The problems and benefits of fair trade
The many benefits of fair trade are clear once one learns that its main goal is to alleviate poverty in developing countries and inculcate the value of sustainable development. Fair trade aims to create more opportunities for producers facing economic disadvantage over multinational companies. Because it also aims for sustainable development, both workers and producers are being offered much better trading conditions than before.
There are five main benefits of fair trade that can easily be seen.
The first is that it increases the income of the producers of the farmers. This is achieved through two steps. The price of the good is paid upon at an agreed and guaranteed fair price. The distribution channels involved in marketing the good is also reduced thus the producers get a larger share form the price of the good.
Second benefit is that because they now have a larger share of the pie, both farmers and workers have extra income with which to improve their lives. The price of a specific good is typically computed to cover the cost of both sustainable production and livelihood. A premium is also added to the price to be used as investment for development projects. These projects include building schools, funding scholarships and even used to fund low-interest loans for farmers and workers.
Third of the five benefits of fair trade is that is involves greater environmental protection. The certification being used to market fair trade products does not only show where the good comes from and who benefits from it. It also tells consumer how the good was made and manufactured. For agricultural goods for example, the use of some pesticides is not allowed and hence giving consumer greater satisfaction in knowing that the goods are safe.
The fourth advantage is that farmers are able to obtain a better and stronger foothold in the world market. Because buyers deal directly with the farmers, the farmers are able to get good prices for their products in the market.
Fifth, fair trade provides a closer link to the producers and consumers. Most consumers nowadays are environmentally conscious and thus want to know more about their products. In addition, consumers also want to know just how much the ones who originally make the products are getting. Thus in the end consumers become satisfied with the quality of their products and the farmers on the other hand get satisfaction from knowing that they got what they ought to from their goods.
These are just a few of the many benefits of fair trade has. For most consumers, knowing where the product came, who benefits from it and how it was made makes the purchase all the more fulfilling.