Fair Trade is a worldwide movement based broadly based on the theory that trade between rich and poor should be based on notions of social and economic justice, and which advocates that small farms and farm workers in developing countries receive a fair price in return for their agricultural and handicraft products. Although the fair trade movement dates to the 1940s, it became popular in parts of Europe in the 1960s and more recently has taken hold in the United States. Fair trade is supported by consumers willing to pay a small additional price for goods knowing that the indigenous producers of the goods, living and working under the poorest conditions, received a fair price for their product. Some fair trade farms consist of small cooperatives, with individual families farming only a couple of acres. Typical fair trade products include coffee, tea, bananas, wine, herbs and spices, honey, rice, and cocoa. Standards, minimum prices, inspections, and certifications of producers and traders are the responsibility of private, nonprofit organizations. Fair trade standards also require that certified farms practice sustainable farming techniques, follow rules on the use of pesticides and recycling, refrain from using child labor, and encourage farm children to attend school. These advances are made possible by the higher prices participants receive for their products. By the early 2000s, labeling standards for fair trade– certified products became standardized, so that consumers could recognize fair trade products in stores. Participants in fair trade include the workers and producers themselves, the brokers and traders who deal in the products, the retailers and vendors in richer countries, and consumers. Some of the most important fair trade organizations are the Fairtrade Labelling Organizations International, the European Fair Trade Association, the International Fair Trade Association, and TransFair USA.
1. Would you be willing to pay a slightly higher price for sugar, coffee, fruits, and basic commodities, knowing that their producers, farmers in Central America or Africa, were paid an internationally established “fair price” for their labors? Do you believe that consumers will make ethical choices in the marketplace, or economic ones?
2. Fair trade is based on the guarantee of a fair price. How is a “fair price” determined? What is the role of independent fair trade organizations in establishing price?
3. Critics suggest that fair trade does not address the root causes of poverty. Some economists argue that low prices for basic commodities, like coffee, result from oversupply. Moreover, fair trade also does not guarantee access to investment or technology. Do you think the fair trade movement can be successful in rooting out poverty?
4. Although fair trade products account for a tiny volume of world trade relative to the total volume, they do focus concern on the plight of poor farmers, farm workers, and producers in agrarian regions. Some of America’s largest and best-known retailers are selling fair trade products, including Sam’s Club, McDonald’s, Dunkin’ Donuts, Starbucks, and many grocery chains. Based on your research and outside reading, what do you think the impact of fair trade programs can be?