Fair Trade/ Global Exports- El Guabo CASE STUDY Flashcards
What is Fair Trade?
A collection of NGO’s (non- government organisations) that look to provide a GARUNTEED minimum wage whilst also allowing community development
What are “Fairtrade Cooperatives”?
Organised groups of farmers who are able to develop infrastructure, heath clinics and educational services.
When was the “Fairtrade Foundation” established?
1992
Aims included:
- setting a FAIRTRADE MINIMUM PRICE
- setting a FAIRTRADE PREMIUM= a communal fund that allows local economies to develop
How many Fairtrade producer groups have been established since the 1970’s in LIC’s?
more than 1,000 since the 1970’s
FAIRTRADE CASE STUDY?
In Ecuador
The El Guabo Association of Small Banana Producers
One of the largest producers of fair trade bananas am
FAIRTRADE CASE STUDY?
In Ecuador
The El Guabo Association of Small Banana Producers
One of the largest producers of fair trade bananas= exports around 30,000 BOXES OF BANANAS A WEEK
Community benefits:
(social)= healthcare benefits for families at the El Guabo clinic
=affiliation with social security system= retirement benefits
=increased education provision
(economic)= stabilised and guaranteed incomes
=guaranteed fair wages and LONG TERM supply contracts
Why was there a problem in Ecuador with banana exports?
- Ecuador is the world’s biggest exporter of bananas, but the wealth goes into only a few pockets
- 80% of the population live in poverty.
- Most bananas are bought by micro culture, global corporations and the prices are so low that survival is a daily struggle.
Why is the banana such an important fruit within global trade?
The worlds most popular fruit, but it can only be grown in low latitude, tropical regions=MONO CULTURE
“In 2013, 1/3 of all bananas sold in the UK had a certified Fairtrade mark”
This shows a shift within consumer markets as awareness and accountability has increased
Why isn’t the global banana trade sustainable?
(environment) = AIR MILES, INTENSIVE FARMING, ETHYLENE
(social) = low/minimum wages within the host country and a lack of education and healthcare
(economic)= Ecuador (the largest exporter of bananas) sell to corporate companies that cut down on labour costs through outsourcing= 80% of Ecuador live in poverty
Evaluate Fair Trade?
+gives farmers a fairer price for their goods
+allows farmers to increase their confidence in selling goods to companies/ businesses
+consumers get a better quality product that is more ethical
+social premiums included such as SCHOOL AND HEALTHCARE
- not ALL farmers can join Fairtrade because their products may not be popular enough
- tariffs can be placed on processed (made) goods such and soaps and this means farmers get less money
- companies that sell Fairtrade have been known to mislead customers on where the product comes from
- many Fairtrade products aren’t sold ONLINE= hard to compete with non-Fairtrade produce
Evaluate Fair Trade?
+gives farmers a fairer price for their goods
+allows farmers to increase their confidence in selling goods to companies/ businesses
+consumers get a better quality product that is more ethical
+social premiums included such as SCHOOL AND HEALTHCARE
- not ALL farmers can join Fairtrade because their products may not be popular enough
- tariffs can be placed on processed (made) goods such and soaps and this means farmers get less money
- companies that sell Fairtrade have been known to mislead customers on where the product comes from
- many Fairtrade products aren’t sold ONLINE= hard to compete with non-Fairtrade produce
Give two examples of food commodity TNC’s?
Banana
“Fresh Del Monte”
“Dole”
What does strong horizontal and vertical integration allow banana TNC’s?
Allows ECONOMIES OF SCALE
The use of “monoculture” allows competitive advantage
