Answer to Question #207101 in Management for Pearl

Question

B. Fair trade

  1. Discuss the early example of fair trade linked to the Salvation Army. Why and how was it started?

What were their objectives and do they still follow the same objectives? How did their products change over time?

Answer 1

The concept of Fairtrade was coined by the members of the Salvation Army in New Zealand, Tonga, and Fiji in 2006. The members observed the imbalances of power in international trade. Particularly upsetting was how suppliers from developing countries were heavily exploited by developed countries. The idea was to endorse products labelled and certified by an organization named Fairtrade. The organization allegedly takes into account worker's and suppliers' rights and would sell competitively priced products of good quality.

One major objective of Fairtrade was enunciated by the founder of the Salvation Army, William Booth. Booth stated that it did not make sense to preach the Gospel to people whose main concern was struggling to survive, that their energy would not be focused on God but on how to make enough money for sustenance. Therefore, according to Booth Fairtrade was a way of showing Jesus-like care for the livelihood of workers, consequently making them more inclined to hearing about and embracing Jesus and the Gospel. Fairtrade products are still being used in manufacturing and are still being sold. Members of the Salvation Army and Fairtrade claim to still be committed to the objective above because it is not just adults but also child workers who are affected by unfair trade practices. However, reality shows a different story. As much as Fairtrade goods are available, their high price means that people in developing countries can barely afford them, and also that the money from the sales is inadequate to cater to the farmers who produce the goods.

When Fairtrade began, Booth was selling mainly tea to rake in profits. Over time, the product range has increase to cover not only the sale of food crops and cash crops, but also products that place Fair Trade in the supply chain of the textile industry, and even natural resources such as gold and carbon.