Fair Trade free essay sample

The aim of this essay is to discuss about the comment made by the Adam Smith Institute (2008) about how ‘The Fair-trade movement achieves virtually nothing in terms of reducing world poverty’. Fair trade is a standard that is set to support the developing countries exports, it is to improve the workers in a developing country’s working conditions, fair payments which help them towards development and planning of their future that may help poverty. It also helps them to sell products to developing countries. Fair trade products come mostly in products such as coffee, chocolate and bananas the packaging mostly shows smiling workers that gives the impression that fair trade is such a worldwide success, however Adam Smith Institute (2008) states that ‘Smiling photos may improve turnover, but they cannot speak for the overall effectiveness of Fair-trade certification as a means of poverty relief’, the majority of fair trade consumers do not actually know the extent to which Fair trade is actively reducing worldwide poverty. Usually, in the traditional market system, commercial buyers buy goods from farmers nd producers, and they pay a immorally low cost for buying those goods in bulk. Which makes it very difficult for producers and farmers to cater to their personal needs. With Fair Trade Certified products, a core price for the goods is set by the international Fair Trade Labeling Organization. The base price endeavors to provide for the cost of production and a living wage to cover the basic necessities such as: food, shelter, clothing, education, and medical care. (Fair Trade Federation, Fair Trade Federation Code of Practice, Fairtradefederation. rg) So what exactly makes the Fair Trade System different? What is Fair Trade exactly? While there is no concrete definition, the movement strives to assist small scale producers, the people who are at the bottom of the economic ladder, who otherwise do not have access to economic mobility. It enables producers partial ownership of the business, equal input and return from the market. The Fair Trade Movement strives to improve quality of life for producers and their community. It allows farmers to obtain a better and stronger ay in the world market because buyers are able to deal directly with the farmers, and the farmers are able to get fair prices for their products in the market. The consumers and producers are insured Fair Trade prices through the Fair Trade USA, which screens importers and retailers to guarantee that they abide by Fair Trade rules and regulations. The Fair Trade price of a specific good is computed to cover the cost of both sustainable production and livelihood. The Fair Trade Movement also cuts the amount of distribution channels involved in marketing the good. This means that, essentially, the middle man is cut which allows the producers to receive a larger share from the price of the good. Additionally, for every Fair Trade product sold the collaborator also collects a set amount of money, called the social premium, which is then reinvested into community development projects democratically chosen by the cooperative. (Fairtrade Foundation, The Fairtrade Premium, fairtrade. org. uk) There are many examples of Fair Trade development projects such as: building of health are clinics and schools, starting scholarship funds, fund low-interest loans for farmers and workers, building housing and providing leadership training and womens empowerment programs. Workers are also guaranteed freedom of association and sate working conditions, entorcement ot human rights and child labor laws as well as encouragement of womens participation in leadership of cooperatives. Fair trade also increases environmental protection. Fair Trade helps farmers become better caretakers of the land they work and live on. Their nvironmental standards are one of the strictest in the industry. (FairTradeUSA, What is Fair Trade? Environment, fairtradeusa. rg) Traditionally, farmers are forced to participate in methods that harm the land and surrounding ecosystems, such as: deforestation, erosion, use of harmful toxins, and disposal of pollutants into the water supply. With Fair Trade Certification, producer organizations must adhere to baseline environmental standards. Some core requirements are: No use of GMOs, Control of pests in a safe and sustainable way, Safely handling and storing grochemicals, and enhancing the soil by applying sustainable irrigation practices. FairTrade USA, Environmental Standards, fairtradeusa. org) When farmers and organizations comply with the Fair Trade environmental standards, they protect the environment and increase the quality of their products. Fair Trade is still a fairly new movement, but it has been creating an increasingly larger influence within recent years. It improves the quality of life for workers by increasing pay and using the Fair rade Premium to reinvest into improving their community through projects. t also protects the environment by having farmers and organizations adhere to environment guidelines. Fair Trade allows consumers to buy products that follow their values. Farmers will no longer be paid a low prices for their goods, and will be able to cater to their own personal needs. At the end of t he day, Fair Trade works to end poverty in developing countries, improve quality of life, and protect the environment, and that should be enough reason to have all products Fair Trade Certified.