Thoughts on Fair Trade Products

[mek42]

Yes, it is. The participants are agreeing to pay a price for the product that isn't driven by supply and demand.

...

If Fair Trade goods truly weren't governed by supply and demand they would not be sold, as there would be no demand willing to pay the price premium associated with the certification.

However, there is such a demand, as eloquently described by IntlMom. The market, recognizing such a demand, has offered a product meeting that demand. The particular demand is smaller than the demand for the non-certified product, leading to a higher price. Further, the demand is willing to pay a premium, thus supporting the higher pricing.

The products are in the end, wants, not needs, with readily available lower costing alternatives to those for whom pricing is the main concern. I don't understand how this can be an example of price fixing. The premium involved with fair trade goods is just the market targeting a portion of the demand that is willing to pay the premium.

An analogy is that you will pay more to have your taxes done by a licensed CPA rather than at H&R Block in part because you are paying a premium for the professional certification.

[Greebo]

If Fair Trade goods truly weren't governed by supply and demand they would not be sold, as there would be no demand willing to pay the price premium associated with the certification.

You are talking about demand side. The price fixing is on the supply side. The columbian coffee farmers would have, and HAVE accepted far lower payments for their product than what "fair trade" offers.

I don't understand how this can be an example of price fixing.

Because the companies who sell fair trade coffee are deliberately paying more than they HAVE to for the product they're buying.

Y'all have been conditioned to think of "price fixing" as a negative. Fair trade is an example of price fixing as a positive.

Look I didn't intend to start a hubbub by calling fair trade what it is. I only mentioned what it is to illustrate what it is NOT - it's not necessarily green.

[pita1213]

Most fair trade items aren't items I buy anyway. Though most of the fair trade chocolate is out of my price range. I just try to buy from more responsible companies.

[Telephus44]

I support Fair Trade, but it's pretty low on my list, and a lot of other factors come first. For coffee, I specifically look for shade-gown over Fair Trade.

And yes Greebo, you're right - it is price fixing on the other side.

[janeysaurus]

My interpretation of the "Green" umbrella includes advocation and support for environmental sustainability (of which farming practices and alternate economic methods would be a part).

My interpretation of "Fair Trade" is that it promotes environmental and economical sustainability on a more global scale by preventing labor exploitation and encouraging safe farming practices for those products many of us cannot source locally.

I cannot post links yet, but Googling TransFair USA and looking at their Fair Trade Overview page, they have a nice explanation of how they define Fair Trade for their certification.

So, to me, Fair Trade would fall under "Green," in a similar way as a person deciding to go vegetarian or shop at farmer's markets would be considered "Green."


That said, my purchasing Fair Trade products tend to be fairly incidental. The only real product I regularly buy that offers Fair Trade is coffee, and for that, I tend to be more focused on flavor and roasting company.
Starbucks could convert their entire line to Fair Trade coffee/tea and I still wouldn't buy from them, and not just because they sell overpriced craptacular burnt ass for beans. I tend to buy from local independent roasters...and I don't mean that in a snobby, coffee-elitist way, it's just we have a ton of local roasters in this city and I happen to know quite a few of them.

So my coffee priority list tends to go local indy shop->roast level->country of origin. If the type I'm currently buying is from a Fair Trade source, that's just economic Green gravy.


Oh, and I guess I indirectly purchase Fair Trade when buying ice cream, but that's just because I like Ben & Jerry's. Of course, buying Ben & Jerry's ice creams is basically buying the entire Green/Slow/organic food movement in a pint full of tasty, creamy goodness.

[morrisjlm3]

I learned that fair trade isn't necessarily "fair". The standards seem to be pretty low. The only thing I'm worried about are the products that don't flash their fair trade badges!

[OrganicJesse]

I hear "free trade" really just adds cents on the dollars for farmers... Is that true? Is this what we mean by price fixing?