How does fairtrade help?

Answer 1

The philosophy behind Fair Trade is to ameliorate the relationship between power and international trade, which is most apparent in the global commodity chain. The global commodity chain is process and steps a certain commodity has to go through in order to be bought or consumed. For the context of Fair Trade, coffee is produced by producers around the world, sold to intermediaries or middle men, then the coffee is processed by a small number of multinational corporations (Nestle, Kraft, Proctor, Sara Lee) and then sold at the supermarket. Since the producers are dependent on the multinational to buy their products they have no way of bargaining a better price for the coffee. The price that the small producers receive is a small fraction compared to the price that the super market or the multinational corporations receive. The problem Fair Trade tries to ameliorate is the dynamic of power and the terms of trade. It creates a product line that tries to appeal to the more conscious consumer to give the small producers around the world a better price for their goods at a higher price.