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Page 1: ENTR315 Learning Pack

Mohan, S. (2012) Fair Trade Without the Froth. The Institute of Economic Affairs

Nicholls. A & Opal.C (2005), Fair Trade: market driven ethical consumption, London, SAGE

Oxfam (2013) Fairtrade Coffee: Facilitators Guide. [online] Available at:

http://www.oxfam.ca/sites/default/files/Coffeekit2.pdf

[Accessed: 04/03/2013]

Redfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: ExperiRedfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: Experi-

ences of the Fair Trade Movement" Geneva: International Labour Office.

Ronchi, L. (2006) “Fairtrade” and Market Failures in Agricultural Commodity Markets. World Bank

Policy Research Working Paper 4011

Schmelzer, M. (2006) Is Fair Trade A Neoliberal Solution To Market Failures Or A Practical Challenge To

Neoliberal Trade And The Free Market Regime In General. UC Berkley

Tallontire, Anne. 2000. “Partnerships in fair trade: reflections from a case study of Cafe direct” Devel-

opment in Practice 10 (2).

Teasdale, S. (2011) ‘What’s in a Name? Making Sense of Social Enterprise Discourses’, Public Policy and

Administration, May 25, pp. 1-22.

REFERENCESCONTENTS

Fair Trade...................................................................

Structure of Fair Trade..............................................

History........................................................................

Facts...........................................................................

Issues & Challenges.................................................

Alternatives..............................................................

Question AnswersQuestion Answers...................................................

References...............................................................

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4

5

7

8

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1515

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FAIR TRA

DE:

FACTS, T

HEORY, ANSWER

S

FIND OUT MOR

E @ WWW.FAIRT

RADE.ORG.COM

Page 2: ENTR315 Learning Pack

Mohan, S. (2012) Fair Trade Without the Froth. The Institute of Economic Affairs

Nicholls. A & Opal.C (2005), Fair Trade: market driven ethical consumption, London, SAGE

Oxfam (2013) Fairtrade Coffee: Facilitators Guide. [online] Available at:

http://www.oxfam.ca/sites/default/files/Coffeekit2.pdf

[Accessed: 04/03/2013]

Redfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: ExperiRedfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: Experi-

ences of the Fair Trade Movement" Geneva: International Labour Office.

Ronchi, L. (2006) “Fairtrade” and Market Failures in Agricultural Commodity Markets. World Bank

Policy Research Working Paper 4011

Schmelzer, M. (2006) Is Fair Trade A Neoliberal Solution To Market Failures Or A Practical Challenge To

Neoliberal Trade And The Free Market Regime In General. UC Berkley

Tallontire, Anne. 2000. “Partnerships in fair trade: reflections from a case study of Cafe direct” Devel-

opment in Practice 10 (2).

Teasdale, S. (2011) ‘What’s in a Name? Making Sense of Social Enterprise Discourses’, Public Policy and

Administration, May 25, pp. 1-22.

REFERENCES

18

CONTENTS

Fair Trade...................................................................

Structure of Fair Trade..............................................

History........................................................................

Facts...........................................................................

Issues & Challenges.................................................

Alternatives..............................................................

Question AnswersQuestion Answers...................................................

References...............................................................

3

4

5

7

8

11

1616

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Page 3: ENTR315 Learning Pack

WHAT IS FAIR TRADE?

“Fair trade is an alternative approach to conventional international trade. It is a trading partnership between producers, traders or buyers, and consumers which provides a more equitable and sustainable form of exchange. It does this by providing better trading conditions and by raising awareness of conditions endured by workers in many countries.”

(Oxfam, 2013)

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Page 4: ENTR315 Learning Pack

STRUCTURE TODAY

FAIR TRADE INTERNATIONAL (FLO):

FLO: a non-profit association which sets Fairtrade standards, develops Fairtrade business and provides support to producers. FLO-CERT: an international certification company owned by Fairtrade International but which operates independently responsible for the inspection and certification of producer organisations and traders against Fairtrade standards.producer organisations and traders against Fairtrade standards.

THE WORLD FAIR TRADE ORGANISATION (WFTO):

WFTO: is the supporting global association of member organisations whom are committed to Fairtrade. WFTO certifies and regulates its Fairtrade members.The network is spit geographically as follows. - The Cooperation of Fair Trade Africa (COFTA) - The World fair Trade Organisation Asia (WFTO Asia) - The World Fair Trade Organisation Europe (WFTO Europe) - The World Fair Trade Organisation Latin America (WFTO Latin America) - The World Fair Trade Organisation Pacific (WFTO Pacific)

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Page 5: ENTR315 Learning Pack

HISTORY (EUROPE)

Late 1950’s – Oxfam began selling crafts made by Chinese refugees within their shops.

1964 – Oxfam created the first Fair Trade Organisation

1969 – The first third world was opened. They played an important role in the fair trade 1969 – The first third world was opened. They played an important role in the fair trade movement then and now as a point of sale and help to raise awareness. Fair trade or-ganisations and those organisations, which had fair trade as an ethos guiding their ac-tivities, were those that sold fair trade products. The Fair trade shops were the main way to sell the goods to consumers.

1960/70’s – There was a perceived need for Fair marketing organisations to provide advice, assistance and support to disadvantaged producers. Many NGO’s and socially motivated people from across the continents were involved in this.Alongside this there was the need to put across the message trade not aid. The aim was to establish better trade relations so that the less advantaged areas saw some ben-efit from selling their goods.

1960’s -From the 60’s onwards fair trade grew in response to poverty and its main focus was on craft products. This was run by large NGO’s such as religious agencies. They worked with people in the poorer areas to help establish organisations in those countries that would organise producers and help them export their goods.

1980’s – The idea for a Fair trade label was conceived. Products that were bought and traded in accordance with fair trade rules would have the logo upon their products to help them stand out in the shops.

1988 – The first fair trade label was launched branded "Max Havelaar," after a fictional 1988 – The first fair trade label was launched branded "Max Havelaar," after a fictional Dutch character who opposed the exploitation of coffee pickers in Dutch colonies.

1997 – Fairtrade labeling organisation is set up. It is responsible for setting interna-tional standards for the products, certifying production and auditing trade according to the standards and labeling the products.

2004 - WFTO Fair Trade Organization Mark was launched Parallel to the development of labeling for products; the World Fair Trade Organization (WFTO) developed a monitoring system for Fair Trade Organizations. In order to strengthen the credibility of these organizations towards political decision-makers, mainstream business and consumers.

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Page 6: ENTR315 Learning Pack

HISTORY (USA)

1946 – Fair trade began in the United States. Villages began buying needlework from Puerto Rico.

1940’s – A company named SERRV started trading with some of the poor communities in the south of the country in the late.

1958 – The first formal fair trade shop selling a number of items was opened.

THEORY: STATE FAILURE

(Dees 2007) argued that using the government as a social problem solver revealed the (Dees 2007) argued that using the government as a social problem solver revealed the limits they had in being able to solve these social issues. (Teasdale 2011; Defoiurny & Myssens 2006) believe that this helped explain the reason for the rise in social entre-preneurs coming up with social ventures that are able to fill the gaps that have been left by the government.

In the case of Fairtrade, producers of goods in third world countries and poorer parts of the world were unable to sell their goods at a reasonable price. Larger corporations were taking advantage of them and exploiting the farmers who didn’t have any power to argue against the prices they were being offered for their products. The rules of trade weren’t fair. This is where Fairtrade have come in, developing a set of rules, regulations and principles that have to be adhered by companies if they want to be la-beled a Fairtrade company and be able to use the Fairtrade logo. They are working with organisations in these countries to help the people maintain a good livelihood so with organisations in these countries to help the people maintain a good livelihood so they are able to provide for their family and community.

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KEY FACTS

The Fairtrade system currently works with 1.24 million people - farmers and workers - across more than 66 developing countries

In the UK, sales of Fairtrade products in 2011 reached £1.32 billion – a 12 per cent in-crease on the previous year

Fairtrade products are now sold in more than 120 countries

75 percent of all Fairtrade producers are smallholder farmers

78 percent of consumers recognise the FAIRTRADE Mark

Last year, farmers and workers from some of the world’s poorest countries invested €65 million in Fairtrade Premium in business, social and environmental projects in their communities

There are now 991 Fairtrade producer organisations worldwide

More than 6.5 million litres of Fairtrade wine was enjoyed in 2011

One in every three bananas sold in the UK is Fairtrade

Fairtrade accounts for 10 percent of all tea sold in the UK

Just over Just over 8 percent of all roast and ground retail coffee is Fairtrade certified

9,924 tonnes of Fairtrade hot chocolate was drunk in the UK in 2011 – that’s about 1.5 million of us sitting down to a cup of hot chocolate every day

Chichester Cathedral became the world’s first public building to display Fairtrade and Fairmined certified gold in 2011. A 3ft cockerel was gilded in Fairtrade certified gold and positioned atop the 270ft Cathedral spire

Fairtrade is a thriving and growing campaign movement with more than Fairtrade is a thriving and growing campaign movement with more than 550 Fair-trade Towns, almost 900 Fairtrade Schools and 170 Fairtrade Universities, and more than 7,000 Fairtrade Faith Groups.

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ISSUES & CHALLENGES

• Retailers charge extra on top of their premium• Only dealing with market failure in certain countries• Only partially solving the problem• Inequality• Monopolies• Minimum Pricing

ETHICAL OBJECTIONS TO FAIRTRADEETHICAL OBJECTIONS TO FAIRTRADE

Retailers and manufacturers can charge whatever they wish for the Fairtrade products they sell, the Fairtrade brand do not have any control on what the retailers charge. There is a minimum price that Fairtrade products are sold at, however, retailers are al-lowed to charge a premium.

‘It is almost never possible for a customer to determine how much extra is charge, be-cause retailers almost never sell identical Fairtrade and non-Fairtrade products side by side. There are differences in brand, quality, origin, etc.’ (Griffiths, 2012)

Therefore there is information failure, consumers are unaware that the amount that they are paying for Fairtrade products isn’t all necessarily going to back to the pro-ducer. This is one form of market failure (Ronchi, 2006) that arises from Fairtrade, an-other being a lack of competition for buyers of Fairtrade in the marketplace.

By trying to deal with the problems of market failure, Fairtrade indirectly creates market failure in other forms. Large corporations have a few Fairtrade products, how-ever are the main buyers of the product. As a result there is a lack of competition which results in companies being able to dictate terms with Fairtrade. There has been evidence in papers to suggest that companies are ‘sometimes paying the full Fairtrade price, but demanding a higher quality’. There therefore has to be stricter controls on how Fairtrade deals with companies who aren’t willing to abide to their contract or are holding them to ransom with their quality or pricing.holding them to ransom with their quality or pricing.

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ISSUES & CHALLENGES

ONLY DEALING WITH MARKET FAILURE IN CERTAIN COUNTRIES

Although Fairtrade tries to portray an image of fair trade for all, there is evidence to Although Fairtrade tries to portray an image of fair trade for all, there is evidence to suggest that they only help people in certain areas. For example, ‘in El Salvador the financial benefits of participating in Fair Trade were only enough for outstanding debt servicing.’ (Griffiths, 2012) There is evidence to also suggest that Mexico produce up to 25% of the Fairtrade coffee that is being sold on the market. Therefore, Fair Trade as a whole needs to also address areas that are worse off. This selective criteria does not ensure that there is fair trade for all, which is supposed to be the main aim of this social enterprise. An article from The Independent highlights that 50%, or even less, of the enterprise. An article from The Independent highlights that 50%, or even less, of the money that is generated by Fair Trade goes back in the social enterprise for social ob-jectives.

ONLY PARTIALLY SOLVING THE PROBLEM

Critics would argue that Fairtrade is unfairly distorting the market, introducing mini-mum prices creates supply for farmers who aren’t under the Fairtrade label, thus cre-ating oversupply of the product. Not only does Fair Trade create oversupply, it also creates an unfair label for those who aren’t operating under Fair Trade. Farmers in areas who are less off can go through traditional supply chains to try and get a fair price, however they may be unfairly discriminated because they aren’t using a Fair Trade label like other farmers would. Fair Trade arguably diverts attention away from the real issue, which is a market which is not guaranteeing maximum utility for the ma-jority, although it tries to help re-address market failure, there needs to be a larger effort from countries from around the world to ensure that there are better channels of distribution as well as an improvement in infrastructure which will enable this to happen.

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ISSUES & CHALLENGES

LITTLE FEMALE INVOLVEMENT

There is an apparent gender bias when it comes to Fair Trade, studies have shown that through There is an apparent gender bias when it comes to Fair Trade, studies have shown that through Fair Trade there has been little female involvement in the movement (Nicolls & Opal, 2005; Tal-lontire, 2000; Redfern and Snedker, 2002). The income generated by the Fair Trade coopera-tives is going to families which are male dominated, where the male is the one who is in control of the house, because of this lack of involvement in the movement as well as the male dominated households, there has been little female empowerment within the movement.

TARIFFS

They are much lower for non-processed supplies than for processed goods, so it may be non-profitable for producers to export, for example, roasted coffee instead of green coffee beans. This generates another disadvantage: producer countries are not encouraged to invest on pr-ocessing facilities, thus hampering their industrial development efforts

DISTORTS MARKET

The increase in the supply of Fair Trade products, for example coffee is from the channelling of existing production into the Fair Trade market, not by inducing producers in general to grow more coffee – the price of non-Fair Trade coffee may fall if this effect is significant. Fair Trade producers are only able to sell a small share of their produce in the Fair Trade market. For ex-ample, the share of coffee a certified small producer can sell through Fair Trade channels is often only 30 per cent; the rest has to be sold on the conventional market without any premium (Kohler, 2006).

"USE" OF A LABEL

A touchy issue, still unresolved. Large corporations may purchase a certain amount of Fair Trade certified cocoa, for example, take it to their factories and wear the label in the final product.

This kind of commerce was born to protect small-scale producers from abuses; if large compa-nies are allowed to boast one of these labels, consumers may get confused, thinking that those companies usually trade fairly, when actually it is just the opposite. On the other hand, if compa-nies like Nestlé, can purchase all the cocoa from Ghana on a Fair way, should we oppose to it?

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ALTERNATIVES

CORPORATE SOCIAL RESPONSIBILITYCSR is a concept whereby companies integrate social and environmental concerns in their business operations on a voluntary basis. (COM, 2001)

STARBUCKS

Companies such as Starbucks have been able to ensure that there is ethical sourcing of their products through Companies such as Starbucks have been able to ensure that there is ethical sourcing of their products through Corporate Social Responsibility. Conservation International has helped Starbucks to develop guidelines, ‘Coffee and Farmer Equity’ (C.A.F.E). There are four different types of standards that need to be met to ensure that the coffee is ethically sourced.

1. The coffee has to be of high quality.

2. There has to be ‘economic accountability’, where there needs to be evidence of the amount paid throughout the supply chain.

3. The environment in which the coffee is produced needs to be adequate, to ensure that they are in compliance 3. The environment in which the coffee is produced needs to be adequate, to ensure that they are in compliance with minimum wage requirements, as well as safeguards against child/forced labour.

4. There needs to be steps in place to ensure that the environment in which the coffee is produced ensures that waste is managed effectively, and that water is effectively used and of high quality.

COMPARISONS WITH FAIRTRADE

The way in which Starbucks have used their CSR to ethically source their products is different to the way in which The way in which Starbucks have used their CSR to ethically source their products is different to the way in which Fair Trade operates. Not only have Starbucks ensured that the farmers get a fair wage, they also ensure that the environment in which the coffee is produced for the workers is suitable, as well as the environment itself isn’t damaged through waste or low levels of quality in their water.

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ALTERNATIVES

GOVERNMENT INTERVENTIONGovernment intervention is: Regulatory actions taken by a government in order to affect or interfere with deci-sions made by individuals, groups, or organizations regarding social and economic matters.

(Business Dictionary, 2013)

Fair Trade is a movement which doesn’t involve any government intervention, however, instead of Fair Trade, government intervention can try to address the problem of farmers not getting a fair amount of money for the work that they do. The government can act in a number of ways to ensure that farmers are getting a fair price for the work that they do. For example:

1. The government could act as a buyer of the goods made, thus guaranteeing a buyer for the produce at a fair price.2. The government could have tighter regulations on large companies to ensure that they give a fairer price for 2. The government could have tighter regulations on large companies to ensure that they give a fairer price for farmers3. They could give subsidies to smaller companies who are able to provide a fair price for the farmers produce which acts as an incentive.

COMPARISON TO FAIRTRADE

Gov’t intervention ensures that all companies have to comply to regulations, rather than voluntarily like with FairGov’t intervention ensures that all companies have to comply to regulations, rather than voluntarily like with Fair-trade. If the government acts as a guaranteed buyer then the farmer will be guaranteed a fair price, consumers then know prices instead of retailers adding a premium which means that retailers can’t use Fairtrade as a mar-keting tool. Furthermore, offering subsidies to smaller companies results in smaller retailers being able to afford Fairtrade which increases competition for demand in Fairtrade products, therefore reducing the impact of retail-ers who want products which are of a higher quality for the same amount, or products of the same quality for lower prices.

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ALTERNATIVES

LABELLING INITIATIVESRAINFOREST ALLIANCE

Definition: - The Rainforest Alliance is a non-profit, tax-exempt organization based in New York. Its mission is to conserve biodiversity by promoting sustainability in agriculture, foresty, tourism and other businesses. The Rainforest Alliance certifies coffee, as well as other products and services, when it is produced under cer-tain standards.

The Rainforest goes about protecting the environment and the farmers. The rainforest alliance standards try to limit factors such as child labor. Children under the age of 15 aren’t allowed to be hired and other rules are in force such as minors not being allowed to life more than 20% of their body weight. Farmers must have non – discriminatory hiring practices and must pay legal minimum wage.

If a coffee farmer wants to earn certification, he can request an inspection whereby the farm will be inspected and upon approval may be granted a certificate. However improvements are often sought out before the offi-cial certification is given.

Rainforest Alliance allow companies who are using at least 30% Rainforest alliance certified content to put the seal on the packaging, which can have large impacts, especially for a large multi national company

COMPARISON TO FAIR TRADE

Fair trade are designed to empower farmers and tackle poverty. Rainforest Alliance is different in that it fo Fair trade are designed to empower farmers and tackle poverty. Rainforest Alliance is different in that it fo-cuses on sustainability in farms than reach a comprehensive standard of the sustainable agriculture culture (SAN). Farmers engaged in the Rainforest Alliance program learn to grow smart and become more efficient. The main difference is that the RFA focuses on the three pillars of sustainability rather than just biasing one as with Fairtrade (economic bias). The 3 pillars are: • Enviroment• Social• Economical

12

ALTERNATIVES

DIRECT TRADEDirect trade is a term used by coffee roasters who buy straight from the growers which means that the middle-man is effectively cut out of the supply chain, meaning for a more transparent supply chain. Direct trade has a strong model because they build mutually beneficial and respectful relationships with individual producers or cooperatives in the coffee-producing countries. This means roasters will have more control over aspects ranging from the quality of the coffee ;social issues and environmental concerns.

EXAMPLE: COUNTER COFFEE

Counter Coffee culture spend much of their time in contact with the farmer, that builds up trust and eventually a long term sustainable relationship. This has a number of positives• Working with the farmer enables chance for better quality• It encourages the farmer to adopt more ecological cultivation methods• Assess the farmers working conditions and help change if needed• Greater cultural experience

These are in essence the counter coffee trade modelThese are in essence the counter coffee trade model

ADVANTAGES:

• Fair and sustainable prices paid to growers• Exceptional quality and Grower Incentives• 100% transparent• No charge required to adopt

COMPARISON TO FAIR TRADE

Like Fair Trade, Counter Culture sets a minimum price it pays, but it also establishes a quality standard. Also, Like Fair Trade, Counter Culture sets a minimum price it pays, but it also establishes a quality standard. Also, unlike the Fair Trade certification, Counter Culture does not require growers to be part of a cooperative, a re-quirement that rankles some independent-minded, successful growers.

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Page 14: ENTR315 Learning Pack

Mohan, S. (2012) Fair Trade Without the Froth. The Institute of Economic Affairs

Nicholls. A & Opal.C (2005), Fair Trade: market driven ethical consumption, London, SAGE

Oxfam (2013) Fairtrade Coffee: Facilitators Guide. [online] Available at:

http://www.oxfam.ca/sites/default/files/Coffeekit2.pdf

[Accessed: 04/03/2013]

Redfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: ExperiRedfern, Andy and Paul Snedker. 2002. "Creating Market Opportunities for Small Enterprises: Experi-

ences of the Fair Trade Movement" Geneva: International Labour Office.

Ronchi, L. (2006) “Fairtrade” and Market Failures in Agricultural Commodity Markets. World Bank

Policy Research Working Paper 4011

Schmelzer, M. (2006) Is Fair Trade A Neoliberal Solution To Market Failures Or A Practical Challenge To

Neoliberal Trade And The Free Market Regime In General. UC Berkley

Tallontire, Anne. 2000. “Partnerships in fair trade: reflections from a case study of Cafe direct” Devel-

opment in Practice 10 (2).

Teasdale, S. (2011) ‘What’s in a Name? Making Sense of Social Enterprise Discourses’, Public Policy and

Administration, May 25, pp. 1-22.

REFERENCES

Business Dictionary (2013) Government Intervention. [online] Available at:

http://www.businessdictionary.com/definition/government-intervention.html#ixzz2NAfYawTM

[Accessed 06/03/2013]

Dees J (2007) Taking Social Entrepreneurship Seriously. Society 44(3): 24–31

Craxton, M. And Rathke, W. (2011), Un-Fairtrade Organization, ACORNS

COM (2001) Promoting a European framework for Corporate Social Responsibility. Green Paper 366

final. Brussels: Commission of the European Communities.

Defourny J and Nyssens M (2006) Defining Social Enterprise. in Nyssens M (ed) Social Enterprise: At the Defourny J and Nyssens M (2006) Defining Social Enterprise. in Nyssens M (ed) Social Enterprise: At the

Crossroads of Market, Public Policies and Civil Society. Abingdon: Routledge. P5

DiMaggio, P. & Powelle, W., 1983. The Iron Cage Revisited: Institutional Isomporphism and Collective

Rationality in Organisational Fields. American Sociology Review, 48(2), pp. 147-160.

Ethical Coffee (2013) Direct Trade Coffee. [online] Available at:

http://www.ethicalcoffee.net/direct.html

[Accessed 06/03/2013]

FAO, (2009), The Market for Organic and Fair-Trade Coffee, Food and Agriculture Organization of the FAO, (2009), The Market for Organic and Fair-Trade Coffee, Food and Agriculture Organization of the

United Nations

Griffiths.P. (2012), Ethical Objections to Fairtrade, Journal of Business Ethics, 2012, Vol.105(3), pp.357-

373

Jack, S. & Anderson, A., 2002. The Effects of Embeddedness on the Entrepreneurial Process. Journal of

Business Venturing, 17(5), pp. 467-487.

REFERENCES

1) Fairtrade International (FLO) / World Fair Trade Organisation (WFTO)

2) Creating Opportunities for Economically Disadvantaged Producers / Transparency and Accountability / Fair Trading Practices / Payment of a Fair Price / Ensuring no Child Labour and Forced Labour / Commitment to Non Discrimination / Ensuring Good Working Conditions / Providing Capacity Building / Promoting Fair Trade / Respect for the Environment

3) 3) 70

4) 7.5 million

5) Co-Operative

6) 2000

7) Garstang

8) 440

9) 4500

QUESTION ANSWERS

15

ALTERNATIVES

LABELLING INITIATIVESRAINFOREST ALLIANCE

Definition: - The Rainforest Alliance is a non-profit, tax-exempt organization based in New York. Its mission is to conserve biodiversity by promoting sustainability in agriculture, foresty, tourism and other businesses. The Rainforest Alliance certifies coffee, as well as other products and services, when it is produced under cer-tain standards.

The Rainforest goes about protecting the environment and the farmers. The rainforest alliance standards try to limit factors such as child labor. Children under the age of 15 aren’t allowed to be hired and other rules are in force such as minors not being allowed to life more than 20% of their body weight. Farmers must have non – discriminatory hiring practices and must pay legal minimum wage.

If a coffee farmer wants to earn certification, he can request an inspection whereby the farm will be inspected and upon approval may be granted a certificate. However improvements are often sought out before the offi-cial certification is given.

Rainforest Alliance allow companies who are using at least 30% Rainforest alliance certified content to put the seal on the packaging, which can have large impacts, especially for a large multi national company

COMPARISON TO FAIR TRADE

Fair trade are designed to empower farmers and tackle poverty. Rainforest Alliance is different in that it fo Fair trade are designed to empower farmers and tackle poverty. Rainforest Alliance is different in that it fo-cuses on sustainability in farms than reach a comprehensive standard of the sustainable agriculture culture (SAN). Farmers engaged in the Rainforest Alliance program learn to grow smart and become more efficient. The main difference is that the RFA focuses on the three pillars of sustainability rather than just biasing one as with Fairtrade (economic bias). The 3 pillars are: • Enviroment• Social• Economical

14

Page 15: ENTR315 Learning Pack

1) Fairtrade International (FLO) / World Fair Trade Organisation (WFTO)

2) Creating Opportunities for Economically Disadvantaged Producers / Transparency and Accountability / Fair Trading Practices / Payment of a Fair Price / Ensuring no Child Labour and Forced Labour / Commitment to Non Discrimination / Ensuring Good Working Conditions / Providing Capacity Building / Promoting Fair Trade / Respect for the Environment

3) 3) 70

4) 7.5 million

5) Co-Operative

6) 2000

7) Garstang

8) 440

9) 4500

QUESTION ANSWERS

16

ALTERNATIVES

INSTITUTIONAL ISOMORPHISMMIMETIC PRESSURES

This is where organisations model themselves on other organisations as a result of uncertainty. This can be This is where organisations model themselves on other organisations as a result of uncertainty. This can be seen in the CSR alternative that we have presented in the case of Starbucks. As an alternative to Fair Trade they are bringing in third party organisations to verify that they are abiding by their own principles for ethical sourcing. These are the Coffee and Farmer Equity (C.A.F.E.) Practices. These guidelines help the farmers grow their coffee in a way that’s better for them and the planet throughout their supply chain.

These Guidelines are:Product Quality (requirement, Economic Accountability (requirement), Social Responsibility (evaluated by Product Quality (requirement, Economic Accountability (requirement), Social Responsibility (evaluated by third-party verifiers and Environmental Leadership (evaluated by third-party verifiers).

NORMATIVE PRESSURES

This is the conditions and methods of work within a specified profession. This can be seen in a number of This is the conditions and methods of work within a specified profession. This can be seen in a number of companies setting up alternative labeling to Fair Trade. For example The Good African coffee company is an organisation that has been set up to encourage fair trade. They have looked at the Fair Trade labeling and de-cided that they feel they can do more to help the farmers in these countries. One step they have take to do this is including the majority of the process stage in Africa so that the communities can benefit from becoming in-volved in these processes which adds jobs to the society.

COERCIVE PRESSURES

These pressures stem from political influence and the problem of legitimacy. In the case of Fair Trade

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Page 16: ENTR315 Learning Pack

1) Fairtrade International (FLO) / World Fair Trade Organisation (WFTO)

2) Creating Opportunities for Economically Disadvantaged Producers / Transparency and Accountability / Fair Trading Practices / Payment of a Fair Price / Ensuring no Child Labour and Forced Labour / Commitment to Non Discrimination / Ensuring Good Working Conditions / Providing Capacity Building / Promoting Fair Trade / Respect for the Environment

3) 3) 70

4) 7.5 million

5) Co-Operative

6) 2000

7) Garstang

8) 440

9) 4500

QUESTION ANSWERS

16

Page 17: ENTR315 Learning Pack

Business Dictionary (2013) Government Intervention. [online] Available at:

http://www.businessdictionary.com/definition/government-intervention.html#ixzz2NAfYawTM

[Accessed 06/03/2013]

Dees J (2007) Taking Social Entrepreneurship Seriously. Society 44(3): 24–31

Craxton, M. And Rathke, W. (2011), Un-Fairtrade Organization, ACORNS

COM (2001) Promoting a European framework for Corporate Social Responsibility. Green Paper 366

final. Brussels: Commission of the European Communities.

Defourny J and Nyssens M (2006) Defining Social Enterprise. in Nyssens M (ed) Social Enterprise: At the Defourny J and Nyssens M (2006) Defining Social Enterprise. in Nyssens M (ed) Social Enterprise: At the

Crossroads of Market, Public Policies and Civil Society. Abingdon: Routledge. P5

DiMaggio, P. & Powelle, W., 1983. The Iron Cage Revisited: Institutional Isomporphism and Collective

Rationality in Organisational Fields. American Sociology Review, 48(2), pp. 147-160.

Ethical Coffee (2013) Direct Trade Coffee. [online] Available at:

http://www.ethicalcoffee.net/direct.html

[Accessed 06/03/2013]

FAO, (2009), The Market for Organic and Fair-Trade Coffee, Food and Agriculture Organization of the FAO, (2009), The Market for Organic and Fair-Trade Coffee, Food and Agriculture Organization of the

United Nations

Griffiths.P. (2012), Ethical Objections to Fairtrade, Journal of Business Ethics, 2012, Vol.105(3), pp.357-

373

Jack, S. & Anderson, A., 2002. The Effects of Embeddedness on the Entrepreneurial Process. Journal of

Business Venturing, 17(5), pp. 467-487.

REFERENCES

17

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Mohan, S. (2012) Fair Trade Without the Froth. The Institute of Economic Affairs

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