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Who benefits from fair trade? ... These are all "existence theorems." I would not be
surprised to learn that current benefits from fair trade are positive. ...
... What you do matters, and the bottom line is: Fair Trade helps farmers, gives us
healthier food, and benefits the ecosystem. That’sa win-win-win. .
... Likewise it could be possible to put small sections of information on fair trade
products to show the benefits to the producers that fair trade has. ...
... after all, has no place in the 21st century, especially when the potential benefits
of open trade ... We should always subscribe to fair trade, and not free trade.
... it’s because the government can increase or decrease these benefits at any ... Fair trade
is when restrictions are placed on imports based on environment, labor ...
Submitted by nco71 on January 6, 2008
Category: Miscellaneous
Words: 610 | Pages: 3
Views: 318
Popularity Rank: 29,939
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...conservative commentator Philip Oppenheim...argued recently that in Britain, it’s supermarkets that profit most from fair trade sales. They charge a premium for fair trade bananas, for example, while a "minuscule sliver ends up with the people the movement is designed to help"...
Here is more. In case you don’t know, fair trade sells a product at a premium price, under the promise that the workers are treated better and paid more. But will that improve living standards? Hmm...this sounds like a problem in tax incidence theory. To make the best possible case for fair trade, I will assume the promise of good treatment is credible.
Let’s say the supermarket has some market power and would have liked to price discriminate on coffee sales. Now you can buy either normal coffee or fair trade coffee, and the richer, more conscientious people are willing to pay more for the latter. Some people can be charged lower prices, while others pay higher prices. Fair trade will likely increase coffee output, relative to a world with no fair trade. Profits will go up. But what happens to input prices? Will wages of Rwandan coffee producers rise?
It depends on the alternative to market segregation. It is possible that if only a single kind of coffee can be sold, the market would opt for the more expensive coffee, involving better treatment of all workers. Even if you don’t expect this today, it might happen in a few years’ time. If McDonald’s can improve the treatment of all the chickens it buys, maybe Starbucks or some other force will force the coffee sector to clean up its act. So development optimists should be suspicious of fair trade. It could diminish long-run general progress by giving the conscientious an outlet for their charity. By splitting up the market, we are institutionalizing especially poor treatment for one class of workers. Furthermore the high profits from price discrimination imply that...
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