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Question: Fair trade pros and cons

Answer: THE PROS
Fair trade offers a host of advantages, including:

1. Competitive wages: one of the most alarming issues related to farming and growing in the developing world prior to fair trade was low wages. People were working incredibly long hours for very little in return. Now, with fair trade regulations in place, wages are considerably higher. People take more home, and additional revenue is invested in community initiatives, which are designed to improve access to services like healthcare. Farmers can also be more confident in the stability of their jobs, and therefore, the security of their salaries.

2. Working conditions: fair trade promotes safe, secure working environments. By eliminating the use of harmful chemicals and dangerous equipment, fair trade has ensured that millions of people all over the world are working in places that prioritize health and safety.

3. An end to discrimination: fair trade has helped to ensure that everyone has access to a job, regardless of their gender or religion. In many countries, the workforce is made up primarily of women, as wages are significantly higher than they would be for jobs traditionally associated with female labor.

4. A reduction in child labor: children often start working at a much younger age in the developing world than in developed countries. Fair trade has contributed to a reduction in child labor due to the fact that adults are earning more. With higher household incomes, children have the chance to enjoy their childhood and to benefit from education instead of having to go out to work.

5. Improved living standards: the establishment of community cooperatives in rural areas and higher incomes have led to an improvement in living standards. Villages and towns are now safer, people have access to better services and the quality of life is better.

6. Competitive trade opportunities: before the days of fair trade, it was virtually impossible for a small grower to compete with a multinational company. Fair trade has created a much more level playing field.

7. The rise of organic farming: there has been a great deal of media attention on farming techniques, most notably, genetically-modified foods. With fair trade products, organic methods are used exclusively.

8. Set prices: people often ask the question, ‘how does fair trade work?’ One of the most significant elements of the model is setting minimum prices. Once a product is certified, the producer or the cooperative responsible for that fair trade product will receive a minimum fee. The lowest price will never drop below the relevant market level, meaning that growers and fair trade communities will never lose out financially.

9. Diversity: the range of fair trade products is expanding all the time.

THE CONS
1. Success is limited: investing in cooperatives brings a huge range of benefits to communities, but success is limited to those who are part of the working community. It is possible that fair trade could lead to divisions within an area if some people are left out of the cooperative.

2. Fees: to become a certified fair trade grower or cooperative, you have to pay fees. With charges reaching hundreds, even thousands of dollars, this is a scheme that might not be accessible to all.

3. Higher prices and smaller customer pools: the higher prices associated with fair trade may have a part to play in the size of the customer pool. Some products are likely to be less appealing to consumers on a budget, and some might simply be unaffordable. Not everyone will be willing or able to pay a premium.

4. Limited product choice: the range of fair trade products is diversifying all the time, but there is still a gulf in terms of choice between fair trade and non-fair trade items. The current market is dominated by tea, coffee, and chocolate. Outside of this range, it’s much more difficult to find fair trade products that are widely available.

5. Administration fees: there are questions about the financial impact of fair trade due to the fact that administration costs often have to be absorbed by local communities.

6. Attracting the heavy hitters: it’s difficult to attract some of the big names in the worlds of commerce and retail due to higher prices. If a company can save up to 30% on the cost of producing items that are high-quality, for example, it’s very difficult to persuade them to opt for fair trade products instead.

7. Concerns over wellbeing: on the surface, the fair trade model looks flawless, but there are still concerns about working conditions and a lack of investment that benefits workers and farmers directly. The vast majority of cooperatives benefit hugely, but there have been examples of labor exploitation.

8. Justifying higher fees: often, it’s difficult for fair trade producers to justify higher rates and some consumers will question whether it’s worth them paying more for products that may fundamentally be very similar.

(Source: Sell Merch, 16 Apr 2021)

Source Link: https://sellmerch.org/how-does-fair-trade-work-the-pros-and-cons-of-fair-trade/