The effects of fair trade on the coffee industry: An overview

Résumé du document

There are many definitions for Fair Trade, however, none of which have been accepted as a standard definition. The Fair Trade Foundation, Oxfam and Traidcraft have agreed the following common definition of Fair Trade: "Fair Trade is an alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising and by campaigning."

Fair Trade is appeared in the beginning of 1960s at the same time in Europe and in North America. But it is only since the last 15 years that it really developed. It has registered a very good growth since the end of 1990s according to the increased promotion Fair Trade has received through media interest, and pressure group for fairer trading practices. One of the first products concerned has been and still be the coffee. "Fair" coffee only represents 3% of world transactions. Its example is important because it allows one to understand in which context, "Fair Trade" has been developed.

Coffee is a main commodity of North-South exchange (just after petrol/oil). Contrary to petrol prices, which are under control of OPEC since1973 (Organization of Petroleum Exporting Countries), history of coffee is different. Between 1970 and 1980, coffee market was regulated by an international agreement controlling the prices, like the model of European Common Agricultural Policy (CAP). Since 1980, liberalization subjected the courses to important variations. It is important to notice that "Fair Trade" was born when European Community created the CAP to sustain the farmers' countries members.

Extraits

[...] Oxfam. “Mugged poverty in your coffee Fitter & kaplinsky. gains from product rents as the coffee market becomes more differentiated? A value chain analysis” International Coffee Organisation Oxfam. “Mugged poverty in your coffee Scotland, Helen. “Fair Trade: a study of ethical consumerism with particular reference to the coffee industry” Oxfam, (2002). Mugged poverty in your coffee cup URL: http://www.Fair Trade.org.uk URL: http://www.traidcraft.co.uk Blackstock Lorraine. [...]

[...] The effects of Fair trade on coffee industry There are many definitions for Fair Trade, however, none of which have been accepted as a standard definition. The Fair Trade Foundation, Oxfam and Traidcraft have agreed the following common definition of Fair Trade: “Fair Trade is an alternative approach to conventional international trade. It is a trading partnership which aims at sustainable development for excluded and disadvantaged producers. It seeks to do this by providing better trading conditions, by awareness raising and by campaigning.” Fair Trade is appeared in the beginning of 1960's at the same time in Europe and in North America. [...]

[...] In order to succeed in this way, a new trade world has to be created which allows developing countries to compete globally. Secondly, developing countries have to realize that they have a voice and should stand together to fight for what they know is right. Therefore, it is important that they let their voice be heard but in a manner which benefits them. Finally, it is essential that consumers are educated on the aims of Fair Trade and why it was established, this would allow them to realize why products are so expensive. [...]

[...] However, manufacture of the final product is carried out in the developed countries in which the commodity is consumed because the infrastructure in the developing countries is not sufficient to allow manufacture of finished product.[5] Coffee has a low value-to weight ratio which means that when the coffee is harvested it is as its lowest value as a raw material, a very small percentage of its retail price. price paid to farmers for their coffee for both Robusta and Arabica has fallen appallingly low. In 1997 it started on a steep decline, hitting a 30 year low at the end of 2001 and still hovering around that level in June 2002. [...]

[...] Fair Trade to be sustainable it has to be incorporated into mainstream retailers, Fair Trade could achieve this better if they work together with these retailers”.[9] I. References a. Web Sites Coffee UK January 2006. Mintel [Online] URL: http://academic.mintel.com/sinatra/academic/search_results/show&& typ e=RCItem&page=0&noaccess_page=0/display/id=173697 [23 April 2007] Fair Trade.[Online]. URL: http://www.Fair Trade.org.uk [01 March 2007] Fair Trade. [Online]. URL:http://en.wikipedia.org/wiki/Fair_trade [02 March2007] Fitter and kaplinsky gains from product rents as the coffee market becomes more differentiated? A value chain analysis”. [Online] URL: www.ids.ac.uk/ids/global/pdfs/productrents.pdf [30 April 2007] International Coffee Organisation. [Online] URL: http://www.ico.org [26 February 2007] IFAT. [...]