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FAIRTRADE
COTTON -
Frequently
Asked Questions
In
Why are Fairtrade Cotton / Product expensive?
Fairtrade is not based on popular economic principles
of demand and supply and hence the price of cotton is
not worked out conventionally. The pricing of
Fairtrade cotton is based on “minimum Fairtrade
price (MFP)” which is normally equal to the cost of
production of that commodity. FLO has worked out a MFP
for each commodity, for each country. Hence the price
of Fairtrade cotton from India may differ from West
Africa due to different cost of production.
Production
costs can sometimes be higher due to the organic
farming practices. Economies of scale can also have a
significant impact in pricing: production of smaller
quantities can often cost producers and processors
more at every turn (packaging, transport, etc) because
they cannot benefit from a large enough scale to use
as a bargaining position
In
addition to this, there is a Fairtrade premium paid on
purchase of every kilogram of seed cotton which makes
the price even more expensive. The farmers and workers
themselves decide how these funds are to be spent. It
is generally used for improvements in health,
education or other social facilities, although it may
also be used for certain development projects to
enable growers to improve productivity or reduce their
reliance on single commodities.
Will
Fairtrade prices will be same as conventional in a
longer run ?
The sole purpose of Fairtrade is to make the small
farmer independent and give him freedom from the
clutches of money lenders and traders.
Gradually
with the support of customers, as the small farmer
groups start growing big and achieve economies of
scale, the cost of Fairtrade cotton will also come
down. Hence in a longer run, the Fairtrade cotton
products will not only become more and more
competitive but also create a fairer environment of
trade.
Global
Fairtrade market
In 2005, Fairtrade sales amounted to approximately €1.1
billion worldwide, a 37 % year-to-year increase over
2004. As per December 2005, 508 Certified Producer
Organizations in 58 developing countries were
Fairtrade Certified. That represents more than one
million producers and five million people, including
dependents, benefiting directly from Fairtrade.
Brands
promoting Fairtrade products
-
Marks
& Spencers, UK
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Topshop,
France
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Epona,
UK
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Gossypium,
UK
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Hug
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People
Tree
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Traidcraft
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