Globalization becomes the current trend of the world. People can easily enjoy foods coming from across the border. When having a cup of coffee in Starbucks, people drink the coffee beans from Africa or when having a dinner, people eat rice from Asia. It all thanks to the trading system. Unlike trade in general, Fair trade gives farmers more benefits. According to Fair trade International (2011), the sales of Fairtrade certified products grew 15% and in 2009, Fairtrade certified sales amounted to approximately €3.
4 billion worldwide from 2008 to 2009.Thus, Fair Trade has become one of the fastest growing markets in the world with more than 70 countries where Fair trade products are sold. The stories of Fair trade seem to be successful but it bases on other elements behind that perfect picture. To begin with, people should know the definition of Fair Trade while using it. Fair trade is an organization helping people in developing countries to export their products at better prices. They create changes for producers and workers to secure themselves with the sustainable development.
They offer not only better prices, but also decent working conditions, local sustainability, and moreover fair terms of trade for people in the developing countries. There are three principles that Fair trade organizations must follow (Munoz 2011). The areas its concerns are economic development, environmental development and social development. The first principal assists the producers to cover the cost of the sustainable production by letting the buyers to pay the minimum price.The second principle requires workers and producers to grow their products using safe and environment friendly agricultural methods.
For example, they must minimize the use of chemicals on the products, maintaining the soil and the water and also managing waste accurately. Finally, it recommends the producers to create a well-organized structure. It should be transparent and accountable. In addition, the workers and producers must provide fully information about their products and producer organizations. Fair trade is also encouraged to have an honest advertising, marketing techniques.To become a successful Fair trade organization, the producers and farmers shouldn’t just follow the principles; they also have to concern about other elements while operating.
Let’s divide the elements into two types: external and internal element. The first thing to notice in the internal reason is the local fair wages and fair working conditions. The main meaning of Fair trade is about assisting people in developing countries, in order for them to have a job. Fair trade producers are guaranteed a minimum price with an additional premium for certified organic products.Workers are paid at least minimum wages. With ordinary trade, workers in some Pacific Rim countries cannot earn enough to support their families.
Majority of Vietnamese workers earn around two dollars per day but they have to work more than ten hours. The workers always feel tired and it will cause measureless trouble to all the system. This rarely happens to workers of Fair trade organization. They know that guaranteeing a fair local wage would empower developing countries to raise their labor standards.
Furthermore, the working condition is also being taken care of.Workers from Fair trade groups must have freedom of association and a safe working environment. The second factor of the successful Fair trade is creating the direct connection between workers and small-producers to their markets. By eradicating the middleman, Fair trade organization ensures the maximized profits for the producers.
The Fair trade organization also provides guidance about skills and capacity for farmers (Fair trade International 2011). For instance, they help with financial management training and give advice on product development.Consequently, the workers and producers get to know about management skills as well as techniques which they can’t discover by themselves. Thus these advices can be used in the production process to improve the quality of the products. Moreover, Fair Trade organization often prepays producers so they have the money to cover the costs of raw materials.
The cultural aspect is also needed for the success of Fair trade. The products are made in Asia or Africa but the primary end-users are Western people. Therefore, all the products are obliged to adapt to Western culture but still preserving the local cultural traditions and identity.Fair trade organization also provides cross-culture understanding to help customers understand the true value and the origin of the products they buy. It is the stories of the poor farmers, workers from the developing countries.
It is all about customers to give the respect to culture, the products as well as the poor farmers and workers. Then, the community factor represents a great part of the success. Environmental sustainability is taken care of as well. Modified crops are prohibited and organic products are supported.
The Fair trade helps organization (2009) realized that protecting people will help protect the ecosystem. Moreover, they also realize that protecting the ecosystem will protect people from harmful chemicals, waste water and preserve the natural resources for the future generation. According to Fair trade helps (2009), over 80% of fair trade coffee is shade-grown organic coffee. Coffee grown under natural forest preserves habitat for wildlife including plants and animals. Best of all, most fair trade coffee is organic, which protects coffee workers, their families and the consumer from toxic chemicals.Moreover, poor farmers in developing countries are self-reliant group; they depend strongly on Fair trade organization to gain better profits.
The organization works with the typical projects with the purpose of giving education to farmers and their children, health clinics, community child care facilities, and organic certification for farms (Fair trade helps 2009). In other words, by paying more attention to the workers and farmers’ lives, the yield is improving. Farmers don’t have to worry about difficulties. Moreover, they have more knowledge and the technique of the producing process.Hence, the final outcome will become better.
Customer behavior is the external element, which producers and farmers can’t take control of. As people may know, the price of the Fair trade labeled products is always higher than the normal one. Therefore, it is not really a great choice for low-income people. The preference may have been toward cheaper, non-labeled alternatives. People would rather pay a lower price despite the negative social and environmental consequences (Kamil Kanji, 2010). The majority of consumers who are educated to degree level are aware of Fair Trade.
They are also called “ethical customers”. These people prefer Fair trade products despite the fact that they may not have a higher disposable income which allows them to spend more money on food. The main reasons for purchasing Fair Trade products are fairer price for the producers, better taste and quality. Gunne Grankvist & Hans Lekedal wrote in their article “Values and eco- and fair-trade labelled products” (2007) that Chinnici et al.
(2002) have found that health and environmental concerns are the reasons why people are using organic, eco-labeled and Fair trade labeled products.In addition, Kamil Kanji (2011) realized that there is a link between Fair Trade products with better taste and quality. According to Gunne Grankvist & Hans Lekedal (2007) people with lack of personal security feel more sensitive and also positive to other people’s lack of security - as a consequence they favor disadvantaged farmers. However, the money they spend on Fair trade labeled products is worthy. Hence, they can support poor people. Especially, they receive better products since it has been grown with less chemical constituents.
In other words, the success of Fair trade can’t leave behind customer element.Without ethical customers, the Fair trade labeled products is just the more expensive product. In conclusion, even though Fair Trade cannot be seen as an answer to root causes of poverty and inequality, they guarantee protection against unequal competition in international markets to a minority of small-scale producers. It is sure that Fair Trade is part of a community development and one positive element of globalization. Consequently, customers continue using Fair trade products and they hold the key role in the success of Fair Trade.
