Why Do Fair Prices Reduce Social Inequality?
1. Fairtrade makers are largely dependent on richer clients. The requirements of the fairtrade production take higher prices that are only affordable to the customers who are able and willing to pay more for a given product. That is against the fairness idea of the free trade policy, as it does not reduce social inequality.
2. The “Overproduction” argument is quite simple. Critics state that Fairtrade harms all non Fairtrade farmers. The reason being that Fairtrade farmers a given help and advice on how to increase crop yields and crop quality. The argument states that because of this farmers will produce more coffee which increases supply. As we all know if supply is higher than demand, then price goes down. The reason that FairTrade farmers …show more content…
Here’s where the trouble begins. The Fair Trade Foundation doesn’t actually monitor how much a retailer profits from the good being sold. Estimations from the states say that retailer are getting around $5 per lb extra with the producer only getting 2% of that. A similar story comes out of the UK with producers only getting between 1.6 to 18% of the profits. So whilst it is all well and good that the Fair Trade farmers are getting some financial reward and stability, it does seem a little unfair that the retailers at the other end are actually making an absolute killing.
4.Some argue that Fairtrade is simply a way for developed countries to appear to be doing their bit to help out underdeveloped and developing countries, when in fact it is just keeping them in a market system, that won’t actually allow them the long term freedom to break free of their low economical standards. A prime example being the previously mentioned point, that many farmers don’t actually see the economical benefits of the eventual profits made by retailers in developed
2. The “Overproduction” argument is quite simple. Critics state that Fairtrade harms all non Fairtrade farmers. The reason being that Fairtrade farmers a given help and advice on how to increase crop yields and crop quality. The argument states that because of this farmers will produce more coffee which increases supply. As we all know if supply is higher than demand, then price goes down. The reason that FairTrade farmers …show more content…
Here’s where the trouble begins. The Fair Trade Foundation doesn’t actually monitor how much a retailer profits from the good being sold. Estimations from the states say that retailer are getting around $5 per lb extra with the producer only getting 2% of that. A similar story comes out of the UK with producers only getting between 1.6 to 18% of the profits. So whilst it is all well and good that the Fair Trade farmers are getting some financial reward and stability, it does seem a little unfair that the retailers at the other end are actually making an absolute killing.
4.Some argue that Fairtrade is simply a way for developed countries to appear to be doing their bit to help out underdeveloped and developing countries, when in fact it is just keeping them in a market system, that won’t actually allow them the long term freedom to break free of their low economical standards. A prime example being the previously mentioned point, that many farmers don’t actually see the economical benefits of the eventual profits made by retailers in developed