Fair Trade
Better deal for third-world producers.
Better quality for consumers.
Introduction
90% of world‘s cocoa in small farms
Most of the farmers have never tasted a single
chocolate bar in their lives!
Failure of international
trade – poverty cycle
Low market prices for cocoa beans...
Leads to a lack of resources for
farmers...
Leads to cocoa farmers building debt...
Leads to continued poor quality of
cocoa...
Leads to country's inability to remain
competitive...
Large companies don‘t
help much
Farmers are forced to sell their goods for
very low prices
They have no choice
Leads to bribery and organized crime
Grey economics, drug dealing, mafia …
„Invisible hand“ doesn‘t work in states
without developed democracy
International relieves
Relieves help only temporarily
„Farmers in Kenya pray for huge harvest
in Canada.“
Aids encourage farmers not to work but
wait for subsidies
To give money or food won‘t establish
sustainable development
How to break the cycle?
Fair Trade is general term for an idea of
ethical and rational business
Fair Trade cleans up relationships
between producer and consumer
Fair Trade is no charity – it just provides
producers with appropriate wages
Fair Trade means top quality food and
goods from known sources
Fair Trade
Everyone can contribute to improve living
conditions of actual producers
Environment impact
Fair trade is ecological
Fair trade eatables are BIO products
No slaves, no children forced to work
Fair trade labeling history
In 1964 Oxfam in Great Britain created the first
Fair Trade Organization. Parallel initiatives
were taking place in the Netherlands
1967 the importing organization, Fair Trade
Organisatie, was established
In 1988 from initiative of Mexican coffee
farmers, first Fair Trade labeling company
started
How does Fair Trade work
Producer Consumer
Distributor
Co-op
Labeling
company
Global view
Fair trade goods
A range of fair trade products, including crafts,
fashions, foods (such as chocolate, honey, bananas
and other fruit), beverages (tea, coffee, fruit juice),
paper and cards are available. Products are sold
through an extensive network of small retailers and
many big supermarkets have a token few products
available for purchase. Mail-order companies exist all
over the world, from small specialist grocers to new on-
line suppliers. You can also check out the legendary
Starbucks for a token sample of fair trade coffee.
BBC News
Economic view
„Every business transaction is a
challenge to see that both
parties come out fairly.“
Adam Smith, The Theory of Moral Sentiments (1759)
Free trade vs. Fair trade ?
Economic evolution of Fair trade
From missionary to market with
agriculture products
Free trade and market
failure
Is international trade with agriculture
product really free?
What about price of goods on this
market?
Comparation of situation in agriculture
between developing coutries and those
developed ( especially EU, USA or
Japan)
Fair Trade medicine
Economic principles of Fair Trade.
Cost of Fair Traded goods and its prices.
Influence of existence Fair Trade
organizations on world market.
Fair Trade in compare with
environmental approach.(?)
Questions and problems
with Fair Trade
Is Fair Trade really fair?
Problems with certifications
Conclusion
Is it possible that Fair Trade could
improve the world „free“ market?
Some interesting facts
In Kenya capital town Nairobi supermarkets is
available an Irish butter for lower price, then
their own.
The subsidies for one cow in EU are equal to
two year wages of average agrarian in
countries of Third world.
From 1,75 Pounds paid for cappuccino in
London café, the farmer in Columbia get about
0,05 Pound.
Real numbers
Fair traded goods participate on world
export with 0,01- 0,03% (resources are
different (?))
Fair Trade has direct influence on lives of
more than 5 mil. people in developing
countries.
Fair Trade organisations
International Fair Trade organizations in Europe (summer 2005)
FLO IFAT NEWS! EFTA
Established 1997 1989 1994 1987
Producer org., National
National
Type of members Importing workshop Importing org.
labeling org.
org., others association
Members in 20 in 20 280 in 62 15 in 13
11 in 9 countries
countries countries countries countries
Members in 15 in 15 63 in 12
all all
Europe countries countries
Culemborg, The Maastricht, The
Head office Bonn, Germany Mainz, Germany
Netherladns Netherlands
Top5 Fair Trade importers
Claro fair trade 8,3
11,5
Oxfam Fairtrade 5
15,5
Traidcraft 12,4
20,6
Fair trade organisatie 15,9
20,7
Café direct 12
25,2
Ctm altromercato 9,3
34,3
gepa 29,8
39,7
Turnover financial year 2004 Turnover five years ago
Shares of market
Last year
five yeas
Cofee available Sweden under 1 0,8
ago
UK 20 1,5 Norway 0,9 0,3
Switzerland 6 3
Finland 0,4 0,3
Austria 2,3 0,7
Luxembourg n/a 3,3
Denmark 2 1,8
Netherlands n/a 2,7
Ireland 2 0,5
Belgium 1,7 1 Italy n/a 0,1
Germany 1 1 France n/a 0,1
Shares of market
Last year
Denmark 0,9 2
avail five years
Bananas able ago
Norway 0,6 n/a
Switzerland 47 15
Ireland 0,5 n/a
United
The
Kingdom 5,5 under 1
Netherlands n/a 4,2
Finlad 5 n/a Luxembourg n/a 4
Belgium 4 0,6 Italy n/a 1,2
Austria 2,7 n/a Germany n/a under 1
Sweden under 1 1,8 France n/a n/a
What is Fair Trade about?
According to the 2005 FTF Trends Report, alternative
traders who are members of the Fair Trade Federation
commit to advancing the following:
1. Opportunities for economically disadvantaged
producers.
2. Gender equity.
3. Transparency and accountability.
4. Capacity building.
5. Payment of a fair price.
6. Healthy working conditions.
7. Environmental sustainability.
8. Promotion of Fair Trade principles.
www.fairtraderesources.org
Controversy
Some large companies might try to get
„ethical credit“ being part of FT labels
Nestlé‘s „Partner Blend“ coffee has
obtained FT label despite the fact that
other product from Nestlé exploit farmers
So why should I care?
1. You are paying the exact market price
for what you get – including proper
reward for the producer
2. It is ecologically correct
3. You know what you buy
4. Fair Trade is yummie
What difference does it
make if I buy Fair Trade?
In small amount – small difference
Small amount every day – big difference
„The best thing about Fair Trade is that it
is very natural. You eat every day, you
drink tee or coffee and you‘re helping!“
Small amount every day in the whole
company – enormous impact
Future of Fair Trade
Fair trade is not a charity
Fair trade merely gives people what belongs to them
„By not buying Fair Trade coffee you participate on
crime… you‘re murdering.“
In EU, Fair Trade becomes more and more popular
Coffee shops, markets and restaurants start to offer
Fair Trade goods
Whole companies, churches, schools order Fair Trade
labeled
Challenges
Fair Trade model obviously works, yet it is not widely used.
Lack of consensus even among Fair Trade advocates
1. Identifying and motivating consumers.
2. Addressing consumer misperceptions and resistances.
3. Keeping a focus on crafts.
4. Determining a fair wage.
5. Reconciling mission-based Fair Trade with mainstream
distribution.
6. Developing parallel certification processes.
7. Minimizing unintended political and economic results.
8. Overcoming staffing and funding limitations
www.fairtraderesources.org
World Fair Trade Day
May 13th – International Fair Trade Day
Links for further
reading
www.fairtrade.cz
www.fairtraderesources.org
www.jedensvet.org
en.wikipedia.org/wiki/Fair_Trade
Thank you, have a fair day…