Saturday, October 24, 2009

Fair trade? Yet a bag of cocoa earns the African farmer far less than the price of a chocolate bar! That fair?


Answers:
Yes, because a lot of things need to happen to that bag of cocoa before it becomes a chocolate bar, and everybody in the process also needs to get paid.
yes it is fair. did the farmer refine the chocolate? did he package it? did he send it out to sellers? no. it's not like they take the bag of cocoa and then turn around and put that bag on the shelf at stores. that actually have to turn it into chocolate, and that takes more money that the bag of cocoa is worth. that's why they charge US more than the original bag of cocoa is worth.
And to follow up on beardog's excellent answer, yes, because otherwise the African farmer would not be able to sell his cocoa at all.
Life isn't perfect. But you need to think things through rather than go searching for villains and arriving at the nearest clean-cut, fairly affluent person.
Scarcity is nobody's "fault" - it's reality. How we deal with it to efficiently produce that which the aggregate of consumers demand is the question, and the best answer to date is commercial freedom, otherwise known as "capitalism" - unless some of us think we should be producing what the people SHOULD want rather than what they do. Then the best answer is centralization all the way.
If a chocolate bar were to come about naturally, then no, that would not be fair. But the cocoa has to be shipped to the plant where workers have to use their magic powers to turn it into a Snickers. Then there's advertising and packaging, not to mention taxes.
'Fair' trade isn't fair, it's just a nice-sounding label for an alternate to Free Trade. It could be characterized as voluntary price-fixing. In large part, it's a marketing tool. You pay your foreign producers slightly above the going market rate, so you can attract price-insensitive consumers willing to pay a guilt premium. Much like the Catholic Church selling indulgences in the middle ages.
get your brain key, stick it in your ear and wind up your brain.
Yes! The average African person makes about a dollar a day and that's a good wage in Africa. The higher paid ones make as much as $2 and $3 a day. They live for trade for the most part. My oldest friend flew hot air balloon in Kenya and hired the locals to put up and take down the balloon. They got free food and paid $1 a day and they were very happy of course my friend got paid about $2000 a week.
It's a totally different economy there and you can't compare it with any other country.
Well, since Mr. African farmer is not paying for transporting that cocoa to distant processing plants, nor is he paying the costs of the labor and overhead to process it into cocoa powder and cocoa butter, nor is he paying to store it in any form, nor is he paying for sugar, milk, or other ingredients, or the foil and or paper used to wrap it, nor the machines used to grind, mix, heat, form, cut, or wrap them, nor is he paying the wages of those who work in the factory, keep the machines running, etc, nor the truck drivers who transport the finished chocolate product, nor for the storage in a depot for that product, nor for the distribution to sales locations, nor for the people in the stores who receive the product, stock the product on the shelves or the cashiers who ring it up.
You're talking about a process where, literally, there are hundreds, if not thousands, of people involved, and each of them gets paid out of the 70 cents paid for it.
Not only is it "fair", it is the miracle of modern free trade. Look how many lives have been enriched by the process. Look at how many people can thus buy homes, food, clothing and entertainment, all from that one simple process. This is the miracle of free trade, and you think it's not a good process?

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