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Fair Trade Day. Fair Trade Day Price Distortion Argument

Today in stores you can increasingly see products with special markings. These marks, as a rule, indicate that we are dealing with environmentally friendly products, and therefore not hazardous to health. Examples of such marks on trade items: “non-GMO”, “free of surfactants, parabens and SLS”, “made from natural raw materials”, “dermatologist approved”, etc. This fact perfectly illustrates the concept of “fair trade”. There is even a separate one dedicated to him international holiday- World Day fair trade, celebrated by all those interested in selling and purchasing the “right” goods every spring.

Information about World Fair Trade Day

There is no exact date for celebrating World Fair Trade Day. Each time it falls on a different day, but it always happens in May, namely on the second Saturday of the spring month. In addition, May is called the fair trade period. In 2020, World Fair Trade Day falls on the 9th of May.

It is not known for certain when the holiday appeared. It is organized and controlled by the World Fair Trade Organization. The purpose of this large-scale promotion is to bring to the awareness and awareness of sellers the need and principles of the strategy promoted by the celebration. Main goal world day fair trade - to ensure that manufacturers produce and further sell goods that meet international standards. This holiday is also an excellent opportunity for commercial companies involved in the sale of branded products to demonstrate themselves as fair traders.

World Fair Trade Day is a day for cultivating noble aspirations and condemning antisocial, inhumane actions that have become a habit for many manufacturers. The latter include:

exorbitantly high prices, exceeding the cost and purchase price of the goods by several, or even tens of times;

use of child labor (typical of third world countries);
paying their employees pittance wages at 12 or even 16 hours working day; when working around the clock and on night shifts;
production of goods in violation of technology and the use of products hazardous to health.

On World Fair Trade Day, organizers hold conferences, discussions, round tables, and thematic meetings of businessmen. There are also interesting exhibitions highlighting current problems in the field of economics and trade; exhibitions and seminars.

Historical background

World Fair Trade Day is a great opportunity to look into history. From time immemorial, the word “trade” has evoked not very pleasant associations in people. In the minds of our ancestors, this term was strongly associated with fraud. The fact that trade could be fair and just was not even thought of in those days - it seemed like something out of the realm of science fiction.

It was only in 1940 that such a concept was not only talked about, but the irrational idea began to be put into practice. A company called “10 thousand villages” appeared on the market, supplying developing countries with goods self made. These were textile items, embroidered accessories and other attributes, jute products, wicker souvenirs. The prices for these goods were set purely symbolically.

The second impetus for the formation of the fair trade movement occurred 20 years later. It was initiated by hippies who organized a protest against slave labor in production and farms. Following this, the first ethical goods store opened in the UK, where the riot actually took place. It sold products made using various techniques of arts and crafts and crafts.

The shop used an alternative trading strategy in its work. Its operation was based on the principle of “we help by selling.” The store quickly found its customers, and the idea itself turned out to be so popular that similar retail outlets began to open in other European countries.

The movement itself, called fair trade, arose another two decades later, in the 80s. Thanks to the activities of its participants, mandatory measures such as labeling and certification of goods were introduced into production. Basically, the “Fairtrade” mark was applied to products of various types, meaning:

firstly, the use of environmentally friendly raw materials in the manufacture of the product;
secondly, the compliance of working conditions at the enterprise that manufactured the products with international standards;
thirdly, the absence of chemical emissions into the soil during the production of goods;
fourthly, manufacturing products without involving minors in the process.

Among other things, the social movement now has its own individual motto: “Fair trade is not begging.”

Basic principles of fair trade

Let's get into this unusual holiday World Fair Trade Day let's talk about the principles of fair trade.

1. Transparency of the entrepreneur’s actions and the creation of regular reports and his activities. A company that adheres to the principle of fair trade in its work maintains safe, honest relationships with trading partners, and helps small traders develop their business.

2. Establishing a fair price for products. Unlike the capitalist regime, this movement provides for decent wages for participants in the production process and products - the manufacturer himself.

3. Organization of good working conditions. They must comply with the law different levels and ILO acts and are aimed at ensuring the health safety of people involved in the production process and their moral satisfaction from the functions performed.

4. Protecting nature. This principle is manifested in the fact that raw materials for the manufacture of goods are used from local sources, energy from renewable resources. It should also be noted here that we minimize the release of harmful substances into the atmosphere and the environment during the production process.

5. Provide development opportunities to low-income entrepreneurs. This phrase, in fact, is the key goal of the World Fair Trade Organization. It implies the fight against poverty through the sale of our own goods.

6. Prohibition of the use of free labor and child labor in the production process. Anyone should receive a decent income for their participation in the production of environmentally friendly products. Children may also be involved in this process, but exclusively on a voluntary basis and, unless the working conditions are harmful to health, do not deprive one of strength or violate the safety of the child. In addition, minors in this case receive the same amount of money for their work as adults.

7. No discrimination based on gender, religion or race. All people, no matter what, have the right to participate in the production of goods. In addition, they are allowed to form trade unions.

World Fair Trade Day

Every year on the second Saturday of May, the day is celebrated when the whole world rethinks the main principles of fair trade in a philosophical and practical way. Manufacturers and traders from different countries hold thematic business meetings, expositions and conferences. In 2019, the holiday is celebrated on May 11.

The noble “mission” of the holiday is to promote the principles of fair trade and honest business in accordance with international regulations. The main topics of condemnation are child labor, slave bondage, inflated prices and the destruction of ecosystems. Since ancient times, trade has been associated with fraud and deception.

It just so happens that the very concept of fair trade has an irrational meaning. However, in 1940 the commercialization of fair chain goods began. The 10 Thousand Villages organization began supplying handmade goods to developing countries. The product was more of a symbol confirming the donation.

By the mid-1980s, a new social movement called fair trade emerged. All products became subject to mandatory certification and labeling. A general motto was coined: “Fair trade is not aid.” The Fairtrade marking is evidence that eco-friendly raw materials were used in the production of the product, there was no release of chemicals into the soil, working conditions complied with international standards and child labor was not involved.

Products with a “fair label” are often more expensive than their analogues, but many consumers consciously prefer this category of products. Labeling allows you to track the entire commodity chain, from the origin of the product, production, delivery, to the act of purchase.

Fair trade principles: creating conditions for small and unprofitable companies to enter the market, absolute business transparency and a simple participation algorithm, fair price according to location, which covers the built-in cost and development costs, equality of men and women in the status of movement participants, humane working conditions.

The main group of goods are export products from third world countries. The product register includes: bananas, coffee, tea, honey, oranges, cocoa, fruits, vegetables, spices, nuts, wine and more. Manufacturing companies that adhere to fair trade laws label their products with a single mark. Manufacturer consolidation advocates labor, ethical, social and environmental standards. The organizer of the movement is the World Fair Trade Organization.

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Among the events traditionally organized on this day are exhibitions, seminars, conferences, in which manufacturing companies from around the world take part, promoting the principles of fair trade, which must comply with international standards. In addition, these activities are aimed at creating a negative public relations to slave labor and drawing people's attention to the environmental conditions of the production of goods.

Fair Trade is a social movement designed to defend international standards and public policy regarding labeled and unlabeled products. The focus is on goods exported from developing to developed countries.

Fair trade goods can include foods such as tea, coffee, cocoa, bananas, as well as handicrafts and clothing. The main thing is that they are produced without the use of slave and child labor.

For example, the themes in different years were the words: Fair Trade + Ecology (calling on manufacturers to produce environmentally friendly and safe products), Trade for people: Fair Trade - your world (TRADE FOR PEOPLE - Fair Trade your world).

Detailed Description:

(date for 2018) World Fair Trade Day is celebrated annually on the second Saturday of May, and May is considered Fair Trade Month.

Led by the World Fair Trade Organization, the Day allows approximately 350 producer groups and fair trade organizations from 70 countries to commit to fair trade.

In addition, these events are aimed at creating a negative public attitude towards slave labor and attracting people's attention to the environmental conditions of the production of goods. The main thing is that they are produced without the use of slave and child labor

World Fair Trade Day is celebrated every year on the second Saturday of the last month. This time the holiday falls on the eleventh of May.

The holiday, which is hosted by the leadership of the World Fair Trade Organization, provides an opportunity for three hundred and fifty groups and organizations from seventy countries to declare that they take part only in fair trade.

Traditionally, on this day it is customary to organize various exhibitions, seminars and conferences, where manufacturing companies from all countries around the world are invited to participate. They are trying to convey to the population the importance of fair trade, which must comply with generally accepted global standards.

In addition, these events are aimed at creating a negative public attitude towards slave labor and attracting humanity's attention to the environmental conditions of the production of goods.

Fair trade goods can include foods such as tea, coffee, cocoa, bananas, as well as handicrafts and clothing. The main thing is that they are made without the use of slave and child labor.

This is more of a global program that is needed in order to increase people's knowledge about migratory birds, their habitats and routes of movement.

At first the holiday was celebrated in May, but since last year another date was added - October. As a prerequisite for the creation of such a holiday, they took international convention on the protection of birds, which was approved more than a hundred years ago, although Russia joined it much later.

Various public events of the Day, among which the most famous are bird festivals, educational and educational programs, bird watching under the guidance of specialists, excursions - call for the protection of the habitats of migratory birds around the world. Each year they are dedicated to a specific topic.

Egyptian mythology, showing gods with elements of birds, the Nazca monuments found in Peru, prove the significant influence of migratory birds on ancient civilizations. And today there are organizations that depend on migratory birds for their livelihood.

Bird migration as a phenomenon is also a key indicator of biodiversity, ecosystem health, and climate change. Thanks to the activities of migrating birds, the balance of the ecosystem as a whole is maintained - for example, some plants are pollinated by migrating birds.

Russia will celebrate Astronomy Day on May 11

This holiday is also celebrated twice a year - in autumn and spring. Not only professionals of this industry are used to remembering him scientific discipline, but also ordinary amateurs.

The holiday was established more than forty years ago in the United States of America. The leader of one of the astronomical associations decided that there was no need to force people to travel huge distances in order to visit famous observatories. It is better to install telescopes in places where they will be accessible to everyone.

Astronomy Day is organized and supported financially by fourteen organizations, among which the most influential are the Astronomical League, the Pacific Astronomical Society, the Royal Astronomical Society of Canada, the International Planetarium Union, and the American Astronomical Society.

During Astronomy Week and especially on Astronomy Day itself, thousands of astronomy clubs, scientific museums, observatories, planetariums in many countries hold many interesting events, aimed at raising public awareness about astronomy and our amazing universe.

These include public lectures by famous cosmonauts, teleconferences, joint projects, and mass displays of the starry sky. IN educational institutions They organize special classes on the basics of astronomy, and at exhibitions you can taste space food.

Fair trade

Fair trade(English) Fair trade listen)) is an organized social movement advocating fair standards for international labor, environmental and social regulation, as well as public policies regarding labeled and unlabeled goods, from crafts to agricultural products. In particular, this movement reverses special attention for the export of goods from developing to developed countries.

A common topic when discussing fair trade is criticism. existing organization international trade as "unfair". Fair trade advocates argue that fluctuating commodity prices do not guarantee a living wage for many producers in developing countries, forcing them to take out loans with extremely unfavorable terms. Fair trade advocates also believe that market prices do not reflect the true cost of production, which should include both environmental and social components of cost.

Fair Trade aims to address these issues by establishing an alternative system for trading ethical goods that promotes economic development and offers better trading conditions for producers and workers in developing countries.

Fair trade is often promoted as an alternative or replacement to free trade.

The second Saturday in May is International Fair Trade Day. On this day, in many countries of Europe and North America, various actions and events are held to draw attention to the social movement and talk about its goals. In 2009, Fair Trade Day coincided with the 9th May holiday.

Story

First attempts to commercialize fair trade products in national markets northern hemisphere were undertaken in the 1940s and 1950s by religious groups and various politically oriented non-governmental organizations. "Ten Thousand Villages" Ten Thousand Villages ) - a non-governmental organization within the Mennonite Central Committee - and SERRV International became the first (in and 1949 respectively) to develop fair trade supply systems in developing countries. All products were almost exclusively handmade, from jute items to cross-stitch, and were sold mainly in churches and fairs. The product itself often served only a symbolic function of confirming the donation made.

Solidary trade

Fair Trade Products

The fair trade movement in its modern form formed in Europe in the 1960s. During this period, fair trade was often perceived as a form of political opposition to neo-imperialism: radical student movements began to protest against multinational corporations, and critical voices emerged arguing that traditional business models were fundamentally flawed. The motto that emerged at that time - “Trade not Aid” - received international recognition in 1968 thanks to the UN Conference on Trade and Development, which with its help emphasized the need to establish fair trade relations with countries in the developing world.

In 1969, the first specialized store selling Fair Trade goods - the so-called. worldshop - opened in the Netherlands. The initiative aimed to bring fair trade principles to the sector retail sales by selling almost exclusively only those goods that were produced under fair trade conditions in developing countries. The first store was run on a volunteer basis, but was so successful that dozens of such stores soon appeared in many Western European countries.

During the 1960s and 1970s, an important part of the Fair Trade movement's work was finding markets for products from countries that had been excluded from mainstream trade channels for political reasons. Thousands of volunteers sold coffee from Angola and Nicaragua in many worldshop, on the outskirts of churches, in their own homes, V public places, using the product as a way to convey a message: give developing country producers a fair chance in the global market. The alternative trade movement blossomed, even if not in terms of sales volume, but in the fact that dozens of ATOs were opened on both sides of the Atlantic, many worldshop, there have been many well-organized actions and campaigns against exploitation in support of the right to have equal access to world markets and buyers.

Craft production as opposed to agricultural goods

In the early 1980s, a major problem facing Alternative Trade Organizations was that the novelty of some fair trade products began to wear off, demand stopped growing, and some artisan products began to look "tired and old-fashioned" on the market. The downturn in the craft market has forced fair trade advocates to rethink their business model and goals. In addition, fair trade advocates during this period became increasingly concerned about the impact of falling agricultural prices on poor producers. Many then decided that it was the responsibility of the movement to combat this problem and look for innovative methods in order to respond to the approaching crisis in this industry.

In subsequent years, agricultural commodities played an important role in the growth of many ATOs: successful in the marketplace, they provided a sought-after, renewable source of income for producers, and served as an excellent complement to ATO's craft products. The first Fair Trade agricultural products were tea and coffee, soon followed by dried fruits, cocoa, sugar, fruit juices, rice, spices and nuts. If in 1992 80% of the turnover was made up of handicraft products, and 20% - agricultural products, then in 2002 the ratio was 25.4% and 69.4%, respectively.

Rise of labeling initiatives

Sales of fair trade products only really took off when the first certification initiative for fair trade products emerged. Although Fair Trade was kept afloat by growing sales volumes, sales took place in relatively small shops - worldshop- scattered throughout Europe and, to a lesser extent, North America. Some felt that these shops were out of touch with the lifestyle of modern developed societies. The inconvenience of having to go to a separate store to buy one or two types of products was too much for even the most loyal customers. The only way to increase sales opportunities, was to offer Fair Trade goods where purchases are usually made - in large retail networks. The problem was how to expand sales without forcing buyers to simply accept on faith the fair origin of a particular product.

The solution was found in 1988, when the first Fair Trade certification initiative appeared - the organization Max Havelaar, created in the Netherlands under the initiative Nico Roozen, Frans Van Der Hoff and Dutch non-governmental organization Solidaridad. Independent certification allowed goods to be sold outside of specialized Fair Trade stores - in regular retail networks. This enabled products to reach more customers. Labeling allowed buyers and sales agents to trace the origin of a product to ensure that the product benefited the manufacturer at the end of the supply chain.

The idea was picked up: in subsequent years, similar non-profit organizations appeared in other European countries and North America. In 1997, the similarities between these organizations led to the creation International Organization Fair Trade Labels - FLO Fairtrade Labeling Organizations International ). FLO is an umbrella organization. Its tasks: issue standards, support, inspect and certify disadvantaged producers, and harmonize the Fair Trade message within the movement.

In 2002, FLO issued the sign . Its purpose is to make the mark more visible on supermarket shelves, simplify international trade and simplify procedures for both manufacturers and importers. Currently, this certification mark is used in more than 50 countries and on hundreds of different products.

Fair Trade Today

Sales have skyrocketed in the last decade. The growth is especially noticeable among labeled products: in 2007, these sales amounted to 2.3 billion euros - a 47% increase compared to the previous year. As of December 2007, 632 producers in 58 developing countries have received fair trade certification from FLO-CERT.

Fair Trade Product Certification

The Fairtrade label is a certification system designed to help consumers identify products that meet Fair Trade standards. Supervised by a standards issuing body (FLO International) and a certification body (FLO-CERT), the system includes independent audits of manufacturers and traders to ensure that all required standards are met.

So that the product can bear the mark International Fairtrade Certification or Fair Trade Certified, its manufacturer must be FLO-CERT certified. Crops must be grown and harvested to FLO International standards. The chain of delivery must also be supervised by FLO-CERT to ensure the integrity of the product.

Fair Trade certification guarantees not only fair prices, but also the preservation of the principles of ethical consumption. These principles include adherence to ILO agreements such as the prohibition of child and slave labor, guarantees of workplace safety, the right to form trade unions, commitment to human rights, fair price to cover the cost of production, community development, and protection and conservation of nature. The Fair Trade Certification system also develops long-term business relations between seller and buyer, crop prefinancing, and greater transparency in the supply chain.

The Fair Trade Certification system covers an expanding range of products: bananas, honey, coffee, oranges, cocoa, cotton, dried and fresh fruits and vegetables, juices, nuts, rice, spices, sugar, tea, wine. Companies that comply with Fair Trade standards can display the Fair Trade label on their products.

Sign International Fairtrade Certification was released by FLO in 2002 and replaced 12 marks used by various Fairtrade labeling initiatives. The new certification mark is currently used throughout the world except the USA and Canada. Sign Fair Trade Certified, used in these two countries, should be replaced in the future International Fairtrade Certification.

Membership in the Fair Trade organization IFAT

In order to complement the Fair Trade certification system and allow producers who mostly use manual labor, sell your goods also outside specialized retail outlets Fair Trade (worldshops) The International Fair Trade Association (IFAT) released a new mark in 2004 to identify fair trade organizations (rather than products, like the marks discussed above). Called FTO, it allows buyers around the world to identify registered Fair Trade organizations and ensures that all standards regarding working conditions, pay, environment, use of child labor.

Fair trade and politics

European Union

In 1998, the European Parliament adopted the “Resolution on Fair Trade” (OJ C 226/73, 20.07.1998), which was followed by the adoption by the European Commission of “Communication from the Commission to the Council on “Fair Trade” COM(1999) 619 final, 29.11. 1999.

In 2000, public institutions in Europe began purchasing Fair Trade certified coffee and tea. In the same year, the Cotonou Agreement made a special reference to the development of "Fair Trade" in Article 23 g) and in the Compedium. The European Parliament and Consular Directive 2000/36/EC also propose the promotion of Fair Trade.

In 2001 and 2002, several EU documents explicitly mentioned Fair Trade. Most notable are the 2001 Green Paper on Corporate Social Responsibility and the 2002 Trade and Development Meeting.

In 2004, the European Union adopted the document "Agricultural Commodity Chain, Dependency and Poverty - a proposed EU action plan", containing specific reference to Fair Trade as a movement "setting the trend towards more socio-economically fair trade" (COM(2004)0089).

In 2005, at the European Commission meeting “Coherence in development strategies - accelerating progress towards achieving the Millennium Goals” (COM (2005) 134 final, 12.04.2005), Fair Trade was mentioned as “a tool for poverty reduction and sustainable development» .

As a result, on 6 July 2006 the European Parliament unanimously adopted a resolution on Fair Trade, recognizing the progress achieved by the movement, proposing a pan-European Fair Trade strategy, defining the criteria that must be met under the banner of Fair Trade in order to protect it from unauthorized use and calling for more support for Fair Trade (resolution “Fair Trade and development”, July 6, 2006). “This resolution responds to the impressive growth of Fair Trade and demonstrates the growing interest of European consumers in responsible shopping,” said the Green Party MEP. Frithjof Schmidt during the plenary debate. Peter Mandelson, EU Commissioner for foreign trade, reported that the resolution will receive approval from the European Commission. “Fair Trade makes buyers think, and that's what matters most. We need a coherent strategy, and this resolution will help us."

Belgium

Belgian legislators discussed possible Fair Trade bills in 2006. In January 2008, legislators proposed possible interpretations and three proposals were debated. However, no consensus has yet been reached.

France

In 2005, member of the French Parliament Anthony Hertz published a report “40 opportunities to support the development of Fair Trade”. The report was followed in the same year by legislation calling for the formation of a commission to certify Fair Trade organizations.

In parallel with the legislative activities, in 2006 the French branch of ISO, after five years of discussion, adopted a reference document on Fair Trade.

Italy

In 2006, Italian legislators began a debate about bills relating to Fair Trade. A consultation process involving a wide range of stakeholders was launched in early October. To a large extent, a common interpretation of Fair Trade has been developed. However, the legislative project was suspended by the political crisis of 2008.

Netherlands

The Dutch province of Groningen was sued in 2007 by coffee supplier Douwe Egberts over an explicit requirement for the supplier to meet Fair Trade criteria: in particular, to pay producers a minimum cost and a development premium. Douwe Egberts, which sells many coffee brands based on its own ethical considerations, found these requirements discriminatory. After several months of litigation, the province of Groningen won. Coen de Ruiter, director of the Max Havelaar Foundation, called this victory a significant event: “it gives state institutions freedom in their purchasing strategy to require suppliers to supply coffee that meets Fair Trade criteria. Now, a consistent and meaningful contribution to the fight against poverty is made with every morning cup of coffee."

United Kingdom

In 2007, the Scottish and Welsh governments were actively trying to become "the world's first fair trade countries". In Wales, such a program was launched in 2004 by the National Assembly of Wales. In Scotland, First Minister Jack McCaonnell pledged that Scotland was committed to becoming a "Fair Trade Nation".

In June 2007, a parliamentary committee published a report on Fair Trade and Development, criticizing the government's "failure to adequately support Fair Trade despite pledges to help poor countries lift themselves out of poverty."

The committee's report examined a range of ethical trading schemes and concluded that Fair Trade is "the gold standard in trade relations with the manufacturer". He called for greater support for fair trade organizations both at home and abroad, and also recommended that responsibility for fair trade be placed on high-ranking government officials. The report also suggested starting a study into the possibility of labeling that would force suppliers to display how much they pay farmers and workers in the developing world for each specific product.

Standard Justification for Fair Trade

Implicitly, and often explicitly, Fair Trade indicts existing international trade organizations in injustice. Fair Trade advocates insist on the need for this mechanism, citing microeconomic market failures in the current system, the commodity crisis and its impact on developing country producers.

Free Trade and the Market Fiasco

All members of FINE and the Fair Trade Federation support the principles of free trade in theory. However, Alex Nichols, professor of social enterprise at the University of Oxford, argues that "key conditions on which classical and neoliberal trade theories are based are absent in agricultural societies in many developing countries." Perfect market awareness, perfect market access and credit, and the ability to change production techniques and products in response to market changes are fundamental provisions that are “completely ineffective in the context of developing country farmers.”

The example of coffee is particularly illustrative: “Because it takes three to four years before a coffee plant produces enough coffee, and up to seven before it reaches peak production, farmers find it difficult to respond quickly to market fluctuations. As a result, coffee supplies often increase when market prices fall. This leads to farmers increasing production volume even more during falling prices in order to reduce unit costs. As a result, a negative cycle is formed, which only intensifies the fall in prices.”

According to Fair Trade advocates, this example clearly shows how the absence of perfect microeconomic conditions can deprive producers of profits from trade, or even cause losses. Nichols says this may be generally true for some markets, but "within developing countries market conditions cannot be called those in which the producer clearly benefits from trade.” The existence of such market failures reduces the ability of trade to lift these countries out of poverty.

Fair Trade is an attempt to address these market failures by guaranteeing producers stable prices, business support, access to Northern markets, and generally better trading conditions.

Commodity crisis

Fair Trade advocates often point out that unregulated competition in the global market, even after the 1970s and 1980s, created a race to the bottom. During 1970-2000, prices for such major exports of developing countries as sugar, cotton, cocoa and coffee fell by 30-60%. According to the European Commission, "the ban on international economic interventionism of the late 1980s and the commodity market reforms of the 1990s in developing countries have left the commodity sector, and especially small producers, largely on their own to contend with market demands." Today, “manufacturers are in a state of unpredictability because prices for a wide range of goods are highly volatile and, in addition, subject to a general downward trend.” Losses in developing countries due to falling prices amounted, according to the Food and Agriculture Organization of the United Nations (FAO), to more than $250 billion in the period 1980-2002.

Millions of farmers depend on the price of their crops. In more than 50 developing countries, three or fewer exports account for the majority of income.

Many farmers, often simply having no other way to feed themselves, are forced to produce more and more, no matter how low the prices. Research has shown that the poorest in rural areas - that is, most of the population in developing countries - are hit the hardest by the recession. Agriculture creates over 50% of jobs for people in developing countries, and this accounts for 33% of their GDP.

Fair Trade advocates believe that current market prices do not reflect the true value of products. According to them, only a carefully designed system of minimum prices can cover the environmental and social costs associated with production.

Criticism

The growing popularity of Fair Trade has drawn criticism from both ends of the political spectrum. Some economists and think tanks see Fair Trade as a type of subsidy that inhibits growth. The left criticizes Fair Trade for inadequately opposing the dominant trading system.

Price Distortion Argument

Opponents of Fair Trade, such as the Adam Smith Institute, argue that, like other farm subsidies, Fair Trade attempts to set a price threshold that in many cases exceeds the market price, and thus encourages existing producers to produce more goods, as well as the emergence of new suppliers, which leads to excess demand. According to the law of supply and demand, excess demand can lead to a fall in prices on the non-Free Trade market.

In 2003, the Vice President for Research defined Fair Trade as "a well-intentioned scheme of economic intervention... doomed to fail." Fair Trade, according to Lindsay, is a misguided attempt to correct a market failure in which one flawed pricing structure is replaced by another. Lindsay's comments echo the main criticism of Fair Trade, arguing that it "encourages producers to produce more." Bringing producers at the beginning positive results, in the long term could, according to critics, negatively affect further economic growth and development. Economic theory believes that when prices are low due to overproduction, subsidies or other means of artificially raising prices will only exacerbate the problem, causing even greater overproduction and the involvement of workers in unproductive activities.

The Fairtrade Foundation responds to the price distortion argument by arguing that Fair Trade does not attempt to “fix prices”. “Rather, it sets a minimum price that ensures farmers can cover the cost of maintaining production. The minimum price is not a fixed price. This is the starting point for market price formation. Many farmers every day sell their goods above this minimum threshold due to the quality, type of coffee bean (or other product), and the special origin of their products. The minimum price mechanism provides the most vulnerable participants in the consumption chain with assurance that they will be able to cover their basic expenses in times of crisis. In effect, it provides a safety net that protects markets from falling below the level necessary to maintain constant production.”

The Fair Trade minimum price only has an effect when the market price is below it. When the market price exceeds the minimum price, the market price should be used.

Some academics, including Hayes, Becchetti, and Rosati, have also developed two counterarguments:

Fair trade in Russia

At the moment, Fair Trade as a social movement in Russia is poorly developed, consisting, on the one hand, of a small number of individual activists and small groups, and on the other, represented by units of producers (for example Clipper, Qi-Teas)

Notes

International Fair Trade Association. (2005).Crafts and Food. URL accessed on August 2, 2006.
Hockerts, K. (2005). The Fair Trade Story. p1
(English) . WFTO (June 7, 2009). Archived from the original on January 21, 2012. Retrieved June 24, 2009.
Fair trade history (Scott, Roy)
. International Labor Office. p6
Nicholls, A. & Opal, C. (2004). Fair Trade: Market-Driven Ethical Consumption. London: Sage Publications.
Renard, M.-C., (2003). Fair Trade: quality, market and conventions. Journal of Rural Studies, 19, 87-96.
Redfern A. & Snedker P. (2002) Creating Market Opportunities for Small Enterprises: Experiences of the Fair Trade Movement. International Labor Office. p7
Fairtrade Labeling Organizations International (2008). http://www.fairtrade.net/single_view.html?&cHash=d6f2e27d2c&tx_ttnews =104&tx_ttnews=41. URL accessed on May 23, 2008.
Fairtrade Labeling Organizations International (2008). www.fairtrade.net. URL accessed on June 16, 2008.
FINE (2006). Business Unusual. Brussels: Fair Trade Advocacy Office
Frithjof Schmidt MEP (2006). Parliament in support of Fair Trade URL accessed on August 2, 2006.