Fairtrade

This report comprises of an in depth discussion about fair-trade coffee and addresses the more important issues of the unsatisfactory conditions of coffee growers, and the excess supply of coffee that has hit the industry.

According to a World Bank report, in Central America alone, some 600,000 coffee workers have been left unemployed in the past two years. The plantations are being shut down as prices have plummeted to their lowest levels in a century. In Nicaragua, thousands of coffee farm workers are without food, land or hope. Now in a situation as this what can one do to overcome the coffee crisis?

We will progress further by taking a look at what big corporations like Nestle or P&G are doing and can do for the betterment of the livelihoods of coffee farmers. Moreover, of how an ethical supply chain or ethical buying behavior can impact and boost the sale of fair-trade coffee.

Lastly, we conclude through enumerating and justifying ways to improve the fair-trade crisis through direct relationships with suppliers, increasing demand through awareness building and taking steps to reduce supply.

2. LIST OF ILLUSTRATIONS

Figure 1.A Indifference curves and budget constraints…………………………………..11

Figure 1.B Price effect……………………………………………………………………12

Figure 1.C Price change and demand………………………………………………….....13

Figure 2.A Influence on consumer purchasing behaviour………………………………..14

Figure 3.A Illustration of price difference through supply chain………………………...17

II.MAIN BODY

1. INTRODUCTION

The Case study Fair Trade Coffee revolves around the global coffee industry. It begins with an introduction of the two situations that have wracked it: Over supply and the accompanying low prices that follow. It then goes on to speak of the actions taken by different profit and not-for-profit organizations in the form of the start up of a Fair Trade movement. These efforts are due because whilst excess supply’s reduction in price is an advantage to customers worldwide, it is detrimental to the livelihoods of the millions of coffee farmers in developing and under developed countries that comprise the major growers of coffee in the world.

Oversupply has forced the sale of coffee at low prices despite the costs of producing and processing coffee beans being much higher. Firms like Kraft and Starbucks have taken to purchasing certified coffee and integrating them into their mass marketed