fair trade and organic markets

8/6/2019 Fair Trade and Organic Markets

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Presented

By

GEETHA MOHAN

IIPM


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Fair tradey Organized social movement and market-based approach

that aims to help producers in developing countries makebetter trading conditions and promote sustainability.

y The movement advocates the payment of a higher price toproducers as well as higher social and environmentalstandards.

y Focuses in particular on exports from developing countriesto developed countries, most notably coffee, cocoa, sugar,tea, bananas, honey, cotton


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Historyy 1940-50:- 1st attempt to commercialize fair trade goods

in northern market by NGOS.

y 1946 and 1949 :- Ten Thousand Villages, an NGOwithin the Mennonite Central Committee (MCC) andSERRV International were the first , to develop fair

trade supply chains in developing countries.


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General structure of the movementy FLO :- labeling system is the largest and most widely

recognized standard setting and certification body forlabeled Fair trade.

y It regularly inspects and certifies producer organizations inmore than 50 countries in Africa, Asia, and Latin America.

yThe NetworkofEuropean World shops, created in 1994,is the umbrella network of15 national World shopassociations in 13 different countries all over Europe.


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Contdy FTF :- association of Canadian and American fair trade

wholesalers, importers, and retailers.

yActs as a clearinghouse for information on fair tradeand providing resources and networking opportunitiesto its members.


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Fair Trade Organisation

Fair-trade Labelling Organizations International(FLO)

FLO-CERT inspected and certified producerorganizations.

The crops must be grown and harvested in accordancewith the international Fair-trade standards set by FLOInternational.

The supply chain must also have been monitored by

FLO-CERT, to ensure the integrity of labeled products. Purports to guarantee fair prices, principles ofethical

purchasing.


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WFTO Fair Trade Organization

World Fair Trade Organization (WFTO)

launched in 2004 a new Mark to identify fair

trade organizations.

allows consumers to recognize registered Fair

Trade Organizations worldwide and

guarantees.

implemented regarding working conditions,

wages, child labour, and the environment.


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Alternative trading organizations

Mission-driven business aligned with the Fairtrade movement

To contribute to the alleviation of poverty in

developing regions of the world. Collective action and commitment to moral

principles based on social, economic and tradejustice.

Characteristic of ATO is that of equal partnershipand respect.

Humanizes" the trade process ..


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WORLDSHOPS

y Specialized retail outlets offering and promoting Fair Trade products.

y Not-for-profit organizations and run by locally based volunteer

networks

y Spread across Europe, North America, Australia and New Zealand

y Aims of Worldshop

y Make trade direct and fair with trading partners

y Pay producers fair price that guarantees substinence

y Promote social development

y Web Movement: Fair Trade a Day


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POLITICSy European Union

y 1994

: support for FT, EC Working Group on Fair Tradey 1997: FT bananas commercially viable

y 1998: Draft Resolution on FT

y 2000: Purchase of FT certified coffee and tea

y 2004: "Agricultural Commodity Chains, Dependence and Poverty A proposal

for an EU Action Plany 2006: Unanimous resolution adopted on Fair Trade

y France

y 2005: 40 proposals to sustain the dev. of FT, commission to recognize FTOs

y 2006: adoption of reference doc on Fair Trade

y Italy

y 2006: discussion started in parliament to bring law on FT

y Netherlands

y 2007: Groningen and Douwe Egberts case


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COMMON JUSTIFICATIONS

y Implicit and often explicit in fair trade is a criticism of the current

organization of international trade as being unfair

y According to FLO International and WFTO: "Fair Trade is,

fundamentally, a response to the failure of conventional trade to deliversustainable livelihoods and development opportunities to people in the poorest

countries of the world.

y Poverty and hardship limit peoples choices

y Market forces tend to further marginalise and exclude them

y Makes them vulnerable to exploitation

y farmers and artisans in family-based production units

y hired workers within larger businesses


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Criticismy It locks developing country producers into low-priced food

commodity production, rather than helping them out of thislow-margin sector.

y Pricedistortionargument-fair trade attempts to set aprice floor for a good that is in many cases above themarket prices

yMainstreamingofFairtrade-fully autonomous tradingsystems

y Creation of insider/outsider market-certificationprocess,production,pricing systems


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Commodity crisisy Internationalinterventionpolicies

falling commodity prices has been estimatedby the Food and Agricultural Organisation (FAO) total

almost $250 billion during the 1980-2002 period.

y Unregulatedcompetitioninglobalcommoditymarkets

y Developing countries commodities that do not compete with

developedcountries:

y Developing countries commodities that compete withdeveloped countries


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Fair trade coffeey Fairtradecoffee is coffee which is purchased directly from the

growers for a higher price than standard coffee

y Fair Trade certification began in the Netherlands in 1988( MaxHavelaar Foundation's labeling program in the Netherlands).

y True certified fair trade coffee is certified by TransFair USA, the onlythird-party certifier of Fair Trade coffee for the U.S. market.

y According to the Tropical Commodity Coalition (2009), ethicallycertified coffees accounted for 6 percent of worldwide coffeeproduction in 2008

y Important Markets- US(2%) and European countries(1%)


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Standards for Fair Trade Coffee

Certificationy Fairlaborconditions

y Directtrade

y Democraticandtransparentorganizations

y Communitydevelopment


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Fair Trade teay Fair trade tea is produced on estates that have good standards fortheir workers, such as fair pay, quality housing, healthcare, safe

working conditions and children's education.

y TransFair audits the supply chain of U.S. importers to ensure thatthe tea came from certified growers (which are predominantlylarger-scale plantations, unlike the small growers and cooperativesin the Fair Trade Certified coffee and cocoa system).

y The premium paid on top of the market price flows back into a fundmanaged jointly by tea estate managers and worker representatives,

who then allocate money toward community development projects.

y Fairtrade Tea -UK and in Switzerland(5% market share ),

Germany(2% of market share)


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Before you finish eating breakfast in the

morning, youve depended on morethan half the world.y Martin Luther King

fair trade and organic markets

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