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..