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Fair Trade BBA 1

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Jacqueline Neff

on 8 April 2013

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Transcript of Fair Trade BBA 1

Fair Trade Nicholas Kerrell 2013 Adapted from The Business Upper Intermediate What sorts of products are traded under the label 'fair trade'?
When you buy a cup of coffee, what is 'a fair price'?
If you spent your holidays working on a coffee farm, how would you define 'a fair wage' and 'fair working conditions'?
If you owned a café, how would you define 'a fair profit' on a cup of coffee? Why fair trade is a bad deal Read the title above and predict which of the following points are expressed by the writer. Fair trade products make rich consumers feel guilty.
Free trade would help the poorest farmers more than fair trade.
Fair trade products are low quality.
Fair trade farmers are encouraged to modernize their production methods.
Big coffee chains force farmers to reduce their prices. Reading for detail IN THE NAME of fair trade, we are encouraged to pay more for everything from cups of coffee and chocolate bars to cosmetics and cut flowers. For a product to be certified as fair trade, the importer selling it in the West must pay a minimum price to producers. A voluntary price support scheme is entirely compatible with free trade: there is no conflict between altruism and the market economy. But while filling the shopping trolley with fair trade goods may relieve the guilt of middle-class consumers, its wider effects may not really be so positive. 1. What must be paid to get fair trade certification?
2. Why might western consumers be attracted to fair trade goods? A combination of economic illiteracy and misguided good intentions has created a monster that threatens the prosperity of the poorest producers.
Poverty relief would be much better served by a free trade and not a fair trade agenda. Fair trade policies, whether government-enforced or applied through ethical consumer schemes, distort the market. Producers in some countries may choose to produce certain crops only because they can get an artificially high price under fair trade schemes. Which consequence of fair trade has led Mexican producers to expand production? IN THE NAME of fair trade, we are encouraged to pay more for everything from cups of coffee and chocolate bars to cosmetics and cut flowers. For a product to be certified as fair trade, the importer selling it in the West must pay a minimum price to producers. A voluntary price support scheme is entirely compatible with free trade: there is no conflict between altruism and the market economy. But while filling the shopping trolley with fair trade goods may relieve the guilt of middle-class consumers, its wider effects may not really be so positive. 1. What must be paid to get fair trade certification?
2. Why might western consumers be attracted to fair trade goods? A combination of economic illiteracy and misguided good intentions has created a monster that threatens the prosperity of the poorest producers.
Poverty relief would be much better served by a free trade and not a fair trade agenda. Fair trade policies, whether government-enforced or applied through ethical consumer schemes, distort the market. Producers in some countries may choose to produce certain crops only because they can get an artificially high price under fair trade schemes. Which consequence of fair trade has led Mexican producers to expand production? This kicks away the ladder from the poorest producers who have no choice but to stay in the market. Take the example of Mexico, which produces a quarter of fair trade coffee. Because of the incentive of fair trade, Mexican producers have decided to keep producing coffee, even expanding production. Without this incentive, Mexico could be producing other crops more efficiently. This distorting effect is unfair on poorer countries such as Ethiopia where producing other crops is not an option. As a result of fair trade policies, they are faced with greater competition. Fair trade also punishes producers who are less good at quality - generally the poorest. Setting a minimum price for products encourages retailers to buy only from more affluent producers that can invest in higher quality. Why do richer producers benefit most from fair trade? This kicks away the ladder from the poorest producers who have no choice but to stay in the market. Take the example of Mexico, which produces a quarter of fair trade coffee. Because of the incentive of fair trade, Mexican producers have decided to keep producing coffee, even expanding production. Without this incentive, Mexico could be producing other crops more efficiently. This distorting effect is unfair on poorer countries such as Ethiopia where producing other crops is not an option. As a result of fair trade policies, they are faced with greater competition. Fair trade also punishes producers who are less good at quality - generally the poorest. Setting a minimum price for products encourages retailers to buy only from more affluent producers that can invest in higher quality. Why do richer producers benefit most from fair trade? Poorer producers may be able to supply lower quality products more cheaply, but there is no incentive to buy these, because the retailers cannot call it fair trade. By simply pronouncing it 'unfair' to pay below a certain price, fair trade supporters seem to believe they can ignore market realities, wave a magic wand and make everything better. But fair trade is like all attempts to control prices: the poorest are cut out of the market. Free markets and open trade have lifted hundreds f millions of people out of poverty over the last quarter century. The work because they encourage producers to pursue higher living standards by becoming more productive through mechanization and modernization. By contract, fair trade supports a romantic view of peasant farmers toiling in the fields day in day out, rather than helping producers buy machinery and move into processing and packaging of products. Which processes of agricultural development has fair trade discouraged? Free markets and open trade have lifted hundreds f millions of people out of poverty over the last quarter century. The work because they encourage producers to pursue higher living standards by becoming more productive through mechanization and modernization. By contract, fair trade supports a romantic view of peasant farmers toiling in the fields day in day out, rather than helping producers buy machinery and move into processing and packaging of products. Which processes of agricultural development has fair trade discouraged? The Fairtrade Foundation, which promotes the scheme in the UK, admits it has no policy on mechanization. It has even been encouraging producers to become less efficient by growing other crops in between coffee plants. This limits producers' ability to mechanize, locking them into poverty.
In stark contrast, Starbucks has been running community projects to help producers construct coffee mills and climb up the economic ladder. Shops like Starbucks, Caffé Nero and Coffee Republic have encouraged consumers to appreciate coffee as a premium product. How have consumer attitudes to coffee changed? The Fairtrade Foundation, which promotes the scheme in the UK, admits it has no policy on mechanization. It has even been encouraging producers to become less efficient by growing other crops in between coffee plants. This limits producers' ability to mechanize, locking them into poverty.
In stark contrast, Starbucks has been running community projects to help producers construct coffee mills and climb up the economic ladder. Shops like Starbucks, Caffé Nero and Coffee Republic have encouraged consumers to appreciate coffee as a premium product. How have consumer attitudes to coffee changed? Consumers are dropping the cheap instant coffee they were drinking in the office in favor of capuccinos and lattes made with high-price arabica beans. Many producers, following this logic, are now commanding higher prices. this is not because of fair trade but because they are responding to the demands of the market.
Despite attacks from anti-globalization activists, the truth is that Starbucks has done more than anyone else in expanding markets and raising incomes for coffee producers in developing countries. It is the coffee chains that are the real superheroes of the coffee market, not fair trade campaigners. Which producers have improved income without help from fair trade? Consumers are dropping the cheap instant coffee they were drinking in the office in favor of capuccinos and lattes made with high-price arabica beans. Many producers, following this logic, are now commanding higher prices. this is not because of fair trade but because they are responding to the demands of the market.
Despite attacks from anti-globalization activists, the truth is that Starbucks has done more than anyone else in expanding markets and raising incomes for coffee producers in developing countries. It is the coffee chains that are the real superheroes of the coffee market, not fair trade campaigners. Which producers have improved income without help from fair trade? Starbucks Complete the text with the following words. Listen and check.

compensated importantly
economic promotes
environment expense
fashion selection
traded worth

Picture this. You’re staring at the 1)___________________ of coffee in your favourite grocery store. Amongst the wall of flavours and brands, you notice a bag with a mark on it: the fair trade mark. But what is fair trade? It costs more, so is the extra price 2)_______________ it?
Fair trade coffee is shade-grown which is better for the environment and it tastes better as well. More 3)_________________, it’s an organised social movement and market-based approach designed to help producers in developing countries and 4)______________ sustainability. Fair trade ensures that the people who grow the products we enjoy every day such as coffee, cocoa, sugar and tea, among a large list of other things, are 5)_____________________ fairly while helping them move towards 6)__________________ self-sufficiency and stability.
Following oil, coffee is the world’s second most highly 7)________________ good, yet in recent years, the price of coffee has dropped less than 50 cents per pound. Despite the drop in cost, retail coffee prices remain high which means the coffee retailers are becoming rich at the 8)_____________________ of the coffee growers.
Fair trade certified coffee ensures that coffee growers are paid a minimum of $1.26 per pound and stipulates that coffee is grown in a sustainable 9)___________________. With fair trade coffee, both consumers and producers win, so take home the bag with the fair trade mark. It’s good for the 10)_________________________ and for you. selection worth importantly promotes compensated economic traded expense fashion environment Complete the text with the following words. Listen and check.

compensated importantly
economic promotes
environment expense
fashion selection
traded worth

Picture this. You’re staring at the 1)___________________ of coffee in your favourite grocery store. Amongst the wall of flavours and brands, you notice a bag with a mark on it: the fair trade mark. But what is fair trade? It costs more, so is the extra price 2)_______________ it?
Fair trade coffee is shade-grown which is better for the environment and it tastes better as well. More 3)_________________, it’s an organised social movement and market-based approach designed to help producers in developing countries and 4)______________ sustainability. Fair trade ensures that the people who grow the products we enjoy every day such as coffee, cocoa, sugar and tea, among a large list of other things, are 5)_____________________ fairly while helping them move towards 6)__________________ self-sufficiency and stability.
Following oil, coffee is the world’s second most highly 7)________________ good, yet in recent years, the price of coffee has dropped less than 50 cents per pound. Despite the drop in cost, retail coffee prices remain high which means the coffee retailers are becoming rich at the 8)_____________________ of the coffee growers.
Fair trade certified coffee ensures that coffee growers are paid a minimum of $1.26 per pound and stipulates that coffee is grown in a sustainable 9)___________________. With fair trade coffee, both consumers and producers win, so take home the bag with the fair trade mark. It’s good for the 10)_________________________ and for you. Discussion Work in small groups and discuss how far you think each of the following statements is true. Free trade rewards efficiency; fair trade rewards bad habits. Fair trade is the best protection some workers have against exploitation. Fair trade is just a fashion among rich western consumers. Free trade only deals with the short term; fair trade deals with the bigger picture. collaboration from Jon Green
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