Th4.3: OS - Fairtrade Schemes

Question 1

What is fairtrade defined as?

Answer 1

being ‘a trading partnership based on dialogue, transparency and respect, which seeks greater equity in international trade’

Question 2

What are the key principals that goods being sold under the fairtrade label need to conform to?

Answer 2

a fair price, community development, fair working conditions and protecting the enviornment

Question 3

What does a fair price typically mean?

Answer 3

agreements are made to buy a guaranteed amount of produce over a period of time at a price which is above the market price when the agreement was made, giving producers stability and raising their income

Question 4

How is this system good?

Answer 4

means that child labour is not used and that production is sustainable and does not take place at the expense of environmental degradation

Question 5

A study carried out in Sri Lanka showed that those under fair trade had…

Answer 5

higher income and satisfaction, a greater understanding of the market and a more optimistic view of the future than those not under fair trade and able to save for future and invest

Question 6

What was the negative that the Sri Lanka survey showed?

Answer 6

that many still felt their income was insufficient

Question 7

However, how can fairtrade have an insignificant impact on the developing world?

Answer 7

in the long term, the higher price for fairtrade goods will increase supply and this could bring prices back down - all depending on price elasticity of supply

Question 8

What is also negatively argued about higher incomes?

Answer 8

argued that higher incomes reduces the incentive to diversify and keeps farmers engaged in low profit activities