Do Fairtrade products really benefit local farmers or does the extra premium go to the retailer?

Question

I read in a newspaper recently that the supermarkets (eg Sains, Waitrose) take the bulk of the profits made from selling Fairtrade products and that the local farmers really didnt see much of the proceeds......can anyone expand on this from an economic perspective (not a social one)

I am from the UK.

This question has nothing to do with free trade......and I know what the difference is thanks!

Answer 1

I have read articles and seen tv programmes about this subject and the consensus seems to be that these products provide a stable, set amount to the farmer which means they know how much they will receive when selling their produce. This gives them stability and means they can plan for the future.

However, the supermarkets have in the past, knowing that consumers will pay a premium for this product thinking that the whole difference goes to the farmer, have added their own premium on top.

This creaming off the top is in bad taste and as consumers have become more aware, the customer service aware supermarkets have decreased this practice. I'm sure they still get something out of it though.

In the UK the supermarket which continually comes out best when issues of fairtrade, green issues, organic etc are discussed is Waitrose.

Answer 2

There was a good article about how the fair trade of bananas has has saved the Island of St Lucia from economic melt down.
Just 5 Years ago the big banana companies (mainly American) where undercutting the local farmers, and many where going out of business.
Today, thanks to fairtrade, the island is reaping the benefits by investing in schools and infrastructure.

Of course there are problems with any system, but I think Fairtrade is as 'fair' as any

Answer 3

I read a similar article and it also seems only a specific few get to be fairtrade farmers or providers anyway, the remainder stay poor. However, those that are in the scheme get reasonable rates of reimbursement, even though the supermarket chains obviously make the lions share

Answer 4

WHAT COUNTRY ARE THOSE NEWSPAPERS FROM AND FOR THAT MATTER WHERE ARE YOU FROM?

When you are able to form a logical question please try again, I will be glad to give you my time.

Free trade and fairtrade are two different things, The laws on fairtrade are to help the consumer, Free trade is to offset Imports and exports. Farmers are effected by government supports based on exports.

Answer 5

Try this address:
www.fairtrade.org.uk