Question

How are coffee traders affected by the issues of Fair Trade

Answer 1

By increasing competition, the activities of
coffee cooperatives have generally increased the prices paid to both member and
nonmember farmers.
The export volume of fair trade coffee has also increased and has helped buffer fair
trade coffee farmers from international price fluctuations. However, fair trade sales are
still limited, and thus the benefits to farmers have been relatively small and diluted.
Although increased fair trade sales could provide more income to farmers, regional
economic gaps might also widen, dividing members of fair trade cooperatives from
those whose cooperatives have been unable to obtain certification. Such a situation may
lead to social discontent, particularly if international coffee prices fall. Moreover, fair
trade certification is not a guarantee of market success because cooperatives must then
compete in the global fair trade market as well as with private traders.