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Essay on fair trade ethics
The problem of fair trade
The problem of fair trade
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Fair trade is defined as “a movement whose goal is to help producers in developing countries to get a fair price for their products so as to reduce poverty, provide for the ethical treatment of workers and farmers, and promote environmentally sustainable practices” (Merriam-Webster Dictionary, 2014). Whether or not we can ensure the fair trade of coffee in exchange for a good living brings up a lot of discussion and controversy in the trade and food industry. Many studies have been done to determine how beneficial this fair trade agreement is to coffee farmers and workers in third world countries. Research in coffee farming proposes that farmers do not gain from the benefits of fair trade in the ways they are presented in economically developed societies. (Wilson, 2013) This raises questions as to why peasant farmers participate in fair trade coffee networks despite these claims. The possible practicality of fair trade agreements with large corporations and third world countries has been proven to exist. If only a single kind of coffee was sold, the market would opt for the more expensive coffee, which would allow better control of the treatment of all workers. This would also remove the two classes of market wages from normal coffee and fair-trade coffee to allow more focus on ensuring the profits are evenly distributed between the farmer and the workers in third world countries. Singling out the coffee industry would even give the ability to lower the shelf prices to advantage to the consumer. However, this only works when all partners involved cooperate and in today’s world, it is not so realistic. In the current market, the trade methods are segregated in a way that does not always promote what is in the best interes... ... middle of paper ... ...rary.mtroyal.ca:2048/login?url=http://www.jstor.org/stable/10.1525/sp.2012.59.1.94 Haight, Colleen (2011). The Problem with Fair Trade Coffee. Stanford Social Innovation Review, pp. 1-7. Retrieved from: http://www.ssireview.org/pdf/2011SU_CaseStudy_Haight.pdf Hird, Christopher (Producer), Francis, Marc, & Francis, Nick (Directors). (2006). Black Gold [Motion Picture]. Ethiopia. Definition of Fair Trade. (2014) Merriam-Webster Dictionary. Retrieved from: http://www.merriam-webster.com/dictionary/fair+trade?show=0&t=1391730800 Wilson, Bradley. "Delivering the Goods: Fair Trade, Solidarity, and the Moral Economy of the Coffee Contract in Nicaragua.” Human Organization 72, no. 3 (2013): 177-187. Retrieved from: http://library.mtroyal.ca:2048/login?url=http://search.ebscohost.com/login.aspx?direct=true&AuthType=ip,url,cookie,uid&db=bth&AN=89985527&site=ehost-live
Wright, L. T., & Heaton, S. (2006). Fair Trade marketing: an exploration through qualitative research. Journal of Strategic Marketing, 14(4), 411-426. doi:10.1080/09652540600948019
Stenzel, P.L. (2012) the Pursuit of Equilibrium as the Eagle Meets the Condor: Supporting Sustainable Development through Fair Trade. American Business Law Journal. Retrieved from http://eds.a.ebscohost.com.proxy.devry.edu/eds/pdfviewer/pdfviewer?sid=5a7e6902-f838-4caa-8415-7f12751748da%40sessionmgr4005&vid=4&hid=4203 on May 23, 2014.
Fair trade should give protection to governments from exploitation. For example, small farmers can be protected by giving government food sovereignty. An article from the Chicago Democratic Socialist Organization proposed, “The agreement must return to governments the ability to safeguard food sovereignty by protecting family and small-scale subsistence farmers” (Chicago Democratic Socialist). Rewriting the agreement can protect the small farms and retain jobs for farm workers. The article further addressed an issue discussed previously, “Large-scale importation of basic grains into Mexico is a major cause of the economic collapse of rural communities, which forces millions of undocumented migrants to seek work in the USA” (Chicago Democratic Socialist). Therefore, it would solve problems both in the US and Mexico. It will take efforts of the many to renegotiate NAFTA, and many other terms needs to be added. The general direction should focus on protecting the interest of the general public by restricting corporate powers. Fair trade will reduce the problems caused by
The Wall Street Journal, Boston Globe , and the Economist as well as many other media outlets of record were all in consensus when they declared the onset of coffee crisis in October 2001; farmgate prices had sharply dropped reaching a thirty-year low of $0.39 per pound in This price was below the cost of coffee production at the time, listed at USD 0.60 per pound.(Economist 2001) Price declines are not such an uncommon occurrence, but what is more troubling is that the cash market for coffee suffers from high price volatility. For a more detailed look please see Appendix 1: Cash Price Variation. Coffee producers , who are mainly located in developing countries , are highly vulnerable to price risk in the cash market , yet their profits in relation to their risk exposure has been steadily declining. In a 2001 study conducted by the European Fair Trade Association (EFTA)- an organization that promotes the sale of products that ensure price security for marginalized commodity producers- the general finding was a declining share of trade revenues from coffee remained in the coffee producing countries. Although the international coffee market has grown from $30 billion annually in the 1980s to $55 billion in 2001, in aggregate coffee producers have seen their share drop from $10 billion to $7 billion in 2001 (Renkema 59).
People can analyze the different between Fair Trade and Free Trade. Cafedirect just need to maintain
Fair trade is defined as the practice of directly benefiting producers in the developing world by buying straight from them at a guaranteed price. As a first world country, the United States is enamored with the concept of helping those in need, and fair-trade products are an essential component to that idea.
McCuen, Gary E. The Nicaraguan Revolution. Hudson, Wisconsin: Gary E. McCuen Publications, Inc., 1986. Print. The.
In the United States, coffee is the second largest import (Roosevelt, 2004). Furthermore, the United States, consumes one-fifth of all the worlds¡¦ coffee (Global Exchange, 2004). The present industry is expanding. It is estimated that North America¡¦s sector will reach saturation levels within 5 year (Datamonitor. n.d.). According to National Coffee Association (NCA), 8 out of 10 Americans consume coffee. In addition, it is estimated that half of the American population drinks coffee daily. The international market remains highly competitive. It is estimated that 3,300 cups of coffee are consumed every second of the day worldwide (Ecomall, n.d.). The latest trends included dual drinkers, an increase in senior citizens...
The movement particularly emphasizes on exports from developing countries to developed countries, with products such as handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers and gold. Moreover, coffee is one of the most widely traded goods in the world. For many developing countries, coffee trade is an important source of income. Producers can provide a better trading and improve terms of trade. Moreover, this allows producers to improve workers’ living environment and future life in general (De Pelsmacker, Driessen and Rayp, 2005).
An article in the Seattle Post, describes the alliance that Starbucks is making to ensure that a sustainable supply of high quality of coffee is produce in Latin America. "Starbucks President and CEO Orin Smith said the alliance is partly his company's effort to pass on the "high price" of a cup of coffee to farmers." (Lee, 2004). He states that the high price enables them to pay the highest price to the farmers. Though the high prices to suppliers can demonstrate that money get to farmers with being diverted. Starbucks overall goal with this alliance is to buy 60 percent of its coffee under the standards agreed upon by 2007. "The agreement reflects the growing power of the premium coffee market and efforts to exploit it for the benefit of small farmers" (Lee, 2004).
In order for international trade to work well, governments must allow the world market to determine how goods are sold, manufactured and traded for all to economically prosper. While all nations may have the capability to produce any goods or services needed by their population, it is not possible for all nations to have a comparative advantage for producing a good due to natural resources of the country or other available resources needed to produce a good or service. The example of trading among states comprising the United States is an example of how free trade works best without the interve...
Fair Trade is considered as an alternative trading system, which aims to protect the economically disadvantaged producers, especially in developing countries. It provides transparency and respect in international trade (Gingrich and King, 2012). Besides, Fair Trade also contributes to sustainable development by offering better trading conditions for marginalised producers and workers and securing their rights (Mohan, 2010).
Two common products that are Fair Trade Certified are Cocoa and Coffee, each of which contains problems that producers face but gain benefits from Fair Trade. Fairtrade International states that cocoa is grown in tropical regions of more than 30 developing countries, such as West Africa and Latin America, providing an estimate of 14 million people with livelihood. Fair Trade Standards for cocoa includes no forced labor of any kind - including child labor and environmental standards restricts the use of chemicals and encourage sustainability. A problem cocoa producers face is the lack of access to markets and financing. Since cocoa is a seasonal crop, producers need loans to meet the needs for planting and cultivating their crop. With this in mind,...
Free trade is a policy that relies on the concept of comparative advantage that when comparing two countries one of those countries will have the capability to make a product that is better than the other country. So it is best if each country focuses its efforts and resources into one product to increase the economic activity for both countries. The determination of who produces a product better is based on the open market without intervention from a government who may try to control a trade by imposing government protective measures such as tariffs. The World Trade Organization has been tasked with monitoring free trade, but it has been noted that their policing has not been effective to stop such interventions. Free trade not only relies on a laissez-faire approach but also on assumptions of conditions. The assumptions used by many for economic theories are not always accurate but rather the justification for using the assumptions is so that economic theories can be applied for the greater good of an economy.
The main function of the company is its transaction activities which develop supply chain systems through which bind producer cooperatives in different countries. Besides that, the company with their strategies in the supply chain is trying to transform relations of production and trade. The trend of Starbucks’ marketing is murky for the distinction between its own system of supply chain and that of Fair Trade is the potential to ‘water down’ enablement results obtained at production places where they deviate from consumer purchases to corporate supply chains (Macdonald, 2007).