"Fairtrade" and Market Failures in Agricultural Commodity Markets

Author: Loraine Ronchi

Publisher: World Bank Publications

Published: 2006

Total Pages: 63

ISBN-13:

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This paper concerns an NGO intervention in agricultural commodity markets known as Fairtrade. Fairtrade pays producers a minimum unit price and provides capacity building support to member cooperative organizations. Fairtrade's organizational capacity support targets those factors believed to reduce the commodity producer's share of returns. Specifically, Fairtrade justifies its intervention in markets like coffee by claiming that market power and a lack of capacity in producer organizations 'marks down' the prices producers receive. As the market share of Fairtrade coffee grows in importance, its intervention in commodity markets is of increasing interest. Using an original data set collected from fieldwork in Costa Rica, this paper assesses the role of Fairtrade in overcoming the market factors it claims limits producer returns. Features of the Costa Rican input market for coffee permit a generalization of the results. The empirical results find that market power is a limiting factor in the Costa Rican market and that Fairtrade does improve the efficiency of cooperatives, thereby increasing the returns to producers. These results do not depend on the minimum price policy of Fairtrade and therefore can inform on its organizational support activities. Finally, the results also suggest that producers selling to vertically integrated, multinational coffee mills face lower producer price 'mark-downs' compared with domestically owned non-cooperative mills. This result contradicts the popular view that the increasing concentration of vertically integrated multinational firms accounts for a decline in producers' share of coffee returns.

Fairtrade and Market Failures in Agricultural Commodity Markets

Fairtrade and Market Failures in Agricultural Commodity Markets PDF

Author: Loraine Ronchi

Publisher:

Published: 2016

Total Pages: 63

ISBN-13:

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This paper concerns an NGO intervention in agricultural commodity markets known as Fairtrade. Fairtrade pays producers a minimum unit price and provides capacity building support to member cooperative organizations. Fairtrade's organizational capacity support targets those factors believed to reduce the commodity producer's share of returns. Specifically, Fairtrade justifies its intervention in markets like coffee by claiming that market power and a lack of capacity in producer organizations 'marks down' the prices producers receive. As the market share of Fairtrade coffee grows in importance, its intervention in commodity markets is of increasing interest. Using an original data set collected from fieldwork in Costa Rica, this paper assesses the role of Fairtrade in overcoming the market factors it claims limits producer returns. Features of the Costa Rican input market for coffee permit a generalization of the results. The empirical results find that market power is a limiting factor in the Costa Rican market and that Fairtrade does improve the efficiency of cooperatives, thereby increasing the returns to producers. These results do not depend on the minimum price policy of Fairtrade and therefore can inform on its organizational support activities. Finally, the results also suggest that producers selling to vertically integrated, multinational coffee mills face lower producer price 'mark-downs' compared with domestically owned non-cooperative mills. This result contradicts the popular view that the increasing concentration of vertically integrated multinational firms accounts for a decline in producers' share of coffee returns.

Fairtrade and Market Failures in International Commodity Trade

Fairtrade and Market Failures in International Commodity Trade PDF

Author:

Publisher:

Published: 2005

Total Pages: 526

ISBN-13:

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This thesis concerns an intervention in commodity markets known as 'Fairtrade', which pays producers a minimum 'fair' price and provides support to their cooperative organisations. Fairtrade justifies its intervention in commodity markets like coffee by claiming that factors like market power and producer organisation inefficiency marks down the prices producers receive ("producer price mark-downs"). As the market share of Fairtrade coffee grows. its intervention in commodity markets is of increasing interest. This is particularly true as international commodity policy also increasingly focuses less on the support and stabilisation of low prices. and more on enabling producers to increase their share of existing returns through gains in efficiency and profitability. Using an original data set collected from fieldwork in the coffee market for Costa Rica, the thesis assesses the role of Fairtrade in overcoming the market factors it claims limits producer returns. Careful research into farm-gate prices paid by milling firms and the detailed construction of an international benchmark price for Costa Rican coffee permit the construction of a producer price mark-down measure that informs on efficiency and market power. In addition to the role of Fairtrade, the measure permits the testing of hypotheses about what explains producer price mark-downs over mills and over time. Features of the Costa Rican input market for coffee permit a generalisation of the results. The empirical results find that market power is a limiting factor in the Costa Rican market and that Fairtrade does improve the efficiency of cooperatives, thereby increasing the returns to producers. The results also suggest that producers selling to vertically integrated multinational coffee mills face lower producer price mark-downs as compared to domestically owned non-cooperative mills. This result contradicts the popular view that increasing concentration of vertically-Integrated multinational firms account for a decline in coffee producer returns over time.

Growing Ethical Networks

Growing Ethical Networks PDF

Author: Cathy Farnworth

Publisher:

Published: 2012

Total Pages:

ISBN-13:

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In the last decade, the "fair trade" of agricultural products and food has emerged as an important tool for creating markets for poor and small-scale farmers and simultaneously promoting pro-poor development. At its most basic, fair trade supports two processes: (1) explicit on-the-ground development for some of the most marginalized and poor actors in international agricultural commodity chains' smallholder farmers and plantation workers; and (2) clearly presenting and making visible the relations sustaining international commodities to consumers. In short, fair trade works to connect Southern producers with Northern consumers through international trade networks dedicated to community development.

Fair Trade Without the Froth

Fair Trade Without the Froth PDF

Author: Sushil Mohan

Publisher:

Published: 2010

Total Pages: 0

ISBN-13: 9780255366458

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The Theory of Fair Trade; Is Fair Trade Free Market?; Benefits & Detriments of Fair Trade; Alternatives to Fair Trade; Fair Trade as a Long-Term Development; Conclusion.

Fair Trade

Fair Trade PDF

Author: Alex Nicholls

Publisher: SAGE

Published: 2005-06-07

Total Pages: 289

ISBN-13: 1446233359

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′Today, Fair Trade finds itself at a crucial point in its evolution from alternative trading mechanism to a mainstream economic model. As the only certifier in the largest Fair Trade market in the world, TransFair USA has observed the explosive growth in consumer awareness and business interest in Fair Trade certification. New research into the progress of Fair Trade to date and, crucially, its key future directions is urgently needed. Fair Trade is therefore a valuable and timely contribution.The range and depth of the book is considerable. It is international in outlook and engages with a broad spectrum of theory and thinking. Its style is approachable yet rigorous. I would strongly recommend it to industry, academics, students, policy-makers and the interested reader in general′ - Paul Rice, CEO, TransFair USA ′This work - a powerful study of the maelstrom of issues and cross currents in the Fair Trade and Development movements is long overdue. Through case studies, quantative analysis and reasoned arguement, this work makes its case with cogent force′ - Hamish Renton, Product Manager Food You Can Trust, Tesco ′With the fair trade sector growing rapidly, it is vital that the concept is understood properly and the future potential mapped out. Fair Trade provides a comprehensive guide to all aspects of fair trade which make it a "must read" for everyone from casual buyer right through to seasoned producer. Here′s your chance to see how you can easily change the world for the better′ - Mel Young, editor-in-chief, New Consumer, Britain′s only fair trade magazine, www.newconsumer.org. Fair Trade is at a crucial moment in its evolution from alternative trading mechanism to mainstream economic model. This timely and thoughtful book looks at the strategic future for Fair Trade. Each chapter spearheads a key area of Fair Trade thinking and theory and the political, legal and economic context of Fair Trade is given careful scrutiny. Difficult questions are tackled such as `What is the role and value of corporate social responsibility?′ and `What is the brand meaning of Fair Trade?′ Throughout, readers are supported by: - Revealing case studies and useful data analysis; - Concise histories of different Fair Trade organisations; - Chapter summaries and conclusions.

The Fair Trade Scandal

The Fair Trade Scandal PDF

Author: Ndongo Sylla

Publisher: Ohio University Press

Published: 2014-02-01

Total Pages: 193

ISBN-13: 0821444891

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This critical account of the fair trade movement explores the vast gap between the rhetoric of fair trade and its practical results for poor countries, particularly those of Africa. In the Global North, fair trade often is described as a revolutionary tool for transforming the lives of millions across the globe. The growth in sales for fair trade products has been dramatic in recent years, but most of the benefit has accrued to the already wealthy merchandisers at the top of the value chain rather than to the poor producers at the bottom. Ndongo Sylla has worked for Fairtrade International and offers an insider’s view of how fair trade improves—or doesn’t—the lot of the world’s poorest. His methodological framework first describes the hypotheses on which the fair trade movement is grounded before going on to examine critically the claims made by its proponents. By distinguishing local impact from global impact, Sylla exposes the inequity built into the system and the resulting misallocation of the fair trade premium paid by consumers. The Fair Trade Scandal is an empirically based critique of both fair trade and traditional free trade; it is the more important for exploring the problems of both from the perspective of the peoples of the Global South, the ostensible beneficiaries of the fair trade system.

Fair Trade

Fair Trade PDF

Author: Laura T. Raynolds

Publisher: Routledge

Published: 2007-06-11

Total Pages: 324

ISBN-13: 1134002629

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This book explores the challenges and potential of Fair Trade, one of the world’s most dynamic efforts to enhance global social justice and environmental sustainability through market based social change. Fair Trade links food consumers and agricultural producers across the Global North/ South divide and lies at the heart of key efforts to reshape the global economy. This book reveals the challenges the movement faces in its effort to transform globalization, emphasizing the inherent tensions in working both in, and against, the market. It explores Fair Trade’s recent rapid growth into new production regions, market arenas, and commodity areas through case studies of Europe, North America, Africa, and Latin America undertaken by prominent scholars in each region. The authors draw on, and advance, global commodity and value chain analysis, convention, and social movement approaches through these case studies and a series of synthetic analytical chapters. Pressures for more radical and more moderate approaches intertwine with the movement’s historical vision, reshaping Fair Trade’s priorities and efforts in the Global North and South. Fair Trade will be of strong interest to students and scholars of politics, globalization, sociology, geography, economics and business.

Fair Trade for All: How Trade Can Promote Development

Fair Trade for All: How Trade Can Promote Development PDF

Author: Joseph E. Stiglitz

Publisher: Oxford University Press

Published: 2007-08-01

Total Pages: 647

ISBN-13: 0199887004

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Winner of the Nobel Prize in Economics and author of the New York Times bestselling book Globalization and Its Discontents, Joseph E. Stiglitz here joins with fellow economist Andrew Charlton to offer a challenging and controversial argument about how globalization can actually help Third World countries to develop and prosper. In Fair Trade For All, Stiglitz and Charlton address one of the key issues facing world leaders today--how can the poorer countries of the world be helped to help themselves through freer, fairer trade? To answer this question, the authors put forward a radical and realistic new model for managing trading relationships between the richest and the poorest countries. Their approach is designed to open up markets in the interests of all nations and not just the most powerful economies, to ensure that trade promotes development, and to minimize the costs of adjustments. The book illuminates the reforms and principles upon which a successful settlement must be based. Vividly written, highly topical, and packed with insightful analyses, Fair Trade For All offers a radical new solution to the problems of world trade. It is a must read for anyone interested in globalization and development in the Third World.

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