Fair_Trade_and_Fair_Trade_Laws

Fair Trade and Fair Trade Laws We can see trace roots of Fair Trade as far back as the late 1930’s initiated by churches in North American and in Europe. The goal of these organizations was to provide relief to many refuges and other impoverished communities who were selling their hand made items to different markets. “These Alternative Trade Organizations” offered higher returns to producers in the developing world through direct trade and fair prices” (TransFair USA, n.d.). Fair Trade laws allowed manufacturers to stipulate minimum retail prices for their products and to require dealers to sign contracts agreeing to abide by these prices. (Boone & Kurtz, 2010, p.610). I know that they say some retailers are charging higher than the market prices for commodities that are Fair Trade Certified, but I think that the few pennies more they are charging is worth the benefits to these small farmers and their communities. With today’s emphasis on ‘going green’ I think that marketers need to accentuate Fair Trade, Eco-friendly and bio-degradable. Critics say Fair Trade will cause an influx in the number of small farmers who want to own their own small coffee farm. I think they need to do their research and see that these farmers are not becoming millionaires because of Fair Trade. They are becoming self-sustaining honest farmers, who can educate their children and afford needed health care for their families. I for one do not think that there would be a substantial amount people who would want to go into a back breaking, hot, labor intensive, 365 days a year business that will allow them to barely eke out a living. Fair Trade was a natural response to the increasing gap in income and the fact those globalization efforts were taking place in the 1970’s. “Those who advocated fair trade believed in the principles of democratic organizations, recognized trade unions, decent working conditions, outlawing child labor, environmental standards, and a minimum price to cover the cost of production” (Bell, 2009, Kindle Edition 1.0). The difficulties that farmers and their farm workers face differ extensively from product to product. As I have already stated, it is the small-scale coffee growers that seem to face the highest degree of difficulties. Coffee is a very volatile market in which the prices fluctuate on a daily basis so it is difficult for these coffee growers to be able to consistently market their product for a profit. They don’t have access to international buyers and are often forced to use unscrupulous middlemen who exploit them and set prices below the farmers production prices. When things really came to light was in 1988 when coffee prices around the world suffered a sharp descent. This triggered the birth of the first Fair Trade Certification initiative and it was branded the Max Havelaar. Max Havelaar was a fictional Dutch character who opposed the exploitation of Dutch coffee pickers. So the Netherlands created a label, Max Havelaar, which offered mainstream coffee industry players the opportunity to adopt a standardized system of fair trade criteria (TransFair USA, n.d.). Some critics charge that Fair Trade policies don’t work because it keeps small farmers from advancing their production techniques. It keeps them backwards and their machinery antiquated thus making them less competitive. They charge that Free Trade would encourage industrialization and more efficient farming practices. Is there really any such thing as Free Trade in this world' Governments subsidize farmers, provide tax incentive, hand out government contracts and bail out failing companies (Bell, 2009, Kindle Edition 1.0). Unrestrained capitalism and Free Trade widens the gap between the rich and the poor. But most of these farmers run small operations and Fair Trade offers them a way to sustain their business instead of losing it. They have no opportunity to buy millions of dollars of equipment and hire expensive laborers. Fair Trade also teaches them environmentally sound growing practices and socially responsible working conditions. It also requires them to invest in their business. (Boone & Kurtz, 2010, p. 216). This goes hand in hand with how responsible the world is becoming and I think that people buy products, some not all, based on where they came from and how they were made. We are becoming more educated as consumers and there are things that are important to many of us. Reading labels and doing research on a product is becoming more mainstream. Marketers need to realize this and a smart marketing approach to these Fair Trade products would be to emphasis not only the Fair Trade story but also the follow up stories on the families. The Fair Trade Certified Label guarantees consumers that strict economic, social and environmental criteria were met in the production and trade of an agricultural product. Fair Trade Certification is currently available in the U.S. for coffee, tea and herbs, cocoa and chocolate, fresh fruit, flowers, sugar, rice, and vanilla. Kyle Bell (Kindle Edition 01) states that: By providing a minimum wage, safe working conditions and a clean environment, fair trade ensures a process that respects the dignity of workers while providing the North with the goods that we seek. It is a win-win for all of us. Even though there are quite a few products that are Fair Trade certified and traded, the fastest growing segment is the US specialty coffee market. Starbucks Coffee Company is in many fair trade agreements with small Coffee Farmers. Fair Trade certification is an innovative, market-based approach to sustainable development that empowers small-scale farmers to lift themselves out of poverty by guaranteeing fair prices, a more direct trading model, community development and environmental stewardship. By doubling its purchases of Fair Trade Certified coffee, Starbucks will help directly improve the lives of more than 100,000 farming families in developing countries across Latin America, Asia-Pacific and Africa and support programs and projects like educational scholarships, medical clinics, basic infrastructure enhancements and quality improvement initiatives. (Organic Consumer Association, 2008). I think that Fair Trade is indeed a market-based approach strategy. This is a very smart marketing strategy and business move on the part of Starbucks. It not only positions them in the spotlight for their humanitarian and environmental stands, but I think it also makes the prices of the coffee in their stores make a little more sense. I don’t mind paying a little more for something if I know the reasoning behind it. Starbucks has not only good quality products but also a good social conscience. I’ll take a double tall latte and a pound of Fair Trade Certified Café Estima. References Bell, K. (December 2009). International Political Economy: Free trade or fair trade. Ebook Kindle Edition. Boone, L. E., & Kurtz, D. L. (2010). Contemporary marketing (14th ed.). Mason, OH:South-Western-Cengage Organic Consumers Association, 2008. Starbucks, transfair USA and fairtrade labeling organizations international announce groundbreaking initiative to support small-scale coffee farmers. Retrieved January 24, 2010 from http://www.organicconsumers.org/starbucks/index.cfm TransFair USA, n.d., fair trade certified. Retrieved April 27, 2010 from http://www.transfairusa.org/content/about/