Is Fair Trade fair?

Basically, Fair Trade is about a better price, decent working condition, and Fair terms of trade for farmers and workers in developing world. Done this by insisting on companies to pay sustainable prices under the Fair Trade minimum price, and Fair Trade premium.

Fair trade minimum price is more stable than the market price, in which it set up to guarantees that producers receive a price that cover the cost of sustainable production.

Fair Trade premium is the money paid on top of the Fair Trade minimum price. This money will be use to improve to quality of producer’s health, education, environment etc.


Some points that Fair Trade has to consider
However, it’s not every producer gets help from Fair Trade, the producer has to meet with Fair Trade Standards first, to get help. It’s not on the basic of need.

Sometimes, Fair Trade is use for marketing ploy to get ethically people to pay for it. Furthermore, it may harm many other products by stigmatizing other products as unfairly and exploitatively, but in the end only 10% of premium paid go to producer. The other 90% go to retailers.

Fair Trade set up a fix price for the producer, It make them uncompetitive producer. In the long run, it might hold back the economic development. They may unable to get involve in world trade’s competition.



References
www.fairtrade.org.uk
www.wfto.com
Marc Sidwell, ‘UNFAIR TRADE 2008’
Brink Lindsey, ‘GROUNDS FOR COMPLAINT?’