Fair Trade in LEDCs

Photograph of a Hippo Roller

Fair trade is a recent global movement which tries to make some elements of trade much fairer.

In most cases the emphasis will be on trying to ensure that producers in LEDCs get much better trading conditions, a better wage and will become increasingly sustainable.

The farmers and workers at the bottom of the supply chain, who actually work with the raw materials will be given a fair price and a fair reward for their efforts.

This means their quality of life should improve, as well as the long-term prospects for their children.

Fair trade products sometimes cost more in supermarkets in MEDCs, but many consumers consider this a small price to pay for the benefits they bring.

Illustration showing three of the advantages of fairtrade

Benefits of fair trade

  • Stable prices: Most fair trade products will have a fair trade minimum price that should cover the full costs of sustainable production – even if there was a fall in global prices.
  • Fair trade premium: Producers are paid a premium or an extra amount of money beyond the price of the goods so that the farmer/producer can invest in further machinery, seeds, education, healthcare or farm improvements.
  • Partnership: Producers will be much more involved in the decision-making processes that affect them. They can be involved in fair trade councils and committees that can make local decisions.
  • Empowerment: Many fair trade marks and organisations have been set up to help empower the small-scale farmer. Some products, such as coffee, cocoa, cotton and rice will certify farmers to be part of a fair trade council or organisation. This means that the farmers can get better representation and marketing for their product and they will also benefit from better working conditions and support for environmental sustainability.
  • Environment: Many fair trade organisations have led to massive improvements in environmental standards. Farmers are encouraged to cut down fewer trees and to protect their local environment and soils and they will be supported and paid to achieve this.
  • Child labour: Fair trade organisations have banned child labour – they are keen to support the education rather than the exploitation of children.
  • Access to new markets: Fair trade organisations also help farmers to reach new markets with their product.
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