Fair Trade- Chocolate

Fair Trade- chocolate Some things to think about What is meant by the term Fair Trade ? How does Fair Trade benefit farmers? What are the disadvantages to Fair Trade ?

Fair Trade - chocolate The FAIRTRADE Mark is the only independent consumer guarantee of a fair deal for producers in the developing world.

Fair Trade - chocolate Fair Trade is where producers are paid a price for their product that covers the cost of production - despite changes in the price at market. Fair Trade products are often more expensive because an additional 20% is charged to consumers, called a social premium , this is invested in the local communities producing the products.

How do LEDC producers benefit...
Farmers receive a fair and stable price for their products.
Sell direct to the global buyers, cuts out local markets, maximising profits.
Partial pre-payment allows more effective long-term financial planning.
Producers have the opportunity to improve their lives through a social premium .
Through co-operatives producers have greater collective bargaining with purchasers and supplies.
Helps diversify into new markets and products, from ones where there is overproduction , via cheap credit.
Help and advice with farming practices, thereby maximising yields.

How do MEDCs benefit...
Consumers know they are purchasing a product which is ethical, no child labour, organic, fair price, from co-operatives that are democratically run.
Consumers can directly trace their purchase.
Consumers can have a direct influence on the quality of life of LEDC producers through the goods they purchase.
LEDC producers have more income to purchase MEDC processed goods (?).

Potential Drawbacks....
Niche market , therefore has a limited impact.
It continues to support areas where there is overproduction.
Critics suggest it encourages further overproduction by non-fair trade producers, therefore lowering prices further.
It doesn’t encourage the development of secondary processing , which would generate higher prices.
Market share drops during economic difficulties.
It doesn’t solve the unfair trading practices which limit the development of LEDCs.

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Fair Trade- Chocolate

by TonyCassidy on Aug 11, 2010

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