Essay Example on Date Benefits and Drawbacks of Fair Trade

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Student's Name Instructors Name Course Code Date Benefits and Drawbacks of Fair Trade Fairtrade is an initiative that primarily aims at improving the living standards of producers and farmers in underdeveloped and developing countries Its central goal is to set prices for products avail credit financing services to producers and establish a sustainable buyer seller relationship Additionally the initiative helps in community development projects offer improved social goods as well as maintain fruitful worker organizations Fair Trade functions by certification process that requires producers and suppliers stick to established objectives Primarily the chief aim of developing Fair Trade revolves around providing an alternative high end market that will benefit impoverished producers and workers Through fair trade producers make socially and environmentally responsible products Moreover producers benefit from loans extended contracts and relatively reasonable prices intended to make them more financially stable Through Fair Trade cooperatives and communities people receive premiums accordingly Notably some non Fair Trade local farmers and producers benefit from heightened buyer competition due to causal sequence The initiative provides numerous opportunities for manufacturers to maximally utilize organization resources necessitated by organization capacity building management of stakeholders relationship a useful organization of internal and external environment and satisfactory accounting practices In fact Fair Trade organization members develop resilience to external shocks and gain the confidence to deal with specific situations Ideally Fair Trade enables producers and farmers make considerable income at the lowest cost of production Also these initiatives market products to local and expansive markets that poor producers or farmers could not reach In essence they produce a small niche market for producers who enjoy more of the final retail price of their merchandise


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Concerning the goods sold Fair Trade labels serve as a motivating factor to consumers who perceive the products as responsibly produced However most of what people term as Fairtrade turns out to be corruption schemes to oppress the poor Initially inspection and certification processes were devoid of any charges Currently members must pay a variety of costs and fees like application certification and certification renewal fees Organization and management of Fair Trade advocate for maintenance of up to date policies and bureaucracies that attract some costs Consequently campaigning for Fair Trade items invites massive charges that eat up a relatively large portion of the price premium Typically producers receive a significantly reduced net bonus The proponents of Fair Trade suppose that it tends to promote economic development and help the poor by improving their living standards In contrast the systems and all its operations are unfair to its members They offer slight improvement of prices to a few of their primary producers ignoring most of their members and perhaps leaving them worse than before According to most of the marginalized farmers and producers fair trade is insignificant due to its discriminatory practices and inability to adhere to their needs Admittedly the poor maintain their usual economic status as the initiative sustains non competitive farmers while withholding necessary changes that can change posterity future through diversification and constructive mechanization Developed as a result of the coffee crisis which occurred two and a half decades ago Fair Trade emerged as trading blocks that would assist farmers and local producers get best prices during price fluctuations


Nevertheless their designs became irrelevant with time and are currently deemed to decline in popularity Mostly the economic volatility prompt ethically conscious buyers shift to new fashionable interventions that incorporate the prevailing trends The new initiatives prioritize entrepreneurship as opposed to price fixing Undeniably Fair Trade lures the less fortunate in the agricultural sector into government like controlled incentives denying them the opportunity to consider other alternatives The antagonists suggest that the only way for the poor and marginalized farmers and manufacturers to gain substantial success is by joining the free trade Controlling trade beguiled in the name of maintaining justice is economically imprudent The move grants a few people more power creating an enabling environment for corruption while restricting chances and increasing prices for an ordinary person Instead of relieving poverty and underdevelopment the system ultimately harms the poor As a result the majority of the farmers and producers receive insignificant compensation due to corrupt nature bureaucracies and unending costs and fees For example approximately ten percent of the premium paid by consumers for Fairtrade reaches the producers The capability of Fair Trade to reach out to the marginalized producers is questionable Sophisticated entry requirements illustrate how cumbersome it is to participate and earn some benefits Furthermore promotional campaigns seem to mention that Fair Trade is naturally inequitable and any item that does not bear its trademark confirms indecent trading Conversely it is unquestionably wrong since it fails to comprehend that other trading relationships benefit consumers Producers workers and farmers more than Fair Trade and sometimes cost friendly compared to Fair Trades Mutual respect and upholding the interests of all the stakeholders creates and strengthens long term conventional trading relationships The principal aim of Fair Trade involves changing the financial status of people in economically disadvantaged areas by offering the best prices for their goods giving them credit facilities and marketing their products The initiative despite all its benefits exploits the poor through corruption many maintenance costs complex entrance requirements and locks them out from experiencing critical alternatives and cultivating their entrepreneurial abilities The trading systems in the world are changing while consumer habits are shifting making Fair Trade outdated


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