Posted by on Wednesday, September 25, 2013 Under: Fair Trade
Fair Trade - A talk by Nick Hunt
I found Nick's talk very interesting and it provoked several subsequent discussions with friends. He started by describing Free Trade as that which follows the laws of supply and demand with an underlying profit motive. Supply can be manipulated in international markets to the detriment of small local producers. Supply can be enforced when there is demand even against the best interest of the recipients - he cited the Opium Wars of the 19th Century when Britain forced a reluctant Chinese government to accept cheap opium from parts of the Empire. China has certainly turned the tables on British industries since those days!
By contrast, Fair Trade looks after the interests of the small local producer in the less developed world by calculating a fair price for the goods, finding a market and ideally negotiating a lasting contract. This is most familiar in relation to products, which are not produced in the countries being supplied e.g coffee, sugar, bananas etc. This must be a complex process putting a value on labour and materials and then adding some profit for both the producer and the community (2% was mentioned for the latter). I would like to know more about how this is achieved.
I was interested to know that although Fair Trade goods are often more expensive than conventional goods (he did cite the example of Palestinian olive oil that is sold at three times the price of more familiar imports, due to the enormous problems in exporting it), that is not necessarily the case. Fair Trade goods being cheaper presumably reflects the fact that labour is still cheap in the developing world.
Finally, Nick referred to "Shared Interest" - a bank in which he and many individuals invest and which lends to Fair Trade producers at (presumably) very modest interest rates for both investor and borrower.
Fair Trade is a rapidly developing form of market as shown by the range of products advertised by Traidcraft, which is but one of several organisations involved in such activity. I have subsequently learned that the coffee and biscuits provided at the innumerable committee meetings in Whitehall and in the Corporation of London are all supplied by Fair Trade companies!
In : Fair Trade