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Fair trade pros & cons

Updated April 17, 2017

Fair trade started with a vision in the 1940 to equalise the rights of poverty-stricken communities abroad. Some U.S. and European organisations started selling their handicrafts and produce for a fair price in developed countries. In 1990, a fair trade labelling system was started, and charities worked closely with Fair Trade USA and Fair Trade of other countries. Modern fair trade protects growers and farm labourers of crops such as coffee, tea and cocoa from exploitation by multinationals and middlemen.

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Better Living Conditions for Growers

One of the pros of the fair trade movement is the improvement in living standards and conditions of workers of small farms in coffee and tea growing regions. According to Fair Trade USA, influence from the Fair Trade involvement has improved communities with schools, rights for women, sound business knowledge, work safety procedures and much more. The communities are encouraged to be self sufficient.

Room for Improvement

Charles Cain from the Tea Retailer website explains that wealthy tea barons have taken advantage of the Fair Trade movement. According to BSR's article Child Labor Eradication in Nicaragua's Coffee Zones, there is a need for global intervention to protect children from exploitation. The Fair Trade movement has encouraged education for children. Fair Trade USA believes compulsory education for children to be vital for the progression of these countries; the literacy rate is increasing.

For The End User The Price Is Higher

Fair Trade coffee costs a little more than some other coffees that are non Fair Trade. This is due to the cost of labelling and administration costs. According to Fair Trade USA, which admits that consumers pay a little more for a cup of coffee, far more is going back to the grower and the community at large. Overall the extra cost of the coffee is still positive for Fair Trade, although some see the higher price as a negative.

Fair Trade Raises Cocoa Prices

According to Fair Trade Australia, the increase in cocoa prices and sponsored initiatives gives the producers a sweet deal; the extra money will finance farm improvement projects to help create a more sustainable future for many communities. While cocoa prices are high, the communities prosper. When the prices drop, the communities are protected by the minimum price floor.

Size of Fair Trade Farms

One of the disadvantages of Fair Trade for big business is the small scale largely organic farming which it promotes. While this is a positive for the environment, the small scale farming does not allow for larger-scale farming methods which attract business from bulk buyers. Larger buyers generally stay away from Fair Trade produce as they have less control over production methods and prices. This can be a disadvantage for the developing nation as a whole but does protect the small farmer from exploitation.

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