The Protection of Consumer’s Rights: An analysis about Fairtrade

Sommario

Introduction. 2

Fairtrade: a possible solution. 3

History of Fairtrade. 4

Advantages of Fairtrade. 5

Ethical Objections to Fairtrade. 6

Fonti 7



















Introduction


The phenomenon of globalisation has affected every economic sector, including the food market.
Businesses today find themselves in a global market that is highly competitive and, consequently,
characterised by a high degree of uncertainty. It is therefore necessary to adapt, seeking to
increase their productivity while containing costs as much as possible. This trend has led to the
increasing use of homogeneous production methods and consumption patterns, with the consequent loss
of social and biological diversity.

On the one hand, some scholars have almost justified the loss of diversity by the resulting gain in
efficiency. However, other scholars point out how this loss negatively affects long-term
sustainability. Firstly, the use of pesticides, herbicides and insecticides is leading to increased
efforts to control the negative side effects of homogeneous cultivation, and secondly, dependence
on new production methods has led to the reorganisation of villages, regions and social structures
and the consequent loss of valuable local knowledge and traditional methods. In addition,
globalisation has increased land use and deforestation to make way for livestock farms with
catastrophic consequences for the environment in the long term. Food is essential for human life
and production must be geared towards sustainability. Finally, the spread of large multinationals
(e.g. McDonalds, Burger King, KFC), thanks also to the franchising mechanism, has almost completely
cut small producers out of the market and with them also the so-called "zero kilometre production"
(multinationals often obtain their raw materials from different countries than those where they
sell because the former are cheaper). From these obvious limitations of global markets, comes the
need for a form of trade that guarantees a fair price for customers and producers and ensures the
protection of the earth: "Fairtrade".






















Fairtrade: a possible solution


Since food is essential for the human organism, it is not surprising that fairtrade has spread to
many complex post-industrial societies. But what is fairtrade and how does it work?  Fairtrade is a
form of commerce that, by respecting a set of standards in the production and supply of a product,
aims to offer a product that protects the land at a fair price. This alternative trading system
aims to establish direct links between producers and consumers, bringing control to a food system
that, due to globalisation, has become distant and anonymous. The production circuit is
characterised by the so-called 'short chain': a production chain that aims to minimise the distance
between producer and consumer. In traditional trade, in fact, the steps leading to the final
consumer are multiple and contribute significantly to increasing the price of the final product.
Fair Trade therefore tries to get the products through 3 or 4 steps: producer, importer, trader.
The aim is to be able to offer a fair return to all, while maintaining a competitive final price.
Fin order for this circuit to work well, both producers and importers need to respect a number of
constraints.

For
importers:












·         Guaranteed minimum price for producers: if the price on the stock exchange goes up, the
price of the products obviously adjusts, but if it goes down, the producers are guaranteed a
"Threshold Price". In this way, producers do not suffer losses due to market fluctuations.

·         Minimum quantities and long-term contracts: efforts are made to purchase quantities of
raw materials that offer continuity over the years. The aim is to generate stability and
sustainability of the business in the long term.

·         Pre-financing: importers are responsible for advancing the costs of purchasing raw
materials so that producers do not have to resort to illicit financing (usurers). Payment is then
completed after delivery.

For producers:

·         Prohibition of using child labour: In this regard, it is worth remembering that Fair
Trade is committed not only to the protection of the land, but also to the protection of human
rights.

·         Use of renewable raw materials: the aim is to promote a circular economy that minimises
the waste of resources and encourages the recycling of materials.

·         Training expenses

·         Cooperation between producers: this is an essential element for the functioning of the
business. The benefits of sharing resources and expertise have a positive impact on advertising
campaigns and the quality of the final products.

·         Fair wages: Wages should refer to the laws of the place of production for those working
as employees.



History of Fairtrade


Fair trade has its origins in the United States where Ten Thousand Villages, a non-profit
organisation that markets handicrafts made by disadvantaged artisans, began buying embroidery from
Puerto Rico in 1946 and SERRV[1] (Sales Exchange for Refugee Rehabilitation and Vocation) began
trading with poor communities in the south in the late 1940s. The first formal 'Fair Trade' shop
selling these and other items was opened in 1958 in the United States. In Europe, Fairtrade began
to take off in the late 1950s thanks to Oxfam UK which began selling handicrafts made by Chinese
refugees in England. In 1964 the first Fair Trade Organisation was founded and in 1967 the import
organisation for Fairtrade products in the Netherlands: Fair Trade Original.  During the 60s and
70s, NGOs (non-governmental organisations) and many small producers from developing countries
(Africa, Asia, Latin America) began to realise the need for marketing organisations that offered
support and advice to producers in need. This led to the emergence of new fair trade organisations
with the aim of greater international equity. In 1968, developing countries turned to international
politics to communicate the message 'trade not aid'. Traders from disadvantaged countries rejected
simple economic aid, which could only be beneficial in the short term, but the establishment of
fair trade relations with disadvantaged populations so that their products could also be
competitive internationally. Since the mid-1970s, fair trade organisations have been meeting
formally at conferences every two years. Hence, in 1987, the European Fair Trade Association (EFTA)
was formed between the 11 most important fair trade organisations in Europe. Two years later the
World Fair Trade Organisation (WFTO) is also established. These organisations have enabled the
creation of a global network between fair trade organisations which has allowed the development of
international co-operation and, above all, has enhanced the image of fairtrade in the world.
Regional networks include Asia Fair Trade Forum (now WFTO ASIA), Fair Trade Co-operation in Africa
(now WFTO Africa and Middle East), the Associazione Latino Americana de Comercio Justo (now WFTO
Latin America) and IFAT Europe (now WFTO Europe). In the 1990s, Fair Trade began to spread rapidly
with the endorsement of European ministers and thousands of cities began to apply for Fair Trade
Status, committing to the fight against social exclusion and poverty. Fair Trade Status contributes
to the status of a city and enhances its image in the public eye. The first World Fair Trade Day
was celebrated on 4 May 2002 and has been repeated every second Saturday in May since then.  In
2011, WFTO members formed a working group with the aim of revolutionising the Fair Trade system by
creating a product label. In 2013 the new guarantee system (GS) was approved, which has 5
components: improved application procedure, self-assessment, peer visit, monitoring audit and Fair
Trade Accountability Watch. The GS can be applied to any type of trading organisation and is used
to certify that a company complies with Fairtrade standards. It is ultimately a guarantee to
customers and buyers that the producer has met the standards imposed by the WFTO and the Fairtrade
Code of Ethics. Fairtrade has been growing steadily in recent years thanks to all the improvements
it has made: from €0.83 billion in turnover in 2004 to an impressive €9.8 billion in 2018.




Advantages of Fairtrade


In conclusion, we can say that Fair Trade brings several advantages:

For producers:

·         Prices that aim to cover the average costs of sustainable production of their crop: a
vital safety net when market prices fall.

·         The Fairtrade premium: an extra sum of money paid on top of the selling price to generate
new investment.

·         Decent working conditions and prohibition of discrimination, forced labour and child
labour

·         Access to credit in advance before harvesting: it allows producers in disadvantaged
conditions to be able to buy raw materials without getting into debt with high interest rates.

·         It offers the possibility to look to the future with more confidence and to establish
solid relationships with customers since the "Short Chain" allows customers to know where the
product comes from and how it was made.

For consumers:

·         A product with the FAIRTRADE label means that producers and companies have met the strict
social, economic and environmental standards of fair trade. This ensures that the production is of
high quality.

·         Fairtrade products protect the land and help combat the ongoing climate crisis.

·          Fairtrade gives consumers the opportunity to connect with the people who grow the
products we like and need.












Ethical Objections to Fairtrade


Unfortunately, a number of problems with Fairtrade have emerged in recent years. The first is that
only a small part of the extra money that consumers pay for Fairtrade reaches the exporter. This
means that the so-called 'short chain' continues to have a multitude of middlemen who contribute to
raising the price as in traditional markets. Furthermore, Fairtrade controls the price paid to
exporters. It does not control what happens to the money, nor does it control how much reaches the
farmer. There can be no evidence for the claim "Fairtrade guarantees a fair price for the
producer". Moreover, 40% of the premium that goes to the Third World goes to trade and production,
rather than to social projects or an extra price for the farmer. This means that the promotion of
economic development in disadvantaged countries is still far from being achieved. At the end, 85%
of the organisation's income comes from licensing the use of the Fairtrade label and the remaining
14% from donations and government grants. Of this income 70% is spent on promoting the brand while
30% appears not to go to third world countries but to the foundation's running costs. All of these
elements contribute significantly to the mistrust of consumers in the fairtrade market and threaten
the disappearance of an organisation that is essential to the food well-being of the population and
to environmental sustainability.


















Fonti


http://dl.mozh.org/up/hanbook_of_organic_food_safety_9781845690106-.pdf

https://link.springer.com/article/10.1007/s10551-011-0972-0

https://link.springer.com/content/pdf/10.1023/A:1010795305097.pdf

https://wfto.com/about-us/history-wfto/history-fair-trade#:~:text=The%20earliest%20traces%20of%20Fa
ir,the%20first%20Fair%20Trade%20Organisation.

https://www.statista.com/statistics/271354/revenue-of-fair-trade-products-worldwide-since-2004/


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[1] A non-profit trade organisation that initially focused on helping refugees in Europe recover
economically from World War II. It then began importing products from developed countries with the
aim of promoting economic and social development in less developed countries