Executive Summary
The main purpose of this essay is to enlighten the reader about the genuine efforts an organisation called Fair Trade is undertaking to streamline global trade and to offer the growers of agricultural produce a fair deal for their produce. It is also intended to attain socio-economic benefits for the people in terms of channelising savings and investments into desired channels that could benefit a large cross-section of global masses and endow a host of infrastructural development.
In a competitive agro-based world, it is seen that producers are at the mercy of middlemen and overlords. It is seen that agriculturists are provided low margins for their crops and thus find it difficult to earn a modest livelihood. Most small-time coffee growers, for instance, are living hand to mouth existence, and many of them have abandoned coffee growing for seeking gainful employment in cities.
Introduction
Fairtrade is a movement that promotes equitable and just conditions in the production and trade of goods. Making a trade fair involves standard living wage, autonomous cooperatives, direct trading relationships, simple methods by which growers could gain admission to loan and technical assistance, clear business policies and “environmental sustainability” (Fair Trade Involves. 2008).
Concept of fair trade
Fairtrade addresses issues regarding inequality in world trade with an alternative approach that focuses on sustainable economic development of marginal agricultural and cash crop producers. The Fairtrade Labelling Organisations International (FLO), an international body with 20 international members, including Europe, North America, Japan, Australia and New Zealand. It aims at supporting producers to improve their basic living conditions by guaranteeing a fair, minimum return for their produce.
Globally, around five million people are benefiting from fair trade, which is working in 58 countries. Almost 500 producer organisations are being supported (Education for citizenship: Fairtrade: Introduction: What is free trade).
Operating benefits at procurement and trading levels
The ready acceptance of Fairtrade envisages it as a mass farmer movement and not really an institution. It is meant to reduce differentiation in the pricing of major products, including cash crops like tea and coffee. It operates at two levels, the first being at a procurement level, in which the rights and dues of small and marginal farmers are protected, and continuous improvement of practices are encouraged in order to improve profits.
At the trading levels, it could be seen in terms of providing guaranteed returns to growers to cover their production costs, an extra provision to ensure development costs and product improvements.
Main items in agenda of Fairtrade
The main food and non-food produce that is being dealt with are: Foods like “Bananas, cocoa, coffee, dried fruit, fresh fruit & fresh vegetables, honey, juices, nuts/oilseeds and purees, quinoa, rice, spices, sugar, tea, wine,” and in the non-food category, they are “Cotton, cut flowers, ornamental plants, sports balls.” (Fairtrade foundation: FAQ: About Fairtrade products in the UK).
Socio-economic and infrastructural benefits
There are no doubt tangible benefits for plantation workers and their people. The benefits are very tangible: better access to education, better schooling and educational facilities, increased health awareness and management systems, better water and hygiene systems, better dwelling places, enhanced local ecological management and a fillip to all infra-structural amenities that are part and parcel of modern living, whether in urbanised, rural or semi-rural sectors of the economy.
The main idea of Fairtrade is to inject all-around growth, improvement and better living for the people, with efforts for improving overall living conditions for people.
Fairtrade reaches further than ethical trade. It guarantees fair terms of trade and fair prices, supports and encourages workplace democracy and cooperatives, enables people to take more control over their own lives and embodies in so many ways the best principles of people-centred development. (peopleandplanet.net: people and poverty and trade: 2007.
However, it could be seen that although the mission and visions of Fairtrade are indeed laudable, in terms of reducing the world’s poor and pushing back the frontiers of marginalisation and needs, in most cases, it is seen that profits accumulate into the coffers of transnational corporations that are obsessed with increasing shareholder values. Whether such companies would like to share their growth and prosperity with a less fortunate section of societies in terms of enhancing profits and reducing prices remains to be seen.
Conclusions
While many echo the sentiments of growers and consumers, to say that, ultimately, it is the larger players who are liable for market distortions and abnormal hikes in prices. To take an illustration, coffee prices are subject to price vicissitudes over a period of time. Most coffee companies hike prices when their production costs increase, passing on the burden to the ultimate consumers, but when the prices of coffee fall, the benefits passed on to coffee drinkers are minimal. Thus, it could be inferred that everything said and done, whether movements like Fairtrade would have a sustainable endurance and impact in the global marketplace is something which only time can tell.
Bibliography
Fair Trade Involves. (2008). [online]. Fair Trade.
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