Free Trade or Food Aid 2 3454KB Nov 08 2012 08:50:52 AM

Food Imbalances
Evaluate the impacts of fair
trade, free trade and food aid
on alleviating food shortages.
The 3 Impacts:
Free Trade
Free Trade
Is free trade the solution?
Free trade is a system in which goods, capital, and
labor flow freely between nations, without barriers
which could hinder the trade process.
• The idea behind free trade is that :
• it will lower prices for goods and services by promoting
• Domestic producers will not longer be able to rely on
government subsidies and other forms of assistance,
including quotas.
• foreign companies can make inroads on new markets
when barriers to trade are lifted.
• encourages innovation (competition between companies
sparks a need to come up with innovative products)
• If developing countries had an easy access to trade they
could be lifted out of poverty quickly as they are resource
The consequences of this for people in developing countries
are disastrous. Unable to sell their goods, they cannot make
money through trade. Meanwhile, their own producers are
going out of business because of unfair competition.
If free trade is applied it is a correct
reflection of the actual supply and
Tomato Wars
Tomato growers in Florida and Mexico are
feuding over prices – and it's the same
argument heard nearly twenty years ago
when NAFTA was first signed. American
farmers feared cheaper Mexican crops would
flood the market here and put them out of
• Brown says the average box of Florida
tomatoes sells for about $6. The cost to
grow that same box is $9-10
• It costs $5 to grow a box of tomatoes in
Mexico and it sells for about $9. So unlike
Florida growers, Mexican tomato farmers
are turning a very good profit.
Evaluate Free Trade as an option to
alleviate food shortages- What do you
Fair Trade
Fair Trade
Is Fair Trade the solution?
Fair Trade
Fair Trade
Fair Trade
Just Us!
Fair Trade
What is Fair Trade?
• Fair trade is a social movement aiming to improve trading
conditions and sustainability and focuses largely on fair
exports from developing countries to developed countries
• Fair trade is paying farmers in LEDC’s a fair price for their
produce rather than exploiting them as some would claim
may be done by Transnational corporations or corrupt
government officials.
• Fair trade also emphasizes the importance of the farmers
to meet environmental and social standards in their
farming practices. This encourages sustainable farming
practices which protects against soil degradation and
allows longevity in producing the crop.
Fair Trade
• Farmers can plan for the long-term. The market price can soar or
slump below the cost of production; whereas Fair trade standards
include a minimum Price which covers the cost of sustainable
• When the market price goes above the Fair trade Minimum Price,
Fair trade producer groups can negotiate higher prices that reflect
what is going on in the market.
• During times of high prices an additional Fair trade Premium is
included in the price paid to farmers’ organizations. This Premium is
used for:
social, environmental and business initiatives
access seed banks
Finance additional agricultural supplies
improve community services such as infrastructure, health and education.
Fair Trade
Fair Trade
Evaluate Fair Trade as an option
to alleviate food shortages- What
do you think?
Food Aid
What is Food Aid?
• Food Aid is International concessional flows in the form of food
or of cash to purchase food in support of food assistance
• Food Aid from MDC’s to LDC’s in need can make the
situation even worse. Farmers in LCD’s are trying to establish
a commercial food growing industry in their country there
could be no greater blow than to have to compete with free or
subsidized food from the USA or Europe.
• Food Aid is important on Humanitarian grounds when a
natural disaster
Other benefits:
Food aid
- Helps combat more than
hunger, it also helps combat
HIV, HIV treatments can only be
taken on a full stomach so it
helps patients in need that
would get worse if were to take
the treatment unfed.
- Reduces the consumption of
dangerous wild foods that would
increase vulnerability to diseases.
Food Aid
Evaluate Food Aid as an option to
alleviate food shortages- What do
you think?
TEDxAshokaU 2011- Paul Rice: Awakening the Sleeping Giant: Fair Trade on
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