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Is fairtrade beneficial to producers and farmers in developing countries

However, fair Trade USA which was formerly under Fairtrade international label left the label and begun implementing a different labeled scheme and included all crops and estates as well as individual smallholder farmersThis paper focuses on the analysis of Fairtrade and holds the view that Fairtrade is not beneficial to farmers and producers in the developing countries. As will be evident in this paper, while Fairtrade report a substantial increment in year to year trade, these increments in profits do not cascade down to farmers and producers because of several factors related to inefficiency in marketing and distribution of products in the developing countries. As stated by Griffiths (2012 p.369), the sales of Fairtrade international certified products totaled to approximately 98 billion United states dollars which represent 22 percent increment compared to the previous year. However, Fairtrade does not give a breakdown of how much of these sales reach the producers in developing countries. Moreover Fairtrade does not reveal how much of these figures are from the extra prices charged for Fairtrade goods.Inefficient marketing system is one of the major factors that have resulted into lack of benefits to farers and producers. Fairtrade emphasizes on selling through monopolist cooperatives which are most of the times corrupt and inefficient (Griffiths, 2012 p. 370). It is also important to note that some private traders are more efficient than the cooperatives. In this regard it is also very difficult for the members of a cooperative to switch even if the cooperative is being mismanaged or when a cooperative is being bankrupt especially when they want to attain fair trade status. Fairtrade is also inefficient since it goes against the free market ideal of certain economies. Griffiths (2012 p. 268), refers to Fairtrade as a misguided attempt to make up for the market failures. This is because deviation from free market result into

Is fairtrade beneficial to producers and farmers in developing countries