Although the current recession hasn’t affected the production of Fair Trade products much, some in Latin America fear the potential for losses. Here in the United States, economists remain optimistic that Fair Trade products will remain available and bought by the public. “The issue is how responsive consumers are when their expenditures change,” said Voehringer Professor of Economics Robert G. Williams. “If it’s co-ops purchasing these items than it would probably not change.”
One of the largest products consumed in the United States is coffee. Williams believes that consumers are not likely to change their purchasing habits if they are committed to the policies of the Fair Trade Organization, especially if they are purchasing coffee.
However, some are wary of the influence of large corporations that are already known for making bulk goods available at cheap prices.
“If you look at the last couple of months the only company with growth is Wal-Mart,” said junior economics major Karl Floitgraf. “People aren’t going as much to places that specialize with Fair Trade products.”
The appeal of Fair Trade products is a guarantee that all products are being produced and traded in an ethical manner. Much of the products are stabilized through the organization, with farmers guaranteed competitive wages ahead of their crops.
“Coffee is the most widely traded product in the globe,” said senior Shania Machlus, a member of the Greenleaf co-op. “That’s one of the reasons the Fair Trade organization was started: in order to regulate the market fairly.”
Machlus went on to say that organizations like the Greenleaf operate with the intention of providing an ethical alternative to free market goods. Also, the Greenleaf has managed to keep their prices competitive with other distributors.
“Coffee is still cheaper at the Greenleaf than at Starbucks,” said Machlus.
However, coffee is not the only product that the Fair Trade organization distributes. They offer a wide range of goods ranging from organic foods to handicrafts.
Another factor that might help stabilize the Fair Trade products is that all products are protected through an intricate system of pricing. The Fair Trade organization requires both a minimum and a premium price range for their goods depending on the geographical origin of the product and the demand of the product itself.
However, Floitgraf’s mention of Wal-Mart may indeed predict the trend of many consumers from the United States. However, the global market will probably not change their purchasing habits when it comes to Fair Trade goods.
“The success of Wal-Mart recently is a significant read on the economy,” said Floitgraf. “The smaller companies are going to be squeezed out worse and worse than in the past.”
This may indicate that independent grocers will find a competitive edge from heavyweights like Trader Joe’s and Whole Foods, places that offer Fair Trade goods in mass quantities. However, these products will continue to be consumed by Americans who believe in the policies and decisions of fair trade.
“I have much more faith in fair trade than in the free market,” said Machlus.