zaterdag 27 november 2010

A fair price for the local farmers?

Consumers pay more for fair trade products, but critical people are wondering how much of this fair price is actually paid to the local farmers.
Oxfam assures the farmers indeed receive a fair price. But it’s very difficult to determine precisely how much the farmers receive because market prices fluctuate. Every day, market prices increase and decline. Not only market prices, but there are also other factors such as transportation, country and quality that determine the price that farmers receive. Though it’s very difficult to fix a fair price, there do exist fair trade minimum prices.
Oxfam claims they really pay one third of the returns.  At first, I thought one third wasn’t a lot. But we may not forget the Oxfam organisations have to pay the co-workers and they also have to finance the yearly campaigns. Of course, Oxfam is some kind of charity institution, but an organisation cannot function without capital.
If all these factors are considered, we can conclude the developing countries do receive a so-called fair trade price. But I wonder what’s the use of paying a fair price if there’s a lack of knowledge? Maybe more is needed than just a fair price. In my opinion, it might be a better idea to encourage Western engineers to go to developing countries in order to help them expand decent infrastructure.

Justine Bleuze – Group 5

3 opmerkingen:


    Justine Bleuze - Group 5

  2. Indeed, there are lots of critics who always say that the money given to charity or fair trade organisations, doesn’t end up in the appropriate hands, but gets ‘lost’ somewhere in between your account and the farmer’s wallet.
    But as we are facing a very big company as Oxfam, there is, according to me, no possibility that they are doing some illegal activities. They have enough internal and external audits to ensure themselves and everyone else that the extra amount we pay, really finds its way to the farmers.

    One third may sound little, but we are talking about a really big sum of money. I even think that in developed countries such as Belgium, it rarely happens that the producer receives such a big percentage on the seller’s profits. So Oxfam is promoting a very honourable way of trading, but as they have to make sure they can continue their activities, they have to make profits!

    Bert Aelter - Group 5

  3. This subject reminds me about Lobke her article about Chiquita. For the second time we are being confronted with what seems to be a blind spot in the whole fairtrade theory: Are there black on white results of the initiatives?
    With this uncertainty still existing, people will keep being skeptical about the effectiveness of the system. Where does there money really go to?
    So, in this stage of increasing customer awareness about fairtrade, there seems to be a need for an official supervisor who can report to the outside world and monitors all the comings and goings.

    Jules Branswyck – Group 5