The Pros And Cons Of Fair Trade Essay

The small but ever growing social movement, fair trade, attempts to oppose commodity fetishism and provide another option for the capitalist society is obstructed by the differences among all the participants of fairtrade in terms of their perceptions, intentions and interpretations of what constitutes “fair”. According to Kharel and Middendorf (2015) There are many differences among all the participants of fair trade at all levels in terms of their perceptions and interpretations of fair trade” (p. 255).

Firstly there are certifying organizations such as FLO (Fairtrade Labelling International) and WFTO (World Fair Trade Organization) that act as governing bodies. These organizations developed a “Charter of fair trade principles” to relay a consistent definition and guidelines of those pursuing fair trade activities using five core principles: market access for marginalised producers, sustainable and equitable trading relationships, capacity building and empowerment of producer organizations and consumer awareness raising and advocacy and emphasizing fair trade as a social contract (Kharel & Middendorf, 2015, pg. 55).

Additionally, the Charter as requires decent working conditions are provided, the organization must also practice environmental sustainability in production and trade, and also engage in monitoring and evaluation for assessing compliance and impact. Kharel and Middendorf mention that FLO and WFTO are “not the only practitioners and participants of fair trade” so it is difficult to make sure all organizations are “100% committed to the fair-trade principles” (2015, pg. 255).

These principles have contributed to a “dramatic boom of fair trade sales that is mainly due to the increasing participation of large mainstream retailers” (Schmelzer, 2010, pg 228). Although the fairtrade sales have been increasing with time, fair trade sales represent still represent less than 0. 1% of all goods traded internationally, according to the United States-based Fair Trade Federation as of 2005. Additionally there are differences among the the buyers currently participating in fair trade.

The buyers consist of three types: mission driven enterprises who sell 100% of fair trade products, quality driven firms and organizations who selectively foster fairt air trade principles and market driven corporations who are purchasing a nominal amount of fair trade product in order to better their public image (Kharel and Middendorf, 2015, pg. 255-256). The different type of buyer contributes to their motivations and how faithful they are to the fair trade movement, which in could in turn prevent the longevity of this movement with unfaithful practitioners.

Fridell considers the growth of the fair trade market through the inclusion of the large corporations, who originally thrived due to free trade, “as a failure of the fair trade movement” due to their exploitation of the fair trade image(Kharel and Middendorf, 2015, pg. 256). There is increased promotion of fair trade thanks to market driven buyers, but their lack of support to fair trade goes hand in hand with lack of support for socio-economic development in the developing countries. Personal gain and drive to increase margin profits remains as a topic fair trade works against.

Kharel and Middendorf make light of the different views among producers and producer organizations that lead to a lack of commitment to the fair trade vision. The different producers or producer organizations range from producer owned cooperatives, non-government organizations (NGO’s), and private companies and agribusiness plantations. Fair trade attempts to provide opportunities to small producers but there is a “lack of knowledge of what fair trade is and how it works” among producers because it is the cooperative leadership that handles most of the “activities related to fair trade”(Kharel and Middendorf, 2015, pg. 56).

This is what Kharel and Middendorf say contributes to the “lack of producer commitment” because they do not understand the vision of fair trade which often leads to “producers’ defection of both the fair trade network and cooperative when the producers receive a better price in the traditional market” (2015, pg. 256). With the slow rise but growing popularity, Fair Trade is still limited to few agricultural commodities and specific geographic locations.

A study by Brown published in 2007 looks at closer at the impact of fair trade in Africa, specifically Ghana, Tanzania and Nicaragua where there is a struggle for fair trade companies to be profitable when it comes to chocolate and coffee. It is shown to be “difficult, but not impossible for a small producer to compete” with giant international companies (pg 274). Fair trade sales are increasing, the growth of the fair trade market is the “integration of fair trade items into the mainstream and corporate circuits” (Reynolds & Long, 2007, p 24).

Whether it be businesses practicing all fair trade principles or businesses like Starbucks and Nestle buying the minimal amount of fair trade coffee, awareness is always being promoted. This awareness is what the fair trade model thrives off of. To be truly successful the vision of fair trade needs to be narrowed buy it participants to include those who are aligned with the objectives of safe and ethical working conditions, better wages, local development and so on as opposed to increased margins and local economic development that result from free trade.