strategy
Paying fair prices
Synonyms:
Setting fair pricesDetermining equitable prices
Implementation:
Fair prices have been defined and adopted by international bodies only in the case of a few commodities. Without a benchmark, the definition of a "fair price" is difficult. Traidcraft, a UK-based fair trading company has addressed the "fair price" issue in three ways: 1. All the producers visited were asked how they would define a fair price for their products and whether they thought the prices paid by the company measured up to their expectation of fairness; 2. Prices paid by the company were compared where possible with prices producers could obtain selling to other traders; 3. Products appearing in the company's catalogues were listed alongside information on cost and profit to the producer. As a result of its fair trade objectives, Traidcraft pays US$6.75/kg for bulk instant coffee from a factory in Tanzania. The factory supplies the same coffee to a multinational retailer at US$4 to 4.50/kg. At the same time, it is considered that, in 1994, coffee farmers in Tanzania generally received less that half the 'international fair price' for their coffees. Traidcraft also pays 32% more for its Tanzanian honey than the honey coop's other export customer and 55% above the local market price; the "fair price" sales provide the coop with a profit of 33%, which have enabled it to replace some of the traditional bark hive which cause damage to trees. Claim:
The price is fair if it absorbs production and manufacturing costs and gives room for future capital investment. Constrained by:
Rigging pricesInflating pricesLiberalizing pricesBoosting local wholesale pricesIncreasing commodity profit margins Facilitates:
Switching from price support to conservation supportProviding for equitable return on property transactions Facilitated by:
Evaluating goods pricesReporting market pricesEstablishing price schemesReducing price discriminationMaintaining national monetary and fiscal disciplineIncluding full value of forests in market prices for forest productsIncluding full value of forests in market prices for forest products Values:
Unfairness Subjects:
Communication → ExhibitionsCommerce → Currency
Commerce → Purchasing, supplying
Type Classification:
C: Cross-sectoral strategies Related UN Sustainable Development Goals:
