Though fair trade is being increasingly affiliated with empowerment of the local and marginalised communities and acclaimed for offering an alternative formulation of trade relations and globalisation, the model is not without pitfalls. In this section, various challenges posing threat to the fair trade model – in theory and practice have been analysed.
1. Contradiction in terms:
The key challenges facing Fair trade arise from the inherent contradictions embedded within this initiative between movement and market priorities. According to them, this divide can be understood as FT being between “alternative civic/domestic conventions rooted in trust, place attachment, and social benefits and conventional industrial/market norms, practices, and institutions ruled by price and efficiency.” Thus there comes to be two analytical approaches: 1) a social movement, or development orientation that sees FT as an avenue for empowering the poor and marginalised based on social justice concerns and 2) a commercial, market, or corporate reform orientation that sees Fair trade as an avenue that largely upholds the values and institutions of the market. (T.Raynolds & Murray, 2007)
Fair Trade has been mainstreamed by the growth of the FLO international certification system and national labelling initiatives, which promote the sale of certified products in conventional supermarkets. This brings middlemen into picture like the large corporate distributors who might under price and undercut more socially oriented Fair trade firms. The mainstreaming strains FLO’s regulatory capacity, undermines the integrity of standards and procedures and affects the credulity of consumers as corporations infamous for their exploitative p...
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... due to growing sales figures, but equally importantly on a personal level: increasing the well-being of the most marginalized people, the Fair trade movement gives hope by improving trading conditions for farmers and workers in the developing world a little bit every day, hoping that one day, all ‘conventional’ trade will be Fair. Fair trade emerged as a social movement commitment to challenge global inequalities. This initiative’s engagement in the transnational terrain of alternative globalization carries great normative strength in theory. FT can gain prominence in the theorization of an alternative globalization and create a breakthrough in producer consumer relations, if the problems with ‘practice’ are understood and accommodated in ‘theory’ which is responsive to the needs of the local context, thereby kick-starting a revolutionary process of ‘development’.
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