Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?

@article{deJanvry2015FairTA,
  title={Fair Trade and Free Entry: Can a Disequilibrium Market Serve as a Development Tool?},
  author={Alain de Janvry and Craig McIntosh and Elisabeth Sadoulet},
  journal={Review of Economics and Statistics},
  year={2015},
  volume={97},
  pages={567-573}
}
Abstract The Fair Trade (FT) coffee initiative attempts to channel charity from consumers to poor producers via increased prices. We show that the rules of the FT system permit this rent to be eliminated due to free entry and costly excess certification of output. Using data from an association of coffee cooperatives in Central America, we verify that expected producer benefits are close to 0 when we take into account the output that is certified but not sold as FT. Our results illustrate how… 

The Effects of Fair Trade Certification: Evidence from Coffee Producers in Costa Rica

We study the effects of Fair Trade (FT) certification of coffee on producers and households in Costa Rica. Examining the production dynamics of all Costa Rican coffee mills from 1999–2014, we find

The Impacts of Fair Trade Certification: Evidence From Coffee Producers in Costa Rica (Preliminary and Incomplete)

We estimate the effects of Fair Trade (FT) certification on coffee producers in Costa Rica. We begin by examining a panel of all coffee producers between 1999 and 2010. We find that FT certification

Where Does the Fairtrade Money Go? How Much Consumers Pay Extra for Fairtrade Coffee and How This Value Is Split along the Value Chain

Fairtrade certification aims at transferring wealth from the consumer to the farmer; however, coffee passes through many hands before reaching final consumers. Bringing together retail, wholesale,

Who Benefits from Fairtrade? Evidence from the Swedish Coffee Market

This paper analyses how the premium customers pay for Fairtrade-labelled coffee is distributed in the Swedish market, using information on costs of production and scanner data on almost all roasted

Are Fairtrade Prices Fair? An Analysis of the Distribution of Returns in the Swedish Coffee Market

Consumers pay a premium for Fair Trade coffee, often assuming that it mainly benefits poor coffee farmers. However, several studies report that most of the premium accrues to actors in the consumer

Middlemen, fair traders, and poverty

We propose a spatial model of producer market access where local middlemen reap market power due to match friction, and fair traders enter to present an alternative. The model features location as a

Fairtrade and Market Efficiency: Fairtrade-Labeled Coffee in the Swedish Coffee Market

Fairtrade labeling has the potential to increase market efficiency by connecting farmers to altruistic consumers who are willing to pay a premium for sustainability-certified products. A requirement

Vertical Integration and Relational Contracts: Evidence from the Costa Rica Coffee Chain

This paper compares integrated firms, long-term relationships and markets, and how they adapt to shocks in the Costa Rican coffee chain. The industry is characterised by significant uncertainty.

Engel Curves for Fair Trade Consumption and Development Perspectives for Producers: Evidence from Data on Real Fairtrade Purchases

Abstract While Fairtrade sales have exhibited two-digit growth rates over recent decades, their capacity to become large enough to generate substantial gains for producers is still uncertain.
...

References

SHOWING 1-10 OF 48 REFERENCES

The Impacts of Fair Trade Certification: Evidence From Coffee Producers in Costa Rica (Preliminary and Incomplete)

We estimate the effects of Fair Trade (FT) certification on coffee producers in Costa Rica. We begin by examining a panel of all coffee producers between 1999 and 2010. We find that FT certification

Fair Trade is Counterproductive and Unfair

"Fair trade - paying a price premium for commodities based not on quality but on employment and other conditions - is counterproductive and unfair. It results in consumers getting a lower-quality

Middlemen, fair traders, and poverty

We propose a spatial model of producer market access where local middlemen reap market power due to match friction, and fair traders enter to present an alternative. The model features location as a

Poverty Alleviation Through Participation in Fair Trade Coffee Networks

In 1997 world coffee sales reached US$43 billion. But while developing countries produced the raw material on which this wealth was built, they received less than one-third of the total revenue. Most

Fair Trade Labeling: Inside or Outside Supermarkets?

This article is a theoretical contribution to the debate surrounding the introduction of Fair Trade products into large-scale retail distribution. In the model, a Fair Trade certifier and a

Does fair trade make a difference? The case of small coffee producers in Nicaragua

Fair trade represents an innovative approach to make the rules of global trade work for disadvantaged producers in the South and for sustainable development. But who are the real beneficiaries of

Does Fair Trade Coffee Help the Poor? Evidence from Costa Rica and Guatemala

Proponents of Fair Trade claim it improves the lives of farmers in developing countries by providing them a higher sale price for their crops, allowing for a higher standard of living, and offering

Is My Fair Trade Coffee Really Fair? Trends and Challenges in Fair Trade Certification

Fair trade sales grew rapidly over the past decade but it is still a small and decidedly niche market and rifts over further growth are deepening. There is currently a fierce debate between advocates

Fair Trade: A Cup at a Time?

Fair Trade coffee campaigns have improved the lives of small-scale coffee farmers and their families by raising wages, creating direct trade links to farming cooperatives, and providing access to