Answer to Question #209441 in Management for khanyi

Question

fair trade

what is meant by fair trade minimum price(floor price) for coffee beans?

how did the fixing of fair trade minimum prices lead to unethical practices by coffee farmers?

added to the fair trade minimum price ,coffee beans buyers must also pay fixed premuims were used.

nit everybody is convinced that fair trade is working and achieving its objectives and explain reasons why people feel this way

alternative to fair trade works and how it is different from principles followed by fair trade.SPP-COOP

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COFFEE AND FARMERS EQUITY PLEAS ALSO PROVIDE THE REFERNCES WHERE DID YOUGET YOUR ANSWERS. DOES THIS ANSWERS AVAILABLE TO EVERYONE WHO HAS SIGNED TO YOUR WEBSITE

Answer 1

The fair trade minimum price(floor price) for coffee beans or FMP is a price which covers producers' average costs of production and allows them access to their product markets. It represents a formal safety net that protects producers from being forced to sell their products at too low a price when the market price is below the FMP. However, the fixing of fair trade minimum prices lead to unethical practices by coffee farmers is perceived as unethical since people state that the system diverts profits from the poorest farmers, and that the profit is received by corporate firms price.