The Purpose Of The Fairtrade Movement Economics Essay

Critics of globalisation argue that despite the benefits associated with free trade and investing, over the last hundred old ages or so the spread between the rich and the hapless states of the universe has gotten wider. Hill ( 2005 )

Although the grounds for economic stagnancy in most underdeveloped states vary, several factors stand out, none of which have anything to make with free trade or globalisation. Many of the universe ‘s poorest states have suffered from totalisation authoritiess, economic policies that destroyed wealth instead than facilitated its creative activity, light protection for belongings and war.

A complicating factor is the quickly spread outing population in many developing states. Without a major alteration in authorities, population growing may worsen their jobs taking to farther poorness degrees. Promoters of free trade argue that the best manner for these states to better their batch is to take down their barriers to free trade and investing and to implement economic policies based on free market economic systems. Hill ( 2005 )

The failure by most authoritiess to prosecute economic policies that would ease economic growing and alleviate poorness has led to the formation of a figure of non for net income organisation, including the fair-trade foundation in turn toing the predicament of vulnerable groups such as husbandmans that have in the yesteryear failed to acquire the right monetary values for their green goods.

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The rich states of the universe could hold helped by cut downing barriers to the importing of merchandises from the universe ‘s poorer states, peculiarly duties on imports of agricultural merchandises and fabrics. The monetary value obtainable for farm green goods and other merchandises from poorer states is low and non profiting the hapless husbandmans in developing states. ( Hill 2005 ) .

Most developing states have sought debt alleviation through “ extremely indebted poorer states ( HIPC ) completion points in which portion of their debts has been cancelled by rich states. However, the short – term benefits have been squandered by corrupt authoritiess who used their new found fiscal freedom to do unproductive investings in military substructure or grandioce undertakings that did small to further long – run economic development taking to worse poorness degrees in most of the poorest developing states in Africa.

Developed states had besides contributed to past failure by declining to open their markets to the merchandises of hapless states.

The farm green goods from hapless states that include java, bananas, cotton and flowers have been subjected to unjust trade conditions in most developed states taking to low criterions of life to these husbandmans.

Introduction

The construct of fair-trade seems to hold existed since the sixtiess. The first formal labeling strategy was developed by the Dutch Development Agency solidified in 1988. This was followed in the following few old ages by similar strategies in other Western European States.

Fair-trade labeling Organisation ( FLO ) international was established in Germany in 1997, to unify those labeling enterprises under one umbrella and set up worldwide criterions and enfranchisement.

2The fair-trade Foundation is an independent enfranchisement organic structure that awards the FAIRTRADE MARK A to merchandises which meet international fair-trade criterions set by FLO. Currently FLO spans about 80 states, working with 632 manufacturer spouses from 58 states and across 21 fair-trade markets in Europe, North America, Australia, New Zealand, Mexico and Japan. Seven Million people including husbandmans, workers and their households benefit from the international fair-trade system and FLO purposes to continually increase the figure of manufacturer groups registered to provide the international fair-trade markets.

The UK has the most dynamic fair-trade market in the universe where clients can happen the widest scope of merchandises, the most diverse scope of companies involved, and the most active grassroots runing web.

THE PURPOSE OF THE FAIRTRADE MOVEMENT

The Fairtrade Movement is an attack to international trade that attempts to better life conditions for hapless and marginalized husbandmans and other manufacturers in developing states. It involves bear downing consumers in developed states more than the market monetary value, in order to raise the societal and environmental criterions of the manufacturers, their households and their communities. So far, Fairtrade has mostly been limited to agricultural merchandises, such as java, bananas, cotton and flowers. Handicrafts have besides formed a important class. ( www.fairtrade.org.uk ) .

In general, the behavior of Fairtrade involves organisations in developed states working with hapless and marginalized manufacturers and workers, in order to assist them accomplish greater economic ego – sufficiency and stableness, to go greater stakeholders in their ain administrations, and to increase their portion of international trade.

The Fairtrade labeling Organisation ( FLO ) owns the FAIRTRADE MARK which is the merchandise label that certifies that international fair-trade criterions have been met. FLO sets the criterions.

Its subordinate FLO certifies attachment to the criterions by manufacturers and bargainers.

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THE UK FAIRTRADE MOVEMENT

The aims of the UK Fairtrade Movement

The UK Fairtrade Foundation is an independent non – net income administration and registered in UK charity, but has the purpose of operating as a sustainable concern. It encourages Fairtrade – it is non itself a retail merchant – and its ends are focused on three groups of stakeholders: manufacturers in developing states, UK consumers and UK companies. These aims are:

To help deprived manufacturers and workers in the underdeveloped universe to better their societal and economic place through improved market entree, information and footings of trade particularly the value of their green goods.

To raise consciousness among consumers, enabling them to do informed picks about purchases. This besides includes green goods from organic agencies of bring forthing farm green goods.

To act upon UK companies to spread out Fairtrade merchandise handiness and to develop better merchandising relationships with providers. This is peculiarly targeted to organic clients every bit good as to sections that believe that African husbandmans have been exploited due to unjust competition and monetary values for their green goods.

The UK Fairtrade Foundation aims to accomplish its ends by:

Awarding its Fairtrade Mark to certain merchandises, as a warrant to consumers that the merchandise meets the criterions with respect to profiting manufacturers in the underdeveloped universe this has been consistent on farm green goods from Latin America and Africa.

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Promoting research into and instruction about the causes and effects of poorness, peculiarly in relation to the behavior of trade and conditions of employment for hapless people throughout the universe. The docudramas shown on Television should supply more information on how Africa husbandmans suffer in bring forthing organic farm green goods.

The UK Fairtrade Foundation was established in 1992 by five charities engaged in undertaking poorness in developing states, including Oxfam, Traidcraft and World Development Movement. A figure of other administrations with similar involvements joined subsequently, among them Banana Link ( a little co-op that works towards a just and sustainable banana trade ) , the UK pupil administration People and Planet and Soroptimist International, an administration of professional and concern adult females. All six administrations are among the 15 UK Fairtrade Foundation charity stockholders as listed below:

Banana nexus

CAFOD ( Catholic Agency for Overseas Development )

Christian Aid

Wesleyan Relief and Development Fund

NFWI ( National Federation of Women ‘s Institutes of England, Wales, Jeysey, Guernsey and Isle of Man )

Nicaragua Solidarity Campaign

Oxfam

Peoples and Planet

Shared Interest Foundation

SCIAF ( Scotish Catholic International Aid Fund )

Soroptimist International

Tearfund

Traidcraft Exchange

United Reformed Church

WDM ( World Development Movement )

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Vision and Mission

The UK Fairtrade Foundation ‘s vision is

‘aˆ¦aˆ¦a universe in which justness and sustainable development are at the bosom of trade constructions and patterns so that everyone, through their work, can keep a nice and dignified support and develop their full potency. The UK fair-trade motion has been successful in its mission as most big retail merchants in UK are now utilizing its logo and trade name in their publicities.

‘aˆ¦.to transform trading constructions and patterns in favor of the hapless and disadvantaged. By easing merchandising partnership based on equity and transparence. Fair-trade contributes to sustainable development for marginalized manufacturers, workers and their communities. Through presentation of options to conventional trade and other signifiers of protagonism, the Fairtrade motion empowers citizens to run for an international trade system based on justness and equity. The UK fair-trade foundation has received positive support from assorted cardinal stakeholders, including Government.

The UK Fairtrade Foundation ‘s Mission is

‘aˆ¦..to work with concerns, community groups and persons to better the trading place of manufacturer organisations in the South and to present sustainable supports for husbandmans, workers and their communities, by

Bing a passionate and ambitious development administration committed to undertaking poorness and unfairness through trade. It has proved to prosecute corporate societal duty.

6Using enfranchisement and merchandise labeling, through the FAIRTRADE Mark, as a tool for their trueness development ends. This trade name is now taking to trade name in the UK.

Bringing together manufacturers and consumers in a citizen ‘s motion for alteration, peculiarly from developing states and really hapless state such as Malawi.

Bing recognized as the UK ‘s prima authorization on Fairtrade. Most prima retail merchants in UK are now utilizing the Fairtrade Mark.

FAIR-TRADE STRUCTURE

The UK Fairtrade Foundation is a company limited by warrant and a charity registered in England and Wales. It is governed by its Memorandum and Articles of Association as adopted in July 1992, which have been amended a figure of times.

The UK Fairtrade Foundation opened up its rank to other organisations in 2003, leting them to take part in the administration of Fairtrade and to portion their experience and expertness. Any administration using for rank of Fairtrade are expected to hold a strong development or consumer focal point, to lend to advancing Fairtrade among their ain protagonists and when appropriate to lend financially.

Fair-trade ‘s board consists of 12 Trustees, most of whom represent administrations associated with the UK Fairtrade Foundation, including agrarian administrations. They are appointed through the procedure determined by the Articles of Association.

Activities

The UK Fairtrade Foundation identifies four chief countries of activity:

Supplying independent enfranchisement of the trade concatenation and licensing usage of the FAIRTRADE Mark as a consumer warrant on merchandises.

7Helping to turn the demand for its goods and enabling manufacturers to sell to bargainers and retail merchants.

Working with spouses to back up manufacturer administrations and their associate webs

Raising public consciousness of Fairtrade and the FAIRTRADE Mark.

The FAIRTRADE MARK

The FAIRTRADE MARK is registered enfranchisement grade which the UK Fairtrade Foundation licences to administrations to utilize on merchandises in the UK that comply with FLO ‘s international Fairtrade criterions and contractual demands.

The value of UK retail gross revenues of merchandises with the FAIRTRADE MARK was ? 16.7 million in 1998, ?493 million in 2007 lifting to ?712.6 million in 2008. Bananas and java are the two biggest classs, with gross revenues in 2008 worth ? 184.6 million and ?77.9 million.

In September 2008, Starbucks, the international concatenation of java stores, announced its purpose to do all its espresso – based drinks sold in the UK and Ireland Fairtrade by the terminal of 2009. This will do Starbucks the universes ‘ largest purchaser of Fairtrade certified java by a broad border.

License FEES

Harmonizing to the UK Fairtrade Foundation, its policy on license fees is to run a system that is consistent and crystalline, equilibrating the demand for the UK Fairtrade Foundation ‘s work to be adequately resourced with the aim of maximising chances for manufacturer organisations. Fairtrade believes that any fees charged should be set at a realistic degree but should non move as a barrier to entry or as a distinctive to increase gross revenues.

8The retail merchant, the concluding commercial operator in the supply concatenation, pays a license fee to the UK Fairtrade Foundation for the usage of the FAIRTRADE Mark on certified merchandises. These fees provided the UK Fairtrade Foundation with 85 % of its income in 2008, and more than cover the cost of monitoring and enfranchisement of the FAIRTRADE Mark strategy. This is a major income beginning that contributes to operations of the Fairtrade Foundation.

Licenses

The UK Fairtrade Foundation aims to intensify the battle between purchasers and manufacturers by the sharing of market information and by increasing manufacturers ‘ capacity with the aid of the purchasers. The UK Fairtrade Foundation besides seeks to run into its aims of authorising manufacturer organisations and holding its manufacturers and purchasers commit to hanker -term relationships. Businesss whose merchandises are all Fairtrade certified are involved in these activities as portion of their operations.

The UK Fairtrade Foundation believes licenses have an progressively of import function to play in advancing its messages and back uping the Mark ‘s function as the UK Fairtrade Foundation ‘s alone enfranchisement label for its Fairtrade criterions. Those organisations which have the Mark applied to all their merchandises play an of import function in the communicating of Fairtrade ‘s messages. The UK Fairtrade Foundation can utilize publicity to foreground these trade names.

THE UK FAIRTRADE FOUNDATION ‘S PLANS FOR 2008 – 2012

In 2007, the UK Fairtrade Foundation conducted a major strategic reappraisal that sought the input of its stakeholders ( licenses, retail spouses, manufacturers, international co-workers and staff ) . The result was its five – twelvemonth scheme, published in February 2008. This was called ‘Tipping the Balance – the UK Fairtrade Foundation ‘s Vision for Transforming Trade 2008 – 12 ‘ , and sets out five strategic ends.

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To develop Fairtrade to widen and intensify its benefits for husbandmans, workers and their communities.

To construct farther support for Fairtrade across UK society.

To work with concern to guarantee more companies sell Fairtrade merchandises, and those that do travel from merely following with the criterions to a deeper committedness to impel Fairtrade gross revenues and market portion to a new degree.

To scale up activities, systems and work with spouses.

Increasing the UK Fairtrade Foundation ‘s impact on manufacturer ‘s lives: by 2012 it wants twice every bit many manufacturers to be profiting from selling Fairtrade goods in the UK, while those already providing the UK market are able to duplicate the proportion of the harvest they sell via the Fairtrade system.

Switching public sentiment and consumer life styles to do Fairtrade the norm: by 2012 it wants three quarters of people in Britain to acknowledge the FAIRTRADE Mark and what it stands for, and people from all parts of society to experience portion of a vivacious people ‘s motion for alteration.

Expanding concern battle with Fairtrade from merely conformity to deeper committedness: by 2012 it wants there to be a immense diverseness of companies in Britain bring forthing and selling Fairtrade goods in all countries of the market – including booming new and established companies dedicated to Fairtrade, eating houses, high street manner shops, multiple retail merchants, little concerns and a turning group of family trade names change overing to Fairtrade.

10Growing its portion of cardinal markets to impel gross revenues to a new degree: by 2012 it wants the UK market for Fairtrade merchandises to hold reached ?2 billion a twelvemonth – four times the current degree.

Scaling up and developing the Fairtrade system: by 2012 it wants the planetary Fairtrade system to be known as a beacon of good pattern in trade and development, enabling the voice of the poorest to be heard at the highest degree.

Tiping the Balance – The UK Fairtrade Foundation ‘s Vision for Transforming Trade 2008 – 12. ( Reproduced with sort permission )

EVALUATING THE SUCCESS OF THE FAIRTRADE MOVEMENT IN GENERAL

NUMBER OF RETAILERS

Off the shelf, The first three Fairtrade merchandises appeared on store shelves in 1994. Now more than 4,500 merchandises have been licenced to transport the FAIRTRADE MARK, including sugar, grapes, Mangifera indicas, avocados, dried fruit, bars, jams, rice, herbs & A ; spices, vinos, beers, ice – pick, flowers, athleticss balls, vesture, place ware, Palestinian olive oil and cosmetics.

SOCIETAL WELL – Being

Spending the Premium: The Fairtrade premium an extra amount for community development is used by husbandmans ‘ groups for many community undertakings, for illustration, edifice schools and medical clinics, supplying clean imbibing H2O and to fly organic transition strategies to assist husbandmans work for the hereafter.

PUBLIC AWARENESS OF FAIRTRADE

Recognition: A monolithic 72 % of the UK populace now recognize the FAIRTRADE Mark ( TNS September 2009 ) .

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CONTRIBUTING TO AFRICA

Fairer hereafter: more than 7 million people in Africa, Asia and Latin America benefit from Fairtrade – husbandmans, farm workers, and their households.

CONTRIBUTIONS TO BUSINESS FARMERS

Good concern: Agriculturists are at the bosom of the Cafe direct concern, have portions in the company, sit on the Board and are portion of the determination – devising procedure.

MASSIVE AWARENESS OF FAIRTRADE MOVEMENT

If 15 people recruit 15 friends and relations to the Fairtrade motion this month, and so they each recruited 15 people and that would do a antic 50,625 new Fairtrade protagonists.

OTHER POSITIVE RESULTS OF FAIRTRADE MOVEMENT

Time for tea: the first tea merchandises on the shelves transporting the FAIRTRADE Mark were clipper Sri Lanka Golden, Clipper Nilger Blue Mountain and Clipper Earl Grey Nilgiri.

Top towns: the first town to accomplish Fairtrade position was Garstang in 2000 – it has since been joined by more than 450 other towns. There are besides 100 Fairtrade Universities, 3,000 schools, more than 5,000 Fairtrade churches, 40 fair-trade temples and one Mosque.

Global entreaty: in 1994, the first Fairtrade certified merchandises came from Belize, India and Costa Rica – now Fairtrade merchandises come from 58 developing states all around the universe.

12Chocoholic: One of the first Fairtrade certified manufacturers, chocolate husbandman Justino Peck from Toledo Cacao Growers Association, a husbandmans ‘ co-op in southern Belize still sells his Fairtrade chocolate to Green & A ; Black ‘s who use it in their Maya Gold cocoa.

Decision

The Fairtrade Movement has operated successfully in advancing farm green goods from developing states, peculiarly from Africa and the Caribbean Islands. This is bettering the many lives of hapless provincial husbandmans in Africa such as Malawi.

The husbandmans were ab initio non acquiring any value from their farm green goods. This is no longer the instance as major retail merchants are utilizing the FAIRTRADE MARK which is now popular in Europe, including UK.