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| Fairtrade Coffee; and why it hurts the poor | |
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| Tweet Topic Started: Feb 4 2007, 03:29 AM (576 Views) | |
| Tubs2 | Feb 7 2007, 10:14 PM Post #26 |
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Paul Tait
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There is a brand of Nestle coffee that is Fair Trade. It's called Nestcafe Partners Blend. Though Nestle and Fair Trade aren't really good bed fellows. Gazza |
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| garrybaldy | Feb 7 2007, 10:21 PM Post #27 |
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foley okenla, richie moran
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Now even i know Nestle is BAD :copno: |
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| The_Bear | Feb 9 2007, 03:20 PM Post #28 |
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Gil Merrick
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This is the response I have been set by Oxfam
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| Aussiebrum | Feb 12 2007, 03:02 AM Post #29 |
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Mikael Forssell
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We all want to end poverty, illness and suffering, we all want to help the poor. In doubt is the best way to go about it. Excessive politicization of groups like Oxfam, the bloated bureaucracy, the political posturing, the fees imposed on individuals or companies wanting to promote “Fair Trade Coffee” and the cruel blending of different farmers coffee ….. The official doesn’t even try to explain or justify their position. And Bear, please send him/her another email and ask them why Oxfam PAY the collectors who most of us wrongly assumed were volunteers. |
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| The_Bear | Feb 12 2007, 11:26 AM Post #30 |
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Gil Merrick
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Just to let you know Aussie, most charities pay collectors, they also pay lots of other people to sign people up to direct debit etc. There are very few people who will do anything for nothing. |
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| Tubs2 | Feb 12 2007, 01:07 PM Post #31 |
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Paul Tait
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Why do they pay people to collect money? To raise even more money. Simple really. I thought you was a business man? Are you really so blind? To end Poverty we need to legislate against the current crime of trade injustice. We need to end the government subsidies that protect their own markets. Of course Oxfam engage governments. Oxfam aren't trying to build a political empire, they are trying to end inhumane policy. If they don't approach Politicians, they don't get this done. Is this really political posturing? Or is it staying true to their aim of ending world poverty? Simple really. I have shown where to find the accounts as submitted to the government. Hardly smacks of "bloated bureaucracy". As I've said, if you have real information (rather than just this idle gossip) this is false I'm sure the authorities would love to hear from you. Until then, how about you give up on this one. I note you change your position on producers being charged for Fair Trade Status to companies or individuals being charged. Perhaps the entire argument you built is just as flaky as this and your "facts" on Oxfam accounting were proved to be? Just like to say that I've been promoting Fair Trade for the past 8 years and haven't been charged a penny. And yes, if companies want to display the FT logo then they must be audited and this costs. How else is the consumer to know if the FT logo is worth the ink in printing it? This is no different to many other schemes such as the Soil Association which audits the products of organic producers who want to assure their customers of their integrity. The money raised goes back into working for FT. It's all good in the end. Of course, being a fan of the open market you will approve of such openess, empowering the consumer with knowledge and choice. No? You model the real "Open Market". You claim you want openness but as the oppressed fight for openess and fairness an argument is built under a thin guise of fairness but obviously smacks of protectionsim, oppression and injustice. It is formed on misinformation and half facts engineered to represent the poor. It only represents the shareholders. And this is an interesting point. The argument you raise has a confict of interest. It suggests that market forces will be the answer to 3rd world poverty (despite contradictory evidence of the last 30 years). The argument is designed in the favour of shareholders. Just let them get on with it and all will be right, eh? On the other hand, the NGO's (Oxfam are not alone here) in favour of protecting the rights of all workers, not just those in the west have no other interest. You see, that's it. They just want to end suffering. Conflict of interest Vs No conflict of interest. Hmm . . . Back to the logo and auditing. Companies that operate ethicly don't have to buy into the FT logo. There are companies such as Clipper who trade ethicly but do not display the FT logo on every product in their range. Doesn't make the product any less ethical and costs nobody. Of course the consumer has to do their research to ensure they really are buying ethicly, and this is how the FT logo helps. It helps the brand, it helps the consumer and at no cost, it helps the supplier. Aussie, open your eyes. You seem to add 2 and 2 and get whatever figure you wanted to get in the first place. Gazza |
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| Aussiebrum | Feb 13 2007, 02:40 AM Post #32 |
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Mikael Forssell
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To round off, an interesting article from the (quite) left leaning Sydney Morning Herals written by Ross Gittens last year. AT CERTAIN shops in London, a cup of "fair trade" coffee costs 25 cents more than an ordinary cup. But investigations reveal that, though the Guatemalan farmers supplying the coffee are paid almost double the market price, the quantity of beans used in a cup of coffee is so small that this extra cost works out at only 2.5 cents a cup. So 90 per cent of the higher price of fair trade coffee ends up in someone else's pocket. It's a similar story for organic fruit and veg. The higher price you pay is a lot more than can be justified by the higher cost of production and higher rate of spoilage. Then there's the wide range of prices you can pay for a cup of coffee in Starbucks and other fancy coffee shops, depending on the style of coffee and size of the cup. There's no way the difference in price is adequately explained by the differing costs of producing the various styles or sizes. These cases are from an interesting new book, The Undercover Economist, by Tim Harford. But there are many more. For instance, I'll bet the higher price of free-range eggs isn't justified by their higher cost of production, just as the extra leg room and better meals don't account for the much higher price of business class air fares. The cost of cardboard doesn't go near explaining the higher price of hardback books compared to paperback editions. So how are these apparent rip-offs explained? By a common phenomenon of capitalism economists call price discrimination. I suspect that, the better off we become financially, the more often we're suckered by it. A funny thing about capitalism is that people can spend a lifetime living in a market economy without acquiring much of a feel for the workings of supply and demand. Years of propaganda from business interests have left many people with the impression that prices are set by establishing the cost of producing an item, then adding a fixed percentage profit margin. (Business lobbies inculcate this thinking whenever, in their fight to stave off a new impost some government is proposing, they claim that they'll simply "pass it on to the customer".) In a free market, price is determined by the combination of the cost of supply with the strength of demand. The bit people underestimate is the role of demand. Its strength relative to supply often determines the size of the profit margin. The beginning of wisdom is to understand that profit-oriented businesses want to charge "as much as the market will bear". The next point, however, is to understand there are limits to what the market will bear. The trick is that each of us has our own maximum price we're willing to pay for a particular item. So the ideal way for a business to maximise its profit would be to charge each of its customers a price geared to his or her maximum willingness to pay. The reason firms rarely do that is not the administrative hassle involved so much as the fact that they don't know how much we're willing to pay. Harford says the big internet bookseller Amazon used to vary the prices it charged particular customers according to their record of purchases, but it drew too many complaints and had to abandon the practice. What's a lot easier and more common is for firms to set differing prices for different groups of customers. In the simplest version of this, they set a low price aimed at people with a low willingness to pay and a high price aimed at those with a high willingness to pay. The trouble is, they can't just advertise two prices for the same item: $1 for cheapskates, $2.95 for spendthrifts. So they have to find a plausible excuse for charging two or more prices. With some things, it's easy. You charge children, students and pensioners a lower price. You do so not out of consideration for their lesser means, but because their lesser means affects their ability to pay. Were you to charge a uniform price, many of these people wouldn't buy. And provided the lower price you charge more than covers the extra cost involved in making the extra sale (the "variable" cost, as accountants call it) and the seat they occupy doesn't exclude someone who'd pay full freight, missing such sales reduces your potential profit. A related trick is charging lower prices for less-well-placed seats in a theatre (your real motive is just to offer a range of prices to suit all budgets), or having bargain days at the movies when you slash the price to attract the budget-conscious on early weekdays when most people don't want to go to the movies. When you pay a high price for a bigger, fancier coffee in Starbucks, all you're really saying is: "I don't mind paying a bit extra." That's true of people motivated to buy fair trade coffee, organic vegies or free-range eggs. For some, they're paying extra to prove they're a caring person. In other cases, people are willing to pay extra to demonstrate their wealth or social status. With hardcover books, you pay an impatience premium - because you can't wait to read a book everyone's talking about, or read the latest from a favourite author. To make higher profits out of charging two different prices, however, you have to be able to keep the markets separate, to stop the high-payers buying the cheaper product - perhaps with the help of some enterprising soul who buys in the cheap market and resells to them in the dear market. Harford says the no-frills products in supermarkets have unattractive labels not to save on printing costs but to discourage purchases by people prepared to pay more for the big-name products. He notes that organic oranges are rarely stocked beside ordinary oranges so it's harder to see how much extra you're paying. Many multinational companies charge higher prices in some countries than others, but the internet is making this harder - as witness, all those spam emails advertising cut-price Canadian pharmaceuticals to overcharged Americans. The strange thing is that, in practice, price discrimination works to narrow the true gap between rich and poor. The better-off are so easily persuaded to pay extra for essentially the same stuff. |
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| proccy_blues | Feb 13 2007, 07:01 AM Post #33 |
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Joe Bradford
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really, you two should get a virtual room.... :rolleyes: |
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| Tubs2 | Feb 13 2007, 08:34 AM Post #34 |
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Paul Tait
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There is some truth there. Some people are paying too much for Fair Trade goods. There's no need. Reputable vendors do not increase and in the case of some products, actually reduce the prices of fairly traded goods.* If only all suppliers were so honest eh? But then, that's capitilism for you >;o) Still, I'd rather be ripped off by western companies if I was assured they weren't stealing from the developing world. It'll cost me less than a penny per cup of coffee (bought from a supermarket) and will help provide a sustainable supply free from exploitation. Less than a penny per cup of coffee. That's a bargain. Obviously the claims regarding market forces in the above are a tad naïve. While it talks of end product demand, it glosses over the market supply. In an open market a producer would have competing customers seeking their produce. However, if the customers operate as a cartel creating an effective monopoly for the end product, the producer is left in limbo. They have the option of selling at the price dictated by the buyer or letting their produce rot. This is the situation that coffee farmers find themselves in now. Their produce is in demand, but they have no open market in which to sell their goods. They are forced to sell at a loss. They are forced to put their children to work as they can't afford to send them to school. They are forced to forego safety measures in the production of their crop. They are forced to forego food. They are forced to, ah you get the picture. The same is true of the dairy industry in this country. The supermarkets have forced down prices below which it is possible to produce milk. This forces dairy farmers to seek subsidies from government to keep operating. These subsidies are effectively keeping supermarket profits artificially high. Not a true open market. The answer is to allow Dairy farmers (or coffee producers) to name the price of their goods. Trade fairly and give them a true open market, not one protected by those who have the money. We still want coffee and milk. Let's end the trade injustice that favours the shareholder to get it. Gazza * For instance, premium own brand fair trade coffee at Co-op is cheaper than their main stream expoiltative counterparts. Costa no longer charge a premium on their fair trade options. If only Starbucks followed suit. |
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| Aussiebrum | Feb 13 2007, 08:50 PM Post #35 |
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Mikael Forssell
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At least we agree the government should keep its grubby grubby paws totally out of industry and commerce. You are so right that their invovement distorts the market operation with the losers being us taxpayers. |
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| Tubs2 | Feb 14 2007, 12:09 PM Post #36 |
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Paul Tait
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We don't quite agree here, but it's as near as were going to get >;o) The government shouldn't subsidise the farmers. They should investigate the highly unethical, monopolistic trading practice of the supermarkets. They pay a farmer a sustainable price and there is no need for the subsidy. Job done! Even Adam Smith advocated regulation to protect against exploitation. Gazza |
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| davekermito | Feb 14 2007, 12:12 PM Post #37 |
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Paul Tait
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Wow, I agree with something you've said Tubs! :D |
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| Tubs2 | Feb 14 2007, 12:18 PM Post #38 |
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Paul Tait
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I wouldn't admit to that on an open forum. People might think you're a wierdo. >;o) Gazza |
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| proccy_blues | Feb 14 2007, 12:29 PM Post #39 |
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Joe Bradford
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:D oops.........anybody else see an open stable door that needed bolting? |
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| davekermito | Feb 14 2007, 12:31 PM Post #40 |
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Paul Tait
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:LOL: And having >13000 posts on a messageboard makes you sane? |
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| proccy_blues | Feb 14 2007, 12:34 PM Post #41 |
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Joe Bradford
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:rolleyes: touchy nerve time mate...? |
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| davekermito | Feb 14 2007, 12:35 PM Post #42 |
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Paul Tait
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Not really pal, hence this little chap > :LOL: |
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| proccy_blues | Feb 14 2007, 12:37 PM Post #43 |
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Joe Bradford
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**thumbup good, i love all this pish taking - and getting paid for it.... :wub: |
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| davekermito | Feb 14 2007, 12:39 PM Post #44 |
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Paul Tait
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Haven't had a good hijack for a while anyway! |
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| proccy_blues | Feb 14 2007, 12:41 PM Post #45 |
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Joe Bradford
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is that what you call it...? it's all got a bit dull and serious recently, glad you and doc came back into form... :rolleyes: |
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