Does Fair Trade make a difference?
Disadvantages of Fair Trade
Many groups are always talking about the advantages but only a few out there who actually admit that there are also disadvantages of fair trade. Their claims actually have merit given that it is rare for something to have purely positive effects and no negative ones.
Fair Trade Products
Though many developing countries are continuing to sell their products on the market most of them continue to be sold as specialized products. Despite their best efforts, only a few have managed to reach the mainstream distribution channels. An example is soap being sold through companies that sell fair trade product is clearly more environment friendly and would benefit not only consumers but also those who manufacture them. However these kinds of soaps remain to be sold in specialty shops and not much in commercial stores.
One solution suggested to counter this disadvantages is to offer online shopping. This is a good idea considering that the products are come from developing countries. The problem is that the price will likely go up due to shipping fees and may not be affordable to the average consumer who just wants to buy one or two bars of soap.
Tariffs are a Disadvantage of Fair Trade
Tariffs or the tax put on exports and imports is another one of the disadvantages of fair trade. In most countries, the tariff for non-processed good remains lower than processed ones. What this means that instead of exporting roasted coffee for instance, a farmer may opt to simply export coffee beans in order to remain profitable. This choice however brings to light two issues. First the beans will be processed by another company which means it has lost its fair trade capability. Second because it will be more profitable to export raw materials or non-processed goods, developing countries may become hesitant to put up facilities needed for processing. Not only do they lose to multinational companies but they also encumber their possible development.
Fair Trade Certification
Another issue is on the use of the certification. An example is when a farmer decide to export the coffee beans. The company that buys the beans can have the Fair Trade certification on its final product, but it is the one that enjoys all the benefits derived from it. Companies using the certification also tend to confuse consumers as to where the products actually comes from. One can argue that this is unfair but it is hard to find a legal way to stop it.
Disadvantages of Fair Trade has a long way to go
The world still has a very long way to go if we are to fully maximize what fair trade is all about. Despite the disadvantages of fair trade, it is important to keep in mind that there will always be ways to solve these disadvantages.
5 Benefits of Fair Trade Everyone Should Understand
A growing number of consumers do understand, in a rather vague way, that fair trade, and buying fair trade products, is a good thing, whether it’s coffee, clothing, shoes or something else. However, accepting that it is ‘good’ isn’t enough to swing many in their purchasing decisions, a better understanding of fair trade and its benefits is called for. Here’s a run down of five of the biggest benefits of fair trade that will help further that understanding.
Individual Income Increases
Fair trade increases the income of the farmers, craftsman and others that participate in it. They are paid for their goods at an agreed upon, set price that all parties agree is fair and then given access to less complicated distribution channels, allowing them to keep more of their profits for themselves.
Producers Gain Access to a World Market
Farmers, craftspeople and others who live and work in small communities in developing countries benefit when they have access to the rest of the world, its markets and its consumers. This is exactly what fair trade provides. A small fair trade coffee producer from Costa Rica, for example, has the chance to get their products into the hands of people in say, Kansas City, Missouri, far away in the US, something that would have been unthinkable just a few decades ago.
Fair trade producers are, as a part of the agreements that grant them their certifications, held to higher environmental standards than many who mass produce goods. Farmers are limited in the number of pesticides they can use and complete transparency is required in detailing growing and production methods. This results in environmental benefits not only for the country the good are being produced in but for the world in general.
It’s a basic financial truth; those who make more spend more. As those involved in fair trade increase their income the positive effect is passed on to the communities they live in. Often fair trade pricing includes a premium that covers the costs of local projects including the construction of schools, hospitals and other community centres, educational scholarships and even low cost loans that allow producers to expand their operations.
The world is a big place and even with the rise of the Internet far too many people are unaware of just how others live, the struggles they face and the help that they need. When purchasing fair trade goods, it’s far from unusual for consumers to become more interested in where these products came from, who produced them and how those people live. This increased awareness is good for everyone, as it fosters a global understanding that is desperately needed right now. These are just some of the benefits of fair trade, there are many more. Understanding these basics however is a great start for anyone who has ever wondered if by opting to buy fairtrade goods they are really making a difference.
One of the major benefits that the fair trade movement has given producers is that it has promoted fair trade justice. The large and rapid growth in consumption of fair trade products means that many consumers nowadays are clearly concerned that producers from developing countries get what they deserve. However because international trade rules continue to be in favor of rich countries, majority of people in developing countries continue to live in poverty.
Fair Trade Benefits
It seems that even today, fair trade can only be successful if the conditions are right. Though many farmers, producers and workers around the world are clearly benefiting, there are those that continue to await the justice due to them. In other areas there are still people that continue to be at the mercy of these trade rules.
Fair Trade Coffee and Bananas
The reason for the campaign is that the current situation has glaringly showed that even with Fair Justice Act the system is still not working. Consider coffee, the price of it remains low because of oversupply. This is not just because more farmers are into growing coffee, but because of fair trade there are also other factors involved. One such factor is that some countries were forced to raise cash crops as a condition of obtaining loans from the World Bank. There is also oversupply in sugar which is due to trade rules that allow American sugar producers to receive subsidies. An advantage the sugar producers from developing countries do not have.
One of the most fought over fair trade products is bananas, this is an example of another product where the system has failed. Some Latin American countries continue to practice the use of pesticides and even exploitative labor. Though this means that they are not fair trade certified, their production costs are lower compared to producers and farmers that practice fairtrade. As a result some have opted to grow other products because they can’t compete with the low production costs.
Supporting Fair Trade Suppliers
There is more to the issue than just supporting and buying fair trade products. We, as consumers, must not only ensure that fair trade justice is present, but that our government itself must support trade rules that are fair for everyone. This way we make sure that we not only get the benefits that fair trade has to offer, but we also help the producers and farmers make their lives better..
When you buy Fair Trade products you only spend a little bit of extra money on those products. But that little bit of extra money that guarantees a fair wage to the artisan or craftspeople who make those items adds up to massive amounts of money that is used to fund huge change. More than 4 billion dollars are spent on Fair Trade products yearly.
The huge buying power of consumers who come together to purchase Fair Trade items has directly impacted countless communities both here and in developing countries. It’s easy to tell yourself that the extra money you pay for items won’t make a difference in the long run as a way to justify buying a lower priced item from a chain discount store. But the truth is that the extra money you spend on fairly produced items makes an enormous difference in the world. When you buy these products you are making a difference in the world.
Funds go directly to Fair Trade Artisans
That’s because the premiums that you pay on Fair Trade items go directly to the person that made the product, not to the shareholders of some giant global corporation. Your money is not paying for some executive’s private jet or fancy home. It’s putting food on the table for the family of a craftsman. It’s funding a public school in a developing community. It’s giving a woman the money she needs to leave her abusive husband and feed her children. It’s promoting growth and independence in communities around the world. It’s also helping the environment. The crafters and artists who create these products are not pouring chemicals into river or creating massive environmental damage with huge factories. They are using locally made and sustainably produced materials to create beautiful fairtrade products that are very high quality and will last.
It changes communities
Buying Fair Trade also changes the way that communities are run. When a small business prospers because of the program that money and success impact the entire community. That one small business that is supported by the purchases that you and people like you make will provide employment for local workers, money for the local community to use for health care, education, and streamlined services like water and sanitation. These small businesses will also be able to mentor other small business owners and teach those business owners the skills they have learned from the Fairtrade program. When small businesses thrive the community thrives. When these communities thrive the country thrives. When the country thrives and contributes to the global economy other countries thrive. Fair Trade is the heart of a new type of consumerism – consumerism that cares.
Are you a thoughtful consumer?
The global recession rocked many countries, and many of them are still trying to recover. But the recession also made people realize how interconnected people are with each other, with other communities, and with other countries. These days consumers are more thoughtful about what they buy and really want to know that their purchases have meaning because. When you buy ethically produced products for fair prices you are helping other people just like you to follow their dreams and help their communities. Together everyone can build a stronger economy and a brighter future.
Benefits of Fair Trade Products
It can be a challenge to find the extra money for Fair Trade clothing and products if you are on a tight budget. Sometimes it may seem like it’s just easier to buy the items you need from discount stores. But you can choose to support it, even on a limited budget. With a little planning and a little ingenuity you can find ways to stick to your budget and still only buy certified items. The higher quality of these items means they will last longer, so a little extra money spent now means that you won’t have to replace the item in a few months and spend even more money. Think of the long term benefits of shopping for these items instead of the short term loss of money. The sacrifice of paying a slightly higher price up front for well-made ethically produced items is worth it when you remember what you are a part of when you buy these handcrafted sustainably produced items.
There has been an interesting discussion over at the poverty matters blog. Vidal wrote that IEA (Institute of Economic Affairs) has attacked fair trade products and their certification, suggesting that it is misleading consumers, expensive and an unproven idea.
So, the grim forces of reason and neoliberal economic efficiency must be worried. It’s only November and the Institute of Economic Affairs has already launched a vicious, 130-page report detailing how fair trade is “costly, opaque and substantially unproven”. According to the IEA, it distorts markets, misleads consumers, holds back social development, celebrates backward forms of production, relies on inefficient cooperatives and has high administration costs. Oh, and it is neocolonialistic and paternalistic, not a strategy for long-term development and its claims are exaggerated.
Fair Trade is 100% better than doing nothing
I find it interesting when I hear what the sceptics argue that Fair Trade is not going to solve poverty. Show me research that has ever suggested that it will solve global poverty? The point I’d like to make is, “Fair Trade is 100% better than doing nothing“ or what was excellently mentioned in the comments by ‘afterthebrain’; “Every worker who receives a fair wage for his or her toil is a small but important victory for humankind.”
Interestingly though, I’ve seen a rise in manufacturers of products such as coffee and fair trade shoes suggesting that their product is “Fairtrade”, failing however, to get certified. To me, this is what is misleading to consumers. People need to be educated and companies need to become certified. That’s my two-cents worth about Fair Trade. Steph.
The many benefits and pros of fair trade clothing, fair trade shoes and products are clear once one learns that its main goal is to alleviate poverty in developing countries and inculcate the value of sustainable development. It aims to create more opportunities for producers facing economic disadvantage over multinational companies. Because it also aims for sustainable development, both workers and producers are being offered much better trading conditions than before. Here we aim to answer “What are Trade Benefits of Fair Trade?”
Five Benefits of Fair Trade can easily be seen
First benefit is that it increases the income of the producers of the farmers. This is achieved through two steps –
- The price of the goods are paid at an agreed and guaranteed fair price for the producer and manufacturer.
- The distribution channels involved in marketing the goods is also reduced thus the producers get a larger share from the price of the goods rather than the distribution company.
Second benefit is that because they now have a larger share of the pie, both farmers and workers have extra income with which to improve their lives. The price of a specific good is typically computed to cover the cost of both sustainable production and livelihood. A premium is also added to the price to be used as investment for development projects. These projects include building schools, funding scholarships and even used to fund low-interest loans for farmers and workers.
Third benefit is that is involves greater environmental protection. The Fair Trade Certification being used to market the products does not only show where the good comes from and who benefits from it. It also tells consumer how the good was made and manufactured. For agricultural goods for example, the use of some pesticides is not allowed and hence giving consumer greater satisfaction in knowing that the goods are safe.
Fourth benefit is the advantage that farmers are able to obtain a better and stronger foothold in the world market. Because buyers deal directly with the farmers, the farmers are able to get good prices for their products in the market.
Fifth benefit is that it provides a closer link to the producers and consumers. Most consumers nowadays are environmentally conscious and thus want to know more about their products. In addition, consumers also want to know just how much the ones who originally make the products are getting. Thus in the end consumers become satisfied with the quality of their products and the farmers get satisfaction from knowing that they got paid accordingly for the goods they produced.
Benefits of Fair Trade Products
These are just a few of the many benefits of fair trade has, for most consumers, knowing where the product came, who benefits from it and how it was made makes the purchase all the more fulfilling.