Fair trade aims to address issues of hunger and poverty among farmers by creating direct communication between producers and consumers. It ensures farmers receive a fair price for their products and have more involvement in the market. Three main issues exacerbating hunger are rising food prices, the global financial crisis, and increasing crop failures due to climate change. Fair trade could help by providing stability for farmers during economic difficulties and allowing them to better withstand effects of crop loss. The document argues fair trade is needed to help farmers survive and developing countries become more productive food producers.

1. Fair Trade: A Social Responsibility
Emily Wiley
December 3, 2010

2. “On world food day one billion people around the globe will go to bed hungry” according
to the Fair trade foundation (Fair Trade Foundation, 2010). Fair trade could be the answer. Fair
trade is a system of trade that relies on creating direct communication between global businesses
and the producing communities that provide businesses with the food they sell. Through fair
trade, farmers will receive a fair price for their products, have more direct involvement in the
market place, and be able to keep up with environmental and labor rights standards (Green
America Come Together). It can also give consumers the power to purchase goods that will
support the fair trade movement and help farmers all over the world. Without these business
practices that lead to the achievement of economic, social, and environmental goals, small,
family owned farms in North America will soon face the problems that developing countries
around the world are already facing, such as hunger. These farmers are providing the goods to be
sold, yet they get an ever-decreasing portion of the profits from the food they grow and sell. Fair
trade started with Alternate Trade Organizations, or individual companies who commit to work
directly with producing communities in the U.S. and in developing countries to market their
products directly with consumers. These organizations created equal exchange, meaning they
take out the middlemen and provide direct communication between the producer, seller, and the
consumer. This provides a better price for consumers while also giving farmers their fair share of
the profits. The three main crises that will increase this growing problem are rising food prices,
the global financial crisis, and crop failures.
Rising Food Prices
The price of food is increasing by almost 40 per cent throughout the next decade, despite
the fact that there is a growing demand from these markets. Hunger is spreading along with food
insecurity due to “price spikes” and the economic financial crisis (Allen, 2010). Farm

3. commodity prices reached record peaks two years ago, have fallen, are expected to rise back up
again and will eventually drop to original levels from previous decades. Wheat and grain have
experienced a 15 percent to 40 percent rise, while vegetable oils are 40 percent higher and dairy
is 16 percent higher. Even more detrimental, corn prices have risen 20 percent, which leads to
problems for corn-fed livestock farmers, making the price of meat rise even though there is an
increasing demand for meat (Keefe, 2010). Another problem influencing the price of food is the
expanding biofuels industry, causing a greater need for wheat, coarse grains, vegetables, oils, and
sugar (Allen, 2010). One billion people are thought to be under nourished due to the rise in food
prices, and in order to solve this investments are needed to encourage these people that depend
on smallholder agriculture. This will increase profits and will “increase prosperity in poverty
stricken regions” (Allen, 2010). Also, agricultural production must become more productive and
needs a well functioning trading system to guarantee fair competition. This will also help surplus
food get to where it is needed most. For developing countries Brazil, China, India, Russia,
Ukraine, and many others, their policies will have greater importance in the conditions of global
markets.
The Global Financial Crisis
A recession is “a significant decline in activity across the economy, lasting longer than a
few months” (Investopedia). It can be seen in employment, industrial production, income, and
whole-sale retail trade. Whole-sale retail trade affects the food industry and fair trade, and
through the global financial crisis consumers and farmers alike will lose money, jobs, and
opportunities. Along with rising food prices, the recession is partly to blame for the growing
hunger that is taking place in parts of the U.S. and even more so in developing countries, since
consumers cannot afford the increase in food prices.

4. Crop Failures
Weather conditions are growing harsher for farmers and their crops due to the global
climate change, causing crops to fail more than ever. Examples are excessive droughts in Brazil
while heavy rains pound Canada and Europe. The U.S. is even experiencing drought in some
places (Keefe, 2010). The crop failures that Russia is experiencing could become more common
around the world due to the changing weather patterns, causing more heat and drought stress. In
China, “more than 35 percent of crops may fail through 2099” (Ruitenberg, 2010). The
adaptation of new crops that can better handle heat, water, and lack-of-water stress, along with
the modernization of farming methods and improvement of social and economic conditions
could prove to be beneficial to farmers all over the globe.
Fair trade can ensure a fair price to consumers while also giving producers their fair share
of the profit, while also helping in this time of economic need by allowing farmers and producers
to continue to get a profit while providing our grocery stores with necessary products. Crop
failure will not be as detrimental with the help of fair trade, seeing as how farmers will be better
able to afford to take care of their crops. Overall, fair trade will affect the global market by
improving the standards in which food is produced and sold. This issue is much more extreme
than I imagined, seeing as how farmers are losing their livelihood and more people are starving
every day. Fair Trade is the answer for these farmers to end their fight for survival, and is a way
to aid developing countries and help them to be more productive, while also helping consumers
to save money during this hard economic downturn.

5. Bibliography
Allen, K. (2010, June 15). Guardian.co.uk. Retrieved December 3, 2010, from Food prices to
rise by up to 40% over next decade, UN report warns:
http://www.guardian.co.uk/business/2010/jun/15/food-prices-rise-un-report
Equal Exchange. (n.d.). Retrieved December 3, 2010, from Fair Trade:
http://www.equalexchange.coop/fair-trade
Fair Trade Foundation. (2010, October 15). Retrieved December 3, 2010, from Business As
Usual Is Not An Option On World Food Day:
http://www.fairtrade.org.uk/press_office/press_releases_and_statements/october_2010/business_
as_usual_is_not_an_option_on_world_food_day.aspx
Green America Come Together. (n.d.). Retrieved December 3, 2010, from Fair Trade:
http://www.greenamerica.org/programs/fairtrade/
Investopedia. (n.d.). Retrieved December 3, 2010, from Recession:
http://www.investopedia.com/terms/r/recession.asp
Keefe, J. (2010, October 11). MoneyWatch.com. Retrieved December 3, 2010, from Food Fight:
Crop Failures Mean Higher Food Prices Worldwide: http://moneywatch.bnet.com/economic-
news/blog/macro-view/food-fight-crop-failures-mean-higher-food-prices-worldwide/2647/
Ruitenberg, R. (2010, October 7). Bloomsberg Business Week. Retrieved December 3, 2010,
from Crop Failures to Increase on Climate Change, Researchers Say:
http://www.businessweek.com/news/2010-10-07/crop-failures-to-increase-on-climate-change-
researchers-say.html