How does FairTrade help sustainable development? Thursday, April 20, 2017 How does FairTrade help sustainable development? Lesson objectives; To develop a greater understanding of sustainable development. To develop a greater knowledge of how FairTrade helps sustainable development. To be able to explain how FairTrade encourages sustainable development economically, socially and environmentally. (level 7) To be able to describe how FairTrade is a form of sustainable development. (Level 6) To be able to identify the advantages and disadvantages of FairTrade. (Level 5)

Starter- Quick re-cap What is trade? What is FairTrade? How does FairTrade help farmers?

Fair Trade - chocolate Fair Trade is where producers are paid a price for their product that covers the cost of production- despite changes in the price at market. Fair Trade products are often more expensive because an additional 20% is charged to consumers, called a social premium, this is invested in the local communities producing the products.

‘Everyone should buy FairTrade’ Totally agree Totally disagree

Advantages and disadvantages of FairTrade? Consumers have to pay more for FairTrade products. Fair trade gives farmers a fairer price for their goods. Farmers are trained in the best farming methods, which are good for the environment. The companies that sell FairTrade products often miss lead their customers as to where the product actually comes from. The social premiums (profit from Fair Trade) go towards paying for schools and healthcare. Most FairTrade items such as soap and clothes are sold in specialised stores and therefore brought less frequently. No child labour is allowed if farmers are part of FairTrade.

How do MEDCs benefit... Consumers know they are purchasing a product which is ethical, no child labour, organic, fair price, from co-operatives that are democratically run. Consumers can directly trace their purchase. Consumers can have a direct influence on the quality of life of LEDC producers through the goods they purchase. LEDC producers have more income to purchase MEDC processed goods (?).

Potential Drawbacks.... Niche market, therefore has a limited impact. It continues to support areas where there is overproduction. Critics suggest it encourages further overproduction by non-fair trade producers, therefore lowering prices further. It doesn’t encourage the development of secondary processing, which would generate higher prices. Market share drops during economic difficulties. It doesn’t solve the unfair trading practices which limit the development of LEDCs.

What is FairTrade? Fairtrade is an alternative approach to trade and is based on a partnership between producers and consumers. Fairtrade offers producers a better deal, for example there is a fixed price for products like cocoa when the world market prices fall below a level that would sustain the farmer. Fairtrade also pays the Fairtrade premium which is an additonal sum of money to be spent on community projects. This allows them the opportunity to improve their lives and plan for their future. When a product carries the FAIRTRADE Mark it means the producers and traders have met Fairtrade Standards. http://www.fairtrade.org.uk/products/chocolate_products/default.aspx

How do LEDC producers benefit... Farmers receive a fair and stable price for their products. Sell direct to the global buyers, cuts out local markets, maximising profits. Partial pre-payment allows more effective long-term financial planning. Producers have the opportunity to improve their lives through a social premium. Through co-operatives producers have greater collective bargaining with purchasers and supplies. Helps diversify into new markets and products, from ones where there is overproduction, via cheap credit. Help and advice with farming practices, thereby maximising yields.

What is sustainable development? In order for development to be completely effective it needs to be sustainable. Sustainable development has three main pillars economic, social and environmental. This means that trade must help development in a sustainable way. FairTrade therefore encourages sustainable development. Economic- improvement of human welfare- e.g. farmers are paid more for their crops Sustainable Development Social- enrichment of lifestyles e.g. farmers can send their children to school. Environmental- protection of natural ecosystems e.g. not spraying pesticide

Helping sustainable development or not? Farmers spray pesticide all over their crops to prevent pests eating them. Farmers get a fairer price for their crops and are able to send their children to school. Social premiums from FairTrade help to improve schools and hospitals. Farmers are trained in the best methods of production so that the soil is protected. Farmers use harsh methods to farm the soil eroding it. Children help out on farms instead of going to school. Farmers are given free trees to plant to help prevent soil erosion so that the nutrients stay in the soil to grow crops.

Chocolate that makes a difference Theo Chocolate owner Joe Whinney believes that customers will pay more for their candy bars if they know they are investing in improving the lives of cocoa bean harvesters in the Democratic Republic of Congo. Ben Affleck is making the same bet. http://www.cbsnews.com/video/watch/?id=50136247n (4 minutes, 15 seconds)

Task: Either write a letter to a local Houston supermarket or to the chocolate companies to persuade them to stock/ produce fair trade

What your letter should include (success criteria): An explanation of what fair trade is An explanation of who buying fair trade makes the farmers in LEDCs life better Results of your questionnaire about fair-trade (pick suitable questions and present these as graphs- these graphs should be annotated to help explain the results.) An analysis of your results to explain why fair trade should be stocked in these supermarkets or produced by the chocolate companies. Things to consider: Layout and presentation Graphs (with annotations) Using suitable language

FairTrade case study: Divine http://www.divinechocolate.com/us/about-us Have a look at the Divine Chocolate website for a case study

The chocolate companies CADBURY http://news.bbc.co.uk/2/hi/business/7923385.stm http://www.forumforthefuture.org/greenfutures/articles/fairtrade-gets-boost-cadbury-dairy-milk http://www.forumforthefuture.org/greenfutures/articles/making-chocolate-last HERSHEY http://www.fastcompany.com/1693089/hershey-gets-not-so-sweet-kiss-fair-trade-month

Solutions to problems in the chocolate trade Chocolate companies to buy cocoa direct from farmers. Chocolate companies should then be accountable for the working conditions on cocoa plantations that supply them – e.g. by inspecting the cocoa plantations they receive cocoa from. This is what FairTrade does, however, some companies may not want to go through the FairTrade system. Fix the world price for cocoa at a price that provides a living wage for farmers. Chocolate companies to help farmers e.g. to diversify so that they have the skills to grow new crops such as pineapples – chocolate companies have already played a role in this e.g. Cadbury. Chocolate companies to carry the fair trade logo so that a fixed and fair price is paid. Individuals to buy more fair-trade chocolate. Fair-trade gives farmers a guaranteed price for cocoa that provides a living wage as well as a fair-trade premium (extra amount of money that can be spent on community projects). Harkin-Engel Protocol, also known as the Cocoa Protocol, was signed into law on September 19, 2001. This states that the governments of cocoa producing states must inspect and report child labour on cocoa plantations. It includes the involvement of the cocoa companies. However, it does not require cocoa companies to post ‘slave free chocolate’ on their products as was originally suggested. The requirements of this protocol have not yet been fulfilled, however, certain directives have received funding – for example: “the aim to improve the livelihoods of cocoa growers by providing infrastructure, farmers organisations and educational facilities in cocoa producing communities”. Change world trade rules to employ a free trade system rather than a FairTrade system

Free Trade versus FairTrade http://smallbusiness.chron.com/trade-vs-fair-trade-1683.html

Criteria Level Description 5 You are able to describe how the trade system of the world works. You are able to describe how FairTrade works. You are able to describe the benefits and disadvantages of FairTrade. You use key terms appropriately and are able to structure you essay in an appropriate way. 6 You are able to fully describe and begin to explain how the trade system of the world works. You are able to fully describe and begin to explain how FairTrade works. You are able to fully describe and begin to explain the advantages and disadvantages of FairTrade for the different stakeholders involved economically, socially and environmentally. You recognise how FairTrade can lead to sustainable development. You are able to use key terms appropriately and can reach a plausible conclusion. 7 You are able to explain how the world trade system works and recognise how it is unfair for some stakeholders involved. You are able to explain how FairTrade works. You are able to explain the advantages and disadvantages of FairTrade for the different stakeholders involved economically, socially and environmentally. You are able to describe how FairTrade can lead to sustainable development. You primary sources of evidence (from questionnaire) to support your arguments. You present some of your findings graphically through maps and graphs. You are able to use key terms and reach a consistent conclusion.

Level 8+ 7 You are able to explain and evaluate how the world trade system works and recognise how it is unfair for some stakeholders involved. You are able to explain how FairTrade works. You are able to analyse the advantages and disadvantages of FairTrade for the different stakeholders involved economically, socially and environmentally and you show an appreciation of the different views You are able to evaluate how FairTrade can lead to sustainable development. You use well researched case studies and primary sources of evidence (from questionnaire) to support your arguments. You present your findings graphically through maps and graphs. You are able to use key terms throughout and reach a consistent conclusion.