Development Strategies - Global Environment, Business Environment Video Lecture | Business Environment - B Com

hey everybody hope you're doing well
today well let's check out the last
video in the international trade and
economic development series called
development strategies and understanding
the logic behind them and what they
involve our fair trade organizations
which you've probably heard of if you've
bought coffee or some sort of good from
a country that has a label on it that
says fair trade certificate
certification mark you've actually
participated in this process so let's
check out to see what they are well the
basic idea is that in many developing
countries small-scale farmers and
workers are unable to make a living
income and so low world prices and the
reason really is that low world prices
for primary products and high profits
for the middle people tariff escalation
and poor working conditions make life
extremely difficult so developing
nations and international organizations
have come up with these fair trade ideas
which are an attempt to ensure that
producers of food and some non-food
producers and also products and
developing countries receive a fair deal
when they are selling this product and
so the basic idea is that if consumers
are aware of the harsh and often unfair
conditions facing farmers then perhaps
they'll be willing to buy from producers
who pay a fair price to the farmer so
the idea is that you you inform the
consumers in developing developed
nations of the realities of living and
developing nations and so these free
trade or fair trade or going to not free
trade fair trade organizations have been
developed developed okay so one
organization is called the Fairtrade
labeling organization International
which is a system where products can be
certified that they meet the standards
of this organization which gives them
the right to display the Fairtrade
certification and the organization
really got its kickstart in 1988 and
it's been really successful a fellow
regularly inspects and certifies around
500 producer organizations in more than
50 countries in Africa Asia and Latin
America which results in fair trading
conditions for approximately one
million farmers workers and their
families so it's pretty cool and it's
not easy a trading company wishing to
qualify for the International Fairtrade
certification mark must meet the
following qualifications or criteria
okay so the number one thing is that the
product must reach out the trader as
directly as possible with as few people
in intermediaries in the middle the
product must be purchased at least the
fair trade minimum price and this is a
guaranteed price that covers production
costs and provides a living income it
covers the cost of sustainable
production so that's pretty cool so they
get a guaranteed price the producer also
receives a premium price if the product
is certified as organic the trader who
is the person who's buying the goods and
bringing them to the developed nation to
to market must commit to a long term
contract which in turn gives security to
the producer the producer also has
access to credit from the trader and
upon request of up to 60 percent of the
purchase price so one of the things
that's really difficult in in
development is that small farmers and
poor people have a difficult time
receiving credit which is to say getting
loans and that's because many of these
people don't even have the ability to
have a bank account maybe for illiteracy
or just simple practicality or in
practicality of of going to a bank so if
the producer has access to credit from
the trader that's a huge huge boon for
for the small farmers they must commit
of course to no use of child labour the
producer must use sustainable farming
methods to produce the good and the
trader also pays a Fairtrade premium to
the producer and so the producer uses
these funds to a local Community
Development the producers decide how the
money will be spent but it is usually
used to promote health education and
other social welfare programs so the
producers are then also held accountable
to the FL for the appropriate use of the
funds and so you may have seen goods I
mean they're Fairtrade certified
products
are all over the place and they're
usually commodities and they usually
come from developing nations obviously
that's the whole purpose of it right so
bananas cacao coffee dried fruit fresh
fruit vegetables honey juice ki Noah
rice spices sugar tea and wine and some
non-food products include cotton cut
flowers ornamental plants and these are
things that jocelyn blink has listed in
her course companion i have a good buddy
who lives in nicaragua who has started a
Fairtrade dried fruit business and it's
extraordinarily successful his main
customer is Whole Foods in the United
States and he's he is a direct link
between small and he actually focused on
single mothers so in order to qualify to
produce fruit through his organization
and he's now producing and and and
creating trade well he's creating an
opportunity for small single mothers in
Nicaragua to have their product sold at
Whole Foods in the United States it's
super cool and it's for real and it's
part of the Fairtrade organization and
these women now have a sustainable
income as the result of having access to
markets it's not like they weren't
growing good fruit before and and my
body isn't even really necessarily doing
anything that they didn't have access or
didn't could didn't do before he just
now has the means to take the products
at mainly mango and pineapple and dry
out the fruit and then sell it in the
marketplace in the United States that
whole food which is like you know the
coolest swankiest health food store in
the United States so these sorts of
development strategies have been very
very successful over the years and the
main reason is there's this emphasis on
granting a living income and it provides
security to to poor people demanding
proper working conditions it encourages
sustainable production and of course it
creates funding for local community
development and you'll be surprised if
there is money available on the small
you take a community of small agrarian
workers in the Dominican Republic for
example in my own case
those people are their family and you
find extraordinary success rates at
small communities using the funds wisely
to promote the well-being of their
people whether it's through paying a
salary for a nurse to come up on a
regular basis to check out the health of
their children and other and of the
women in the community or producing or
creating the ability for maybe a tutor
or allowing children providing access
maybe transportation for children to go
to school especially secondary schools
which tend to be farther away maybe
providing funding for a teacher to
actually come to their community so that
kids don't have to walk you know three
four kilometres and one way to school so
if people have access to funds to help
their own community there's a really
high success rate for those types of
programs and all of that leads to
development I mean that's more that's
like it's almost like these kinds of
ideas are almost like circumventing the
whole you must have economic growth
first before development happens no it's
going right to the root fair trade
organizations go right to the root of
development and enabling small farmers
to increase their standard of living
through having access to international
markets all right my friends I hope you
found this video to be helpful and with
this video ends the international trade
and economic development section of or
series of videos posted here on this
channel all right Joe talked in a bit