GCSE Geography | Reducing the Development Gap: Fair Trade (Development Gap 12)

There are a number of strategies that can be used to reduce the development gap. One such strategy is Fair trade...

Traditionally producers in LICs have received very little income for the crops that they grow, with those who process, transport and sell the goods receiving a much larger share of the profits. Cash crop farmers have very little control over the price they receive for fruit and vegetable that they grow, particularly as supermarkets in HICs want to pay the lowest price they can in order to maximise their own profits, so as a result LIC farmers receive a low wage and struggle to support their families.

The Fairtrade label was set up in 1992 to stop this and make farming much more fair for those in LICs. Farmers receive a payment that is agreed and stable - they have a guaranteed income so they can plan for their futures better.

Products sold with the Fairtrade logo on them show a commitment to better prices, working conditions and terms of trade for farmers and workers, and in return, farmers agree to farm using sustainable techniques, for example, not using chemical fertilisers and pesticides.

Fairtrade products include bananas, cocoa, coffee, flowers, sugar, tea, rice, nuts, wine and cotton.

Bananas are essential staple crop and a vital export for many LICs - the industry is valued at around $7 billion. Bananas are grown all over the globe, however 90% of all Fairtrade bananas come from Latin America and the Caribbean. Today there are 258 banana cooperatives or commercial farms which are certified Fairtrade, with over 36,480 farmers and workers in 16 countries.

In the UK one-third of bananas are Fairtrade (mainly from the Caribbean) - in the last 20 years UK Fairtrade banana sales generated over £114 million in Fairtrade Premium for farmers and workers.

This Fairtrade Premium is to be spent on community projects. This money can be used to buy machinery which will increase yields and could be used to process raw materials. Higher prices can be charged for processed goods, so farmers increase their income. If farmers have more income, they can afford to buy food and medicine for their families, improving their health, which results in healthy families living without the burden of poverty, and therefore having a higher quality of life. They may also have enough money to send their children to school, or buy luxury items.

The Fairtrade Premium can also be used to fund things such as clinics to improve access to healthcare for farmers and their families; schools to improve access to education to improve the chances of children to earn more in the future; and small-scale water projects such as hand pumps to give villages a clean water supply, and drip-irrigation systems to improve crop yields. The money can also be used to fund transport to those in rural areas, such as providing a regular bus service or access to bicycles to so people spend less time getting to work.

An example of a company working with farmers in LICs to improve their quality of life is Ben and Jerry's. Their ice cream is made using vanilla from Fairtrade farmers in Madagascar and Uganda. More than $278,000 was raised in Fairtrade premiums in 2018 and was used to improve a health centre, repair a school and build an office.

Some criticisms have been made of Fairtrade. Only richer consumers can afford the extra cost of Fairtrade products and some organisations have created their own form of Fairtrade labelling which doesn’t guarantee the same benefits as the official Fairtrade scheme.