks-fairtrade/journey-of-the-coffee-bean

Introduced to Fair Trade in school, the Barter System.

Knowledge started with basic material.

After inventing money, people stopped using this method.
Ignores past success of Free Trade
Encourages environmental protection and sustainability (Fairtrade Foundation, 2008)

Fair Trade is a niche aspect of trade which benefits a small target group effectively. (Mohan, 2010)

Fair Trade relies on market forces like other trade (Mohan, 2010).
Similar to organic or local produce niches
Benefits of Fair Trade
There are several important benefits of Fair Trade

However, much evidence suggests it is not a sufficient method to develop economies

Other methods are necessary to address long-term issues of developing economics

Methods could include:
Free trade
Micro credit schemes

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