13.1. Fair Trade Flashcards
1
Q
What is Fair Trade?
A
- both a concept and a specific company
2
Q
Fair Trade Concept
A
- An organised social movement and market-based approach that aims to help producers in developing countries and to promote sustainability.
- The movement advocates the payment of a higher price to producers as well as social and environmental standards.
- Fair trade hopes to rebalance trade in favour of LICs.
3
Q
Fair Trade Company
A
- Fairtrade works to benefit small-scale farmers and workers, who are amongst the most marginalised groups globally, through trade rather than aid to enable them to maintain their livelihoods and reach their
potential. - The Mark means that the Fairtrade ingredients in the product have been produced by small-scale farmer organisations or plantations that meet Fairtrade social, economic and environmental standards.
4
Q
Fair Trade Principles
A
Fairtrade’s stated aim is to “[change] the way trade works through better prices, decent working conditions and a fair deal for farmers and workers in developing countries.”
Fairtrade does this through ensuring that any company that wants to use its trademark must:
- Meet social, economic and environmental standards that are set for both companies and the farmers and workers who grow the products;
- For companies that buy Fairtrade products, include the payment of the Fairtrade Minimum Price and an additional Fairtrade Premium to invest in business or community projects of the community’s choice.
5
Q
Fair Trade Standards
A
The Fairtrade standards, that all companies and producers must adhere to, aim to:
- Ensure that producers receive a Minimum Price that cover their average costs of sustainable production;
- Provide an additional Fairtrade Premium which can be invested in projects that enhance social, economic and environmental development;
- Facilitate long-term trading partnerships and enable greater producer control over the trading process; and
- Set clear conditions of production and trade so that all Fairtrade certified products are socially, economically fair and environmentally responsible.
6
Q
The Fairtrade Minimum Price and Premium
A
- The Fairtrade Minimum Price is set to cover the cost of
sustainable production for that product in that region. - If the market price for that product is higher than the minimum price, then farmers and workers receive the market price.
- The Fairtrade Premium is an additional sum of money
which goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions. - Farmers and workers themselves determine what is most important to them.
7
Q
Economic Benefits of Fair Trade
A
- Fairtrade Minimum Price is supporting the farmers that grow products to become more income-secure and less vulnerable to poverty
- Gradually empowering communities to organise into
cooperatives and improve their negotiating position within the supply chain. This can enable them to negotiate a higher price for their product than the conventional market price - Improves access to agricultural services like organic training and premium markets. As a result farmers have an incentive to farm better and sell more.
- Additional income through the Fairtrade Premium is supporting better farming, strong cooperatives and investment in collective assets to improve crops and yields
8
Q
Environmental Benefits of Fair Trade
A
- The Fairtrade Standards cover key areas for environmental protection, including energy and greenhouse gas emission reduction, soil and water quality, pest management
- The Fairtrade Standards promote training for farmers, which can include advice on switching to environmentally friendly practices
- For some farmers, the Fairtrade (and organic) Standards have resulted in switches to less toxic pesticides, which, as well as being better for the environment, has a positive impact on producers’ health
- Can provide access to finance, support and expertise in tackling climate change, supporting long-term environmental sustainability
9
Q
Social Benefits of Fair Trade
A
- Farmers and workers who choose to participate in Fairtrade often feel a real sense of control over their future with greater power and voice
- Fairtrade can support workers to realise their rights and negotiate the terms and conditions of their work through trade unions and collective bargaining
- Fairtrade can provide producer support and expertise in deepening gender equality
- For workers employed on Fairtrade certified plantations, investment of the Fairtrade Premium into education, better housing, better schools and medical facilities is highly valued.
- Investment of the Fairtrade Premium by co-operatives in community development projects is improving the quality of lives of rural communities
10
Q
Arguments for Fair Trade
A
- Fair Trade helps producers diversify from markets where there is overproduction
- Consumers will know that their purchase will directly help improve the life of the producers
- The guaranteed price and social premium means that some of the poorest people are having their quality of life improved
- Fair Trade products have to be grown in a sustainable way; therefore purchasing these products helps protect the environment
- Fair Trade co-operatives organise people, therefore, benefitting the health of communities
- Fair Trade products raise consumer awareness of development issues
11
Q
Arguments against Fair Trade
A
- Fair Trade doesn’t encourage countries to develop their processing facilities - if they did they would get higher prices
- Fair Trade is a niche market for consumers, so it has a relatively small impact on improving the quality of life of farmers
- Fair Trade purchases tend to be ‘guilt buys’ - we can ignore the wider problems with poverty in the world
- Fair Trade products have limited ranges, and tend to not be widely available
- Purchasing of Fair Trade products drops during hard economic times, just the time when producers need their markets
- Critics argue that very little of the social advantages is passed onto the producers
- Some manufacturers buy limited amounts of Fair Trade produce - then state that their products are Fair Trade
- Fair Trade keeps farmers in markets where they are overproducing - if they stopped growing, the price would rise
- Supermarkets have been accused of making Fair Trade products artificially high to make higher profits - they do this because the consumer expects them to be more costly
- Some people argue that Fair Trade encourages non-trade producers to grow more - leading to lower prices and poorer quality of life for all producers
12
Q
Doi Chang Coffee
A
- Global recognition as a quality coffee brand.
- Several cafes across, including Silom and Sukhumvit.
- Grown in Doi Chaang, to the north of Chiang Rai.
- Doi Chaang Coffee is the only Thai-grown certified organic, Fair Trade coffee in the world.
- The model also goes much further than the official Fairtrade company does with certified products.
- It wasn’t always the case for the Akha.
13
Q
Doi Chang Coffee - Economic Impacts for the local community
A
- The price of Doi Chaang Coffee beans has risen from $0.5 to $10 per kilo;
- The farmers have been able to invest in higher quality production facilities (washing stations, roasters, warehouses) to produce a more reliable and better quality product (earning a higher price);
- The additional income has allowed the farmers to reinvest in agriculture and increase the cultivated area from 200 to 8000 acres;
- The additional income has allowed the farmers to invest in diversifying their businesses to generate additional revenue.
14
Q
Doi Chang Coffee - Environmental Impacts for the local community
A
- The additional income (alongside official Fair Trade and Organic certification) has allowed the farmers to invest in environmentally sustainable farming processes and ensure that local farmers are educated about these processes.
15
Q
Doi Chang Coffee - Social Impacts for the local community
A
- The Coffee Academy has been built by the Doi Chaang Company for the local farmers from the revenue from coffee. Teachings here emphasize methods of cultivation and processing, along with education on personal health, and finance for themselves and their
families. Classes are available to surrounding villagers; all hill tribe farmers may attend at no cost. - The higher price allows the Akha Hill Tribe farmers to be self-sufficient and maintain their heritage and cultural values whilst earning a profitable living.
- The additional income has allowed the local community to invest in providing better services (healthcare and education) as well as improved infrastructure in the Akha villages (improved roads, running water, energy and sewage systems.
