FairTrade

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  • Fair Trade
    • what they do
      • they change the lives of people who grow things we love
      • change the way trade works through better prices, working conditions and a fair deal for farmers in developing countries
        • set up in 1982
          • the concept has been around for 40 years
      • there are over 1.65 million farmers and workers and 1,226 producer organisations across the fair trade system
        • about 5 million people benefit from fair trade in 58 countries
    • definitions
      • tariffs: taxes paid on imports, make imported goods more expensive.
      • free trade: when countries don't charge tariffs or quotas to restrict trade with each other
      • Quotas: limits the amount of goods imported usually primary (affects poorer countries)
      • Agricultural Subsidy: financial support form the governments to help farmers
      • Trading groups: countries that are grouped together to increase the level of trade between them by cutting tariffs and no trade with non- members
    • free trade
      • can reduce the development gap, allows poor countries to trade
      • World Trade Organisation (WTO) aims to make trade easier and remove barriers
        • one of these barriers is Agricultural subsidy
      • rich countries can pay subsidies, and can make their products cheaper. this goes against free trade
      • an example of a trading group is the European Union (EU)
    • Case Study
      • Cocoa from Ghana
        • West Africa: worlds largest  producer of cocoa beans
        • most of packaging and processing done in Europe
        • EU charges 7.7% import tariff on cocoa powder and 15% on chocolate, nothing on cocoa beans
          • Ghana is forced to export the beans instead of making chocolate as it is more valuable
      • Ugandan coffee farmers
        • over 90%have joined the Gumutindo coffee co-operative to gain economies of sale
        • earn extra income from Fairtrade Premium (not possible with individual farmers trying to sell coffee)
        • first stage of processing the coffee beans is done on the farm (more valuable than unprocessed beans), then sent to the warehouse for milling before being packed from export where roasting takes place.
        • the processing of the beans adds value to the product and increases the farmers income
        • Fair trade helps the parents pay their  children's school fees

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