Assignment 4 - First Summary

Raynolds, L.T, Murray, D., (2007). Fair Trade, The Challenges of Transforming Globalization. USA: Routledge

Contemporary Challenges and future prospects

The chapter discusses the challenges facing Fair Trade in its efforts to transform globalisation and to develop economic and environmental sustainability in the Third World, through different trade practices in the market. It also views its increasing growth as an organisation, focusing on the clear tensions created working in and against the market.

As FairTrade has rapidly developed and grown over recent years, the author states that this has given rise to a number of challenges, which could become a future threat unless changes are made. It is mentioned that there are obvious contradictions within the trade practise of Fair Trade and market priorities. Fair trade seeks for improved changes in trade practises and pushes for a more equal trade between northern consumers and southern producers, whilst still promoting ethical values. It is looked at from different perspectives and the author explains why there is a divide in the movement. Some people see Fair Trade as a development which is trying to promote fairer trade practices and values within the market, based on factors like sustainability. Others see it as more of a commercial venture, in which Fair Trade and the market values and practices are still mainly dominant.

The author questions whether the growth of Fair Trade is a sign of achievement. Or, has Fair Trade’s principles and practices been over looked due to commercial success?

The author highlights some central challenges facing Fair Trade now. There has been a huge shift from supporting small alternative organisations to encompassing a large number of committed consumers, so many more certified products have been made available for sale in markets. Some people see this as a success in reshaping market relations but others see it only as attempts to profit from Fair Trade products. FLO has increased certified sales to maximise the amount of workers and producers benefiting from being part of Fair Trade, but the market is demanding they have more reliable supplies to offer. The author explains that FLO are more interested in where Fair Trade stands within the market rather than the concerns of north/south inequalities. The smaller alternative organisations are concerned about getting less notice than larger distributors who actually certify less Fair Trade products than themselves. If present trade practices continue then the success of equality in trade could be questioned.

The number of Fair Trade workers has increased as Fair Trade merges production units to manage quantity and quality requirements. Some think this shows Fair Trade’s ability to support small scale farmers but others think it just highlights North/South inequalities. The trends in the market now are pushing out the smaller scale producers as bigger distributors have increasing quality production and therefore the author questions whether small producers are benefiting. Certain quality requirements such as shifting to organic production could possibly create difficulties for disadvantaged producers, questioning Fair Trade’s strategies for small scale producers. Diversity of production is also being demanded by the market, again disadvantaging small scale farmers. The demands of northern markets are affecting the activities of Fair Trade workers.

It is the author’s opinion that the central challenge to Fair Trade is the dominance of retailers and branders who are more interested in market values rather than the organisation’s aims and that the practices and strategies adopted by the movement should remain focused on the small scale producers.