Fair trade is a fair and ethical model of trade that helps to build sustainable livelihoods for producers in developing countries. The fair trade system provides fair prices, decent working conditions, and fair terms of trade for farmers and workers around the world. Fair Trade USA’s mission statement is “to promote just relationships, sustainable communities, environmental stewardship, and economic justice by educating consumers about social justice issues such as fair wages.”
Introduction: Fair Trade. In business, fair trade is a structured social movement and market-based system that promotes equity in international trade through the exchange of ideas, transparency, and respect. Fairtrade has a significant impact on people’s social and economic existence.
Prices start at $12
Prices start at $11
Prices start at $12
For example, fair trade promotes sustainable development by improving trading conditions and ensuring that marginalized producers and laborers, especially in developing countries, are able to enjoy their rights. Under a fair trade program, developing nations have the ability to export goods such as coffee, bananas, tea, chocolate, gold, sugar, handicrafts, and flowers to developed nations.
There are currently so many fair trade organizations working to assist producers in various countries by improving ethical business among them. These trade fair organizations, together with customers, undertake initiatives that increase trade awareness and aid producers while also changing the way conservative international trading is done. The idea of fair trade, in most cases, goes beyond trading to ensure that international trade is just. Furthermore, fair trade emphasizes the modification of numerous commercial operations and policies in order to increase equity (What is Fair Trade? p.1).
Goals of Fair Trade. The main goal of fair trade is to assist in the promotion of sustainable development and the improvement of trading conditions. The purpose itself, however, is insufficient for ensuring long-term growth and improved trade circumstances. The objectives of fair Trade provide a solid foundation on which nations may collaborate in developing international commerce policies.
There are five main aims of international trade that many countries have in common. The first goal of fair trade is to enhance manufacturer livelihood and well-being by increasing market access and empowering producer organizations. Furthermore, international trade stakeholders should pay the same price for the products and promote continuity in order to boost producers’ livelihoods and well-being. Second, fair trade strives to provide underprivileged manufacturers with development possibilities by defending their children from exploitation.
The third goal of fair trade is to raise consumer awareness about the consequences of buying products from unethical international trade on producers who take part in such practices. Fourth and finally, through eloquence and respect, fair trade strives to encourage ethical trading partnerships.
Also, through social impartiality, economic protection and long-term standards established by fair trade, individuals who are marginalized and indigenous may benefit from their fundamental rights. Last but not least, fair trading seeks to reform the laws and practices of conventional international commerce in order to improve terms (Hayes 450-468).
How it works. A fair trade system has numerous merchants, producers, and organizations participating in the exchange of Fair Trade goods. Consumers, on the other hand, must purchase items that bear the logo or seal of fair trade to benefit from the method. The fair trade system is built on independent international principles and parameters that assure producers that their products are valued highly throughout foreign countries.
Through fair trade, consumers and producers join forces to achieve a commercial relationship based on shared aid and reliance. This compels every consumer or producer to comply with the specified criteria of a given trade fair organization, whether they choose to do so or not.
Take, for example, a coffee trade fair. The buyer and the producer agree on a price at which large quantities of coffee will trade. As a result, the buyer is forced to purchase coffee at a Fair Price as long as the price remains constant. It’s worth noting that under fair trade, goods costs represent the living wage; thus, equality is upheld even for those who are marginalized and indigenous.
Furthermore, consumers must assist producers in formulating a long-term business strategy that assures future progress and investment in individual farms. The producer, on the other hand, has no alternative but to provide excellent working conditions, protection, and health standards to employees. In order to guarantee equity, a democratic process must predominate over premiums sales at all times. Furthermore, producers undertake to create items in a ecologically friendly way, ensuring long-term development. Finally, both the buyer and the seller are obligated to uphold human rights at all levels in order for social justice and transparency to be achieved (Renard, 87-96).
Fair Trade Coffee. Coffee is one of the many items that are exhibited during the fair trade exhibition. Coffee is fortunate enough to be produced by a variety of farmers throughout the world. Coffee is essential to the economy of several developing nations. After producing coffee, farmers look for a higher price when they sell it.
This is not the case, however. The majority of farmers receive low pricing for their coffee, which is less than the cost of production. Many farmers ultimately fall into abject poverty and perpetual debt as a result of this problem. To assist farmers in escaping this predicament, fair trade has provided a viable option. A fair trade system begins with the farmer, who is the primary producer. For example, in Ethiopia, a farm employs workers to pluck coffee and pays them salaries for each pound of coffee obtained. The farmers will then sell the coffee to a local cooperative for washing and drying.
It is critical to point out that the farmer is a member of the cooperative in order to satisfy fair trade standards. The local Ethiopian co-operative will then weigh and package coffee by specific measurements (pounds) before sending it to Alternative Trading Organizations (ATOs) in industrialized nations.
Typically, a fixed price is paid to developing nations or alternative trading groups for selling coffee. This is one of the conditions for trade fair accreditation. An importer must comply with the stated fee. Otherwise, there would be no fair trade certification. Finally, the importer should give producers a credit for costs and technical assistance, allowing them to convert inorganic farming to organic agriculture in order to achieve greater yields.
The Alternative Trading Organizations may also be found in the coffee production process, roasting and packaging it before selling it to the final consumer through retail outlets or established ATO vending systems. As a result, fair trade of coffee benefits farmers in a variety of ways, including improved education, health, and community development (Global Exchange, p. 1).
Example of Fair Trade in Sugar. The sugar production industry has its own trade show. The majority of industrialized countries, such as the United States, produce sugar that is not consumed. For example, domestically produced sugar in the United States covers 80 percent of demand. This implies that imports from developing nations are required to fill the gap (20% more) .
The deteriorating worldwide market values, poor working conditions, and environmental depravation, on the other hand, pose major problems for farmers in developing countries. Fair trade sugar, nevertheless, guarantees that cane producers from developing nations are paid a fair price for their product. Furthermore, fair trade sugar creates a trading link between farmers and importers by paying them a premium. Furthermore, money received from the sale of sugar to importers is used to improve farmers’ livelihoods as well as boost their crop production (BBC News).
Farmers on non-fair trade plantations use pesticides without following regulations. In some of these farms, farmers burn the left sugar crops without considering the consequences of pollution. Farmers should follow standards for spraying pesticides and herbicides in trade fair farms to preserve the environment and provide ecological value while also complying with environmental protection measures intended to preserve the ecosystem.
According to a recent study, farmers who sell their sugar cane to certified fair trade organizations receive premium rate of return on top of expert knowledge on sugar cane cultivation and sustainable methods. Importers have recently begun importing sugar produced under fair trade, allowing producers to earn more money. This is due to the fact that high-end customers want to consume responsibly produced goods in order for the poor standards of the social justice system to improve.
It’s also worth noting that under this system, the fair trade price of items does not vary significantly because selling agents must follow set standards and regulations (Fair Trade Certified Sugar p.1).
Conclusion. A fair trade system is critical to the farmer since it allows farmers to make more money for their crops. Sugarcane and coffee farmers have benefited greatly from the higher prices that have resulted from this method’s implementation. Furthermore, because the products under a fair trade system are free of pesticides and meet high standards, they are in high demand. Fair trade goods not only assist impoverished farmers but also provide higher living standards for numerous families in developing countries by promoting income from fair trade.
Although I have limited expertise in this area, I’ve heard and read stories about fair trade in the past. According to my understanding, fair trade is international commerce in developing countries in which producers are paid a fair price. I understand that not all trade is legitimate, therefore workers don’t always get a decent cut of their earnings.
I chose this topic because I want to major in international business, and fair trade is an issue that affects the entire world. Fair trade started in the 1940s after World War II when churches offered crafts to wealthier communities in order to help the poor. Western Europe began importing goods from Eastern Europe in order to stimulate economic growth.
In the United States, the Mennonite Central Committee established a crafts business known as ‘Ten Thousand Villages.’ Such groups aimed to return money earned by intermediaries back to craftsmen in poor nations. The Max Havelaar Foundation was the first to start independent fair labeling in the Netherlands after coffee’s value plummeted in 1988.
In 1997, the Fairtrade Foundation was formed in Britain as a result of several organizations joining and forming it. In addition, the United States established its own fair labelling organization in 1998, known as TransFair USA. Many people question the advantages of fair trade because it has a price that may be seen as both beneficial and harmful.
Second, in order to stay in the coffee-making business rather than move into other industries that may be more profitable in the long run, costs are jacked up. Third, fair trade appears to be a good method to prevent rich countries such as Europe and the United States from competing with each other. Miller claims that fair trade has helped many people live better lives while simultaneously mitigating negative side effects.
The advantages of fair trade are outlined in both pieces. The disadvantages outweigh the benefits, pushing me toward free trade. I believe that the arguments put forth by both authors provide compelling evidence to show how unrestricted commerce does not benefit all farmers, especially the most impoverished ones. My view of free trade has changed following this assignment, although I still think it is useful in order to assure client purchases are returned to suppliers.
Introduction- People should buy ethical goods based on ideas of fair trade since it will help people live better and more sustainably, as well as allowing for sustainable development. Fair trade is concerned with assisting farmers and manufacturers in developing countries to achieve the level of sustainability they desire and deserve. Long-Term Direct Trading Relationships, Payment of Fair Prices, No Child, Forced or Otherwise Exploited Labor, Workplace Non-Discrimination, Gender Equity, and Freedom of Association are just a few examples of fair trade principles.
Sustainable development is a method to create a healthy environment while also supporting the production of ethically produced food. Because Environmental Sustainability is one of the ten ideals of fair trade, it’s vital to recognize the hard work that fair trade labels do. By optimizing use of renewable energy and raw materials while minimizing waste and pollution, ecologically produced food may help to minimize air pollution and care for the environment.
There are a slew of food labels that aid in sustainability and ethical production, including Palm-oil-free, Vegan, Organic, Free range with MSC fish, and most importantly Fair trade. When purchasing things, if any of the listed labels is displayed to the customer, he or she may be encouraged to support the label by assisting with sustainability and ethical production.
Agriculture is responsible for 26% of the world’s glasshouse gases, 50% of the planet’s liveable land, 70% of worldwide freshwater withdrawals, 78% of ocean and freshwater pollution, and 94% of global mammal biomass (excluding humans) in total. Sustainability is critical to the environment and by purchasing products that bear such labels as Fair Trade and fair trade principles, you may help make it a better place.
Diverse export crops produced by underdeveloped nations presently need to be certified under the Fairtrade program. As a priority objective, improving smallholder farmers’ socioeconomic situations has been identified in the FairTrade doctrine. Many studies in the past have revealed that, in many instances, Fairtrade has a beneficial impact on farmers’ sales prices and revenue. The influence of fair trade on food security and other aspects of household living standards is less consistent.
Household consumption expenditures and particular sorts of consumer goods and services usage may be investigated by using survey data from cocoa farmers in Côte d’Ivoire who have been certified under the Fairtrade system. Also, make a differentiation between households that are poor and those that are not. According to regression analyses with instrumental variables, raising aggregate consumption expenditures by 9 percent.
The greatest impact is seen among low-income households (14 percent ), but it is far lower in high-income families. Non-food expenditures have a significant influence on these outcomes. We found no significant effects when it came to food intake and dietary variety. Fairtrade has beneficial impacts on education and transportation expenses, relative to non-poor households.
By eliminating bad things, fair trade also helps with a number of positive aspects. Fair trading activities are utilized to combat poverty and promote long-term development. Producers who have been disadvantaged by the traditional trading system are aided by the fair trade movement.
That’s why fair trade demands clear management and economic ties. Producers’ independence may be enhanced through fair trade. Because producers and their marketing organizations can improve management skills, long-term partnerships are beneficial to them. Fair pricing takes into account the overall cost of production before being passed on to consumers, encouraging socially and ecologically responsible business strategies.
In the United Kingdom, there are 500 Fairtrade towns, 118 colleges, over 6,000 churches, and over 4,000 fair trade schools. In 2011, Fairtrade International’s fair trade system benefited more than 1.2 million farmers and workers in over 60 countries with €65 million in fairtrade premiums for producers to use in improving their communities. Fair trade is assisting a group of towns and nations to assist preserve the environment while also assisting the poor by making food better quality and contracts that farmers may approve and support.
To summarize, Fair trade may be able to assist farmers who don’t have a lot of money but can still help people by offering decent food at fair prices. Furthermore, with affordable prices, the farmers may better protect the environment and gain greater control over their lives. There are several benefits beyond that, including the fact that buying ethical food may benefit a large number of people and the ideals of fair trade. In the world, there are many towns and organizations using fair trade practices on a wide scale.