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Fair Trade- Chocolate


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Fair Trade- Chocolate

  1. 1. 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 ?
  2. 2. Fair Trade - chocolate The FAIRTRADE Mark is the only independent consumer guarantee of a fair deal for producers in the developing world.
  3. 3. 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.
  4. 4. <ul><li>How do LEDC producers benefit... </li></ul><ul><li>Farmers receive a fair and stable price for their products. </li></ul><ul><li>Sell direct to the global buyers, cuts out local markets, maximising profits. </li></ul><ul><li>Partial pre-payment allows more effective long-term financial planning. </li></ul><ul><li>Producers have the opportunity to improve their lives through a social premium . </li></ul><ul><li>Through co-operatives producers have greater collective bargaining with purchasers and supplies. </li></ul><ul><li>Helps diversify into new markets and products, from ones where there is overproduction , via cheap credit. </li></ul><ul><li>Help and advice with farming practices, thereby maximising yields. </li></ul>
  5. 5. <ul><li>How do MEDCs benefit... </li></ul><ul><li>Consumers know they are purchasing a product which is ethical, no child labour, organic, fair price, from co-operatives that are democratically run. </li></ul><ul><li>Consumers can directly trace their purchase. </li></ul><ul><li>Consumers can have a direct influence on the quality of life of LEDC producers through the goods they purchase. </li></ul><ul><li>LEDC producers have more income to purchase MEDC processed goods (?). </li></ul>
  6. 6. <ul><li>Potential Drawbacks.... </li></ul><ul><li>Niche market , therefore has a limited impact. </li></ul><ul><li>It continues to support areas where there is overproduction. </li></ul><ul><li>Critics suggest it encourages further overproduction by non-fair trade producers, therefore lowering prices further. </li></ul><ul><li>It doesn’t encourage the development of secondary processing , which would generate higher prices. </li></ul><ul><li>Market share drops during economic difficulties. </li></ul><ul><li>It doesn’t solve the unfair trading practices which limit the development of LEDCs. </li></ul>