A Framework for Discussing Normative Theories of Business Et

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The main way that Fair Trade directly addresses this more subtle issue is through the guarantee of above-market prices which raise the income of producers.

A farmer can borrow money during the planting season for seeds and fertilizer, and pay the lender back, with interest, after he or she has sold the crop. For many farmers in developing countries, the problem is not access to credit but rather a lack of competition in credit markets. As this is the same uncompetitive coyote situation explained earlier, there are no competing finance offers, and financing rates can be as high as 100 per cent per annum (Bacon, 2004; Zárate (interview), 2003). Nelson and Galvez (2000) describe how these informal credit markets are biased against small farmers in rural Ecuador.

Oxfam Trading rapidly expanded its sales of fairly traded products during the 1970s and 1980s. qxd 5/9/2005 12:27 PM 22 Page 22 FAIR TRADE (trading under the name ‘Oxfam Fair Trade Company’), to bring it in line with the wider Fair Trade movement, which included campaigning for improvements in the terms of trade and conditions for workers. Oxfam’s largest ever response to a humanitarian disaster was in the Great Lakes region of Central Africa in the mid-1990s. But aid alone could not provide solutions to the political, economic and social problems of the region.

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