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The “Fair trade” Phenomenon, And Why India Needs A Strong Fair Trade Policy in Place

Posted on May 1, 2012 in Business and Economy

By Shruti Shreya:

How often do you buy a product that bears a special blue-green logo or think about the writing on your take-away coffee cups that says “Fair Traded” or even pay extra attention to placards in departmental stores that say “We only sell Fair Traded products here”?

It is the so-called “First World” countries’ crusades to help the producers of the “third-world” nations get the best price for their produce – that is called the Fair Trade policy. Be it handicrafts, coffee, cocoa, sugar, tea, bananas, honey, cotton, wine, fresh fruit, chocolate, flowers or gold, the organized social movement ensures a transparent and fair trade partnership to achieve a greater equity in international trade.

With a similar vision in mind, India too has the Fair Trade Forum neatly in place. The society that was started in September 2000 currently has a network of 70 Fair Trade promoting organizations in India. With the aim of empowering the producers from the weaker sections of the society, the organization mobilizes 100 students at 75 colleges in four major cities to be Fair Trade supporters and consumers among other activities.

To promote their cause various events are also being rolled out. While Sanyojan, carried out at Siri Fort, New Delhi in March this year was held to enlighten the youth of the country on the Fair Trade issues, “Creative Cut” was a documentary film screened to promote the initiative of Fair Trade.

While measures are being taken to increase knowledge about Fair Trade in India, there still lacks efforts from the government to reduce the hardships of the producer families and ensure they get the best price for their produce or so much as protect their lands. There are no official government policies in place that may help guide a proper development of the Fair Trade phenomenon in the country. The biggest paradox being that despite all the promotion being carried out for issues, the aware consumer seeking fairly traded product is not able to find it in the market. There clearly are some missing links in the Fair Trade supply chain in India.

The UK Fair Trade Chief, John Fingleton, however feels that India may be on the right track with certain new government policies that include competition. He feels that competition-enhancing policies are beneficial for fair trading, especially since it is a magic formula that works in all economic conditions.

Meanwhile, although it is too early yet to say whether or not such moves will help the producers in India, the phenomenon of Fair Trading worldwide is being criticized by economists and the likes for being yet another means to mint money by blindfolding consumers into believing that the amount being raised from fair trades are going towards the betterment of the producers of the developing nations. With no official control or guidelines to be followed, the retailers unfortunately are charging insane prices for products that bear the Fair Trade logo. The extra amount earned however is not always reaching the actual producers and their families, which just makes it even worse than the actual exploitation of manual labor. It is time a globally centralized organization be erected to regulate the Fair Trade prices before retail companies end up making much more than the MRP on the very same products.