Abstract
Many of Fair Trade’s disadvantaged producers exist in an environment of involuntary unemployment with no benefits, education, training, and unable to realize their own transaction costs (Hayes, 2006). A transaction cost is the price of participating in a market and includes developing, marketing, and selling a product. Poverty leaves producers vulnerable to exploitation. Coyotes or middle men, for example, come to rural agricultural areas to purchase farmers’ goods quoting market prices that are often much lower than the actual market value. Producers are unable to verify these prices and even if they did, they have no choice but to sell their product to the middleman at his price or not sell their product at all (Hayes, 2006). Some products were perishable and producers needed income so they often sold product at a loss, not even covering their transaction costs. Fair Trade however offered price protections, education, training, and market access that eliminated these exploitive practices. Instead of putting vulnerable coffee producers at a disadvantage, it creates a fair level of pay and opportunity by guaranteeing prices, improving production, and providing long-term market access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Similar content being viewed by others
Copyright information
© 2013 Tamara L. Stenn
About this chapter
Cite this chapter
Stenn, T.L. (2013). The Four Pillars of Fair Trade: Producers. In: The Cultural and Political Intersection of Fair Trade and Justice. Palgrave Macmillan, New York. https://doi.org/10.1057/9781137331489_4
Download citation
DOI: https://doi.org/10.1057/9781137331489_4
Publisher Name: Palgrave Macmillan, New York
Print ISBN: 978-1-349-46300-8
Online ISBN: 978-1-137-33148-9
eBook Packages: Palgrave Business & Management CollectionBusiness and Management (R0)