Have you ever thought about the coffee that you drink in the morning is produced in which conditions and life standards? Or, the chocolate you taste deliciously could have been a reason for its producers to work long hours under unhealthy conditions and live in poverty. Recently, it apparently seems that globalization and free trade system, which allows big firms and developed countries to gain huge profits, forces small farmers and producers to sell their outputs at very low- prices live in a cycle of poverty (Landry, 2003).
In order to remove this injustice, the term “fair trade” occurs. According to Fair Trade Federation, which is one of the organizations of fair trade wholesalers, retailers and producers who have a unity to provide economically disadvantaged producers good producing opportunities and fair wages, fair trade means an equitable and fair partnership between marketers in developed countries and producers in developing countries and other parts of the world (Fair Trade Organization [FTO], 2002).
In opportunities aspects that are provided to producers, fair trade provides small farmers to ameliorate their life standards, to use technical assistance for building infrastructure to improve production and to improve themselves by technical training and skill diversification for cooperate members and their families. One of the main advantages of fair trade for producers is that they are provided better life standards.
Contrary to free trade, which allows big companies to wait 60-90 days before paying producers, fair trade guarantees the producers a long – term relationship with buyers and pre-payment so that producers to have sufficient funds for the continuity of production that ensures the economies stability and fair income distribution (Mclean, Halak, Jiang et al. , 2005). In fair trade method, producers are guaranteed to have a long term relationship with a buyer.
Within this reliability, it becomes easier to estimate future income and for producers to invest in education or long term projects. Also, fair trade buyers purchase goods directly from producers and that stimulates them to provide producers financial assistance, pre-payments or funds to obtain raw materials. As a benefit of this economic stability and fair income distribution, fair trade make it possible for producers to provide necessary daily services such as education and better healthy care for their families (O’Brien, 2002).
For example, a fair trade program “United to Live Better” expresses, in Guatemala City, the health and education programs offers people medical, dental clinics, a laboratory, a well-baby program, a breast-feeding program directed by the La Leche League of Guatemala, a day care center and a children’s scholarship and tutoring program that sends more than 500 children to public school (James, 2000). Another benefit of fair trade is that thanks to economic recovery, farmers and producers now can have an opportunity to increase production by technical supports and technological improvements.
Fair trade organizations, founded to act as bridges and regulators between fair trade producers and big firms provide technical assistance and support such as market information, produced feed back and training in financial management so that workers produce consciously and profitable. Producers are led to improvement of production and management methods that mostly, they begin to establish their own businesses and brands. They are provided cooperatives market information throughout the year and ideas of how to market their products (Kohler, 2006).
The effects of technical assistance can be noticed from the investigations of Fair Trade Organization. For instance, sales for Ten Thousand Villages, the largest fair trade organization in USA grew, from nearly $3 million in 1985 to nearly $12 million in 1998. Ten Thousand Villages Canadian Operations reported another $3 million (FTO, 2002). This improvement in income stimulates producers use technology as shown in Peru. Producers in Peru decided buy a truck during production, and it became easier to invest in their need.
Before the truck, they were carrying the sucks of coffee on their backs about eight hours (Hockerts, 2005). As a final advantage of fair trade for producers is that, it allows workers to improve their skills by technical training and other members of family, especially women to participate in division of labor. Workers learn important leadership and organizing skills enabling self-reliant grassroots-driven development. The fair trade organizations such as Twing Trading, “earmarked %10 of its gross profit for developing tailor made business programs to help producers build and grow their competencies and their communities. (Hockerts, 2005). Fair Trade also enables women to participate more in labor and be paid fair salaries compared to men. Women gain equal opportunities to gain their own life by working. According to Fair Trade Federation, %70 of workers is women who are the only wage earners in their home besides their house works. Providing higher wages for women affects the standards of life for entire families (FTO, 2002) “Fair trade gives us fair price and access to credit. It also gives us dignity. We are treated as equals. stated Nicaraguan coffee farmer Santiago Rivera which discloses the importance of fair trade for producers (Trans Fair USA [TFU], 2005). Small farmers and workers benefit from fair trade in the area of better life standards, technological improvements and technical training and division of labor in their families.
Reference List • Fair Trade Federation , 2002, Fair Trade, Membership Criteria, Retrieved April 2, 2007 from http://www. fairtradefederation. org/memcrit. html • Hockerts, K. , (2005), The Fair Trade Story. Oikos Sustainability Case Collection. Retrieved April 2, 2007, from http://www. oikos-stiftung. unisg. ch/homepage/fairtrade. pdf • James, D. , (2000), Fair Trade, Not Free Trade, In K. Danaher & R. Burbach (Ed. ), Globalize This. Common Courage Press. Retrieved April 2, 2007, from http://www. thirdworldtraveler. com/Reforming_System/FairTrade_GT. html