Chapter 12 Market-Based Approach

What was the original goal of Fairtrade?

remedy unfair economic conditions faced by small-scale farmers

Low prices for primary commodities at the wholesale level but major spikes when manufactured and exported

Dependency theory

Which theory majorly contributed to the underdevelopment of Third World countries?

Dependency theory

Perpetuates the extraction of cheap raw materials and labor from Southern countries to feed the demands of corporations and consumers in developed countries.

Neocolonial relationship

Fair Trade was created because small-farmers who produce commodities received only 25-50% of the world ______ because of _____. __________, ______, _______, etc. which leaves them no other choice but to try to sell locally at prices to create a liveable wage

price, buyers, processors, brokers, exporters

One of the certifications for Fair Trade is that buyers must pay a ______________ for a commodity to serve as a safety net for farmers from __________ in the market.

minimum price, fluctuations

In Fair Trade, an additional social premium is added to fund the social development projects for producers (i.e. Green coffee is $1.40 per pound with an additional 20 cents per pound for social premium) importantly, this price is paid to ___________ not farmers directly so they still only recieve a _______ of the price.

producers, portion

The portion of social _________ cuts that farmers do get is split between the ________ and ____________ for the benefit of ________ in plantation production businesses since these industries are often especially exploitative.

premium, workers, management, workers

Fair Trade is marketed as a way for people to engage in _______________

Ethical consumerism

Fair Trade households in Michiza received __________ more gross income for their coffee than non-member neighbors due to higher fair trade prices since fair trade prices translate into a significant _____________ compared to conventional prices.

4x, income multiplier

The income of indigenous coffee producers in Mexico _____ by 86% following the coffee price crash in the early 1900s, forcing many to sell their plots.

fell

Compared to conventional households, Fair Trade Michiza member families were less ________ and were less likely to carry debt from year to year due to Fair Trade being ______ and more ______ prices that allow farmers to pay off their _____.

indebted, higher, stable, debt

Fair-Trade buyers often also require _________ which encourages more positive environmental practices among producers.

organic certification

In Fair Trade households, women played a more significant role in both _______________ and __________ compared to conventional households.

production, income use

A key controversy with Fair Trade is that large corporations will only purchase a __________ of Fair Trade products to say they bought them

small amount

Corporations that sell minimal quantities of Fair Trade-certified goods use the halo effect of Fair Trade in their advertising and public relations to persuade consumers that they are socially responsible

Fairwashing

A controversy of the Fair Trade-certification is that there are multiple Fair Trade labels that require consumers to do their __________ and _______ a lot of different factors when deciding which Fair Trade options to support

research, balance

As neoliberalism persists, the __________ of agribusiness-dominated agriculture will make Fair Trade a ______ that will proceed to make it out of reach for a majority

low prices, luxury

Sustainability is about insuring __________ and ________ without depleting or diminishing the capacity of the earth’s ecosystems to support ____, or at the expense of _______ well-being

human rights, well-being, life, others’

What are the 3 dimensions of sustainability?

1. Environmental

2. Social

3. Economic

Why is sustainability a contested notion?

There is controversy over how to balance environmental, social, and economic dimensions of sustainability

What is the environmental dimension of sustainability?

The maintenance of ecological systems over time

What is the social dimension of sustainability?

The maintenance of social systems over time

What is the economic dimension of sustainability?

Whether an economic sector is able to ensure sufficient economic productivity and development

What are the 3 approaches to sustainable agriculture?

1. Technological fix and intensification initiatives

2. Market-based initiatives

3. Community-based initiatives

Shifting from government to governance

Market-based approach

Shift of control and regulatory power from the government to private stakeholders due to neoliberalism

Market-based approach

The greater the amount of sustainable products sold, the greater the sustainable impact will be

Alternative market-based approaches

Using the power of big brands across economies and cultures

Mainstream market-based approaches

In India, wages and labor conditions for plantation workers are regulated by the Plantations Labour Act of 1951 which already provides benefits like health insurance and fair wages meaning that Fair Trade certification added _______ that workers didn’t already have legal entitlement to.

little

Since government regulation already covered similar protections, fair trade certification gave Indian tea workers ____________ or ____________ beyond what they already received.

no new protections, income increases

Rather than lifting producers out of poverty, Fair Trade more reliably provides _____________ for small-scale producers by moderating _____ and _____________.

greater economic stability, risk, smoothing income

Among the genuine benefits Fair Trade can offer are better market transparency, reduced pesticide exposure, and increased _________________ within producer communities

participation and social status for women

The benefits of Fair Trade are easier to identify for ____________ than for waged plantation workers.

independent smallholders

Taking over the idea of sustainability and turning it into a tool of business control and growth that projects an image of corporate social responsibility

Eco-business

Ecobusiness is thought to b pushing for the sustainability of people and the planet but in reality it is aiming for sustainability of ______________

big business

Why are eco businesses able to adopt sustainable practices while also cutting consumer costs?

Exploiting small suppliers and creating low-paid labor upstream

Triple bottom-line balance of environmental, social, and economic factors that companies cast their efforts in a win-win light

Corporate social responsibility (CSR)

Energy, water, material use, and waste output seem to be _________ but mostly only by ________

decreasing, fractions

Ecobusiness helps retailers and manufacturers to enhance their resilience and their flexibility by better tracking _________________

flow of inputs and products

Ecobusiness is helping big brands work more directly with ________ to improve the quality and security of supply.

suppliers

Multinational grocery firms and food manufacturers are providing _____, _________, and _____________ to farmers all over the world in order to help them improve energy and water efficiency, reduce toxic chemicals, and cut down on waste.

advice, funding, technical assistance

The shortcoming of corporations like Tesco, Safeway, Costco, and The Home Depot bypassing middlemen is that they are __________ suppliers to secrecy when multiple ___________ from the same industry buy from them and one up each other in price with their own branded label.

swearing, competitors

Ecobusiness involves some governance power through formal codes, policies, and legal contracts but most is ______, sometimes maintained through __________ threats and non-coercive ________ opportunities

coercive, financial

The growth of ecobusiness is further concentrating the power and enhancing the _____________

shift to governance

Many see partnering with __________ as one of the few ways to improve business accountability, transparency, and management since ___________ lack control or power to regulate global environmental problems due to being outcompeted

big brands, governments

The limitation of ecobusiness is that even if big brands ______ the resources used to make a single product, the growth in the _________ of products they are producing will not led to any net environmental gains

reduce, number

The path to corporate sustainability requires __________ to participate and lead or even brand the process

big brands

Governments are now doing more _________ than implementing and civil society groups do not have the power to produce transformational global change.

posturing