Case study on Fair Trade

Submitted By
Akash S 18001
Abhinav B pinglay 18002
Gongalla Aishwarya 18003
Akshay Hegde 18004
Anand Sharma 18005
Anuradha Pradeep 18006
Chetan Gabbur 18007
Darshan GK 18008
Darshan S 18009
Submitted to Dr. Nilanjan Sengupta Devaki Skanda Batta 18010
Skanda Narasimha 18061
Main arguments for and against involvement of big
business in fair trade

From customers point of view

Customers assume that fair pay would fetch
reasonable profits for the farmers.
For fair trade Customers tend to believe that what they buy
matters and make a difference in the lives of
the agriculturists.

Most of the mark up price paid by the

customers to buy fair trade products go
Against fair trade into the hands of supermarkets. (BBC
programme, Wall Street Journal)
 Main arguments for and against involvement of big
business in fair trade (Cont.…)

From Supermarkets point of Supermarkets benefited as The actual idea of fair price
view they identified the opportunity was being practised in an
that the market for fair trade unethical manner.
products was blooming.

They enjoyed receiving huge mark ups on the fair trade products and gained
more profits while promoting themselves as good corporate citizens.
They exploited fair trade products for their own advantage and the consumers
were loosing out.
 Main arguments for and against involvement of big
business in fair trade (Cont.…)

From suppliers point of view-

For-
 Helped thousands of farmers to fund
their education, healthcare, which was
not possible under the old system.
 Fair trade emphasized on direct
purchasing from producers and
eliminated brokers, agents.
 Main arguments for and against involvement of big
business in fair trade (Cont.…)
Against-
 Small producers feared that the companies
would walk away from them after they make
use of the situation and they would end up in a
worse situation.
 Fairtrade reduces the incentive to diversify
crop production
 Larger plantations were paid a fair price for
their supply but the workers of the plantation
did not receive enough payment to feed their
families- This waters down the founding
principles of the movement.
 Lessons learnt from case
 Fair trade guarantees the produces income stability and benefit from
a social premium to fund developmental projects.
 Fair trade allows small business owners to become internationally
competitive: This means large scale buyers are unable to exploit
workers or force competitive cooperatives out of business because
pricing and distribution is handled equally when products are
imported.
 Price premiums: Fair trade products are sometimes priced higher
than others. Part of the difference is ploughed back into producer
communities in order to improve working conditions. This social
premium from fair trade has helped in education, healthcare and
training projects.
 Monitoring and enforcement of standards: Fair trade certification
will help to maintain a level of standardization.
 Fair trade helps to build equitable relationship with suppliers.
Thank you