That Blue Square Thing

The Ethics of Fair Trade

The CIDA and DIDA courses are now finished and will not run anymore.
I’ll keep these pages up for a while as there are some useful resources for me on them. Any future resources will be on the Creative iMedia pages.

The Multimedia Fair Deal SPB requires you to understand a little about the ethics of Fair Trade. This page should help you with that.

Fair Trade is all about paying people a fair price for the things that they produce.

You pay a little bit more in the shops for fair trade products, but the producers get paid a fairer wage. As fair trade goods are usually produced in poor countries this benefits people in LEDCs (Less Economically Developed Countries).

Fair trade goods include bananas, coffee, tea, chocolate, jewelry and clothing. For example, fair trade coffee might come from Costa Rica (in Central America), chocolate might come from Ghana (in West Africa) and clothing might be produced in factories in Vietnam (in South-East Asia). The people producing these goods are often some of the poorest people in their countries - so fair trade can really help them.

Ethics is about the rights and wrongs of something - the good and the bad. Is Fair Trade "right" or is it "wrong"? There is always (well, usually) two sides to any issue like this.

About Prices:

The Fair Trade idea was developed in the 1980s when the world price of coffee dropped to a really low level. This really hurt coffee farmers. Not knowing what the price would be from one year to the next also made it much harder for farmers to plan for the future and to invest in their farms.

Fair trade provides a guaranteed minimum price. This means farmers know that they will be paid at least that price. If the price of coffee (or whatever) falls below that price they still get the minimum. If the world price goes above the minimum then they get the higher price.

Fair trade producers have to sign up to a set of pledges. They agree to not use a group of dangerous pesticides and not to use child labour. They do, however, have to pay to get into the Fair Trade scheme.

I have some other Fairtrade related resources about the chocolate industry. These were teaching resources I used when I taught Year 9 geography. There might be some useful extra information there perhaps.

Advantages of Fair Trade:

  1. Farmers receive a better price – buy more food, better diet thus better quality of life and a higher life expectancy
  2. A 5% premium is given back, as well as a minimum price for their goods, so producers can invest in machinery, education and transport, as well as being able to plan for the future.
  3. Limits child labour – children get education as parents can afford school
  4. Companies that purchase the products may invest in the community they are working with using their profits and improve the area by building facilities such as schools and clinics
  5. Training for workers
  6. Improving working conditions – get rid of sweatshops
  7. Environmentally friendly – dangerous pesticides are banned, people may be encouraged to replant trees.

Possible Issues with Fair Trade

  1. We pay more and only a small amount of this proceeds to the original producers
  2. Large companies claim they are fair-trade even though the products make up a small amount of their overall range
  3. The processing of raw materials may not be done in the same country. The processing adds the most value to the produce, but the value from this often ends up with big corporations, not farmers

In Conclusion...

You'll find more pros than cons with Fair Trade. It's certainly possible to argue that, ethically, Fair Trade is good - but is it totally good?