"Fairtrade” and Market Failures in Agricultural Commodity Markets
This paper concerns an NGO intervention in agricultural commodity markets known as Fairtrade. Fairtrade pays producers a minimum unit price and provides capacity building support to member cooperative organizations. Fairtrade's organizational capacity support targets those factors believed to r...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/09/7064411/fairtrade-market-failures-agricultural-commodity-markets http://hdl.handle.net/10986/9265 |
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okr-10986-9265 |
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oai_dc |
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Digital Repository |
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Foreign Institution |
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Digital Repositories |
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World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
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AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL MARKETS AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURE AVERAGE PRICE BRAND BUFFER STOCK CAPACITY BUILDING CENTRAL AMERICA CENTRAL AMERICAN CHOCOLATE COCOA COFFEE COFFEE BUYERS COFFEE CRISIS COFFEE FARMERS COFFEE MARKET COFFEE MARKETS COFFEE ORIGINS COFFEE PRICES COFFEE PRODUCERS COFFEE PRODUCTION COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES COMMODITY PRODUCER COMMODITY PRODUCERS COMMODITY PRODUCTION COMMODITY TRADE COMPETITIVENESS CONSUMERS CONVENTIONAL COFFEE COOPERATIVES CROPS DEMAND CURVES DEMAND FUNCTION DEPRESSED PRICES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMETRIC ANALYSIS EXOGENOUS VARIABLES EXPORT MARKETS EXTERNALITIES FAIR FAIR TRADE FARMER FARMER INCOMES FARMER ORGANIZATIONS FARMERS FOOD INDUSTRY FREE MARKET FRESH FRUIT FUTURE RESEARCH FUTURES FUTURES MARKETS GROWTH RATE HECTARES OF LAND ICO IMPERFECT COMPETITION INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INPUT PRICES INTERNATIONAL COMMODITY AGREEMENTS LDCS LESS DEVELOPED COUNTRIES MARGINAL COST MARGINAL COST PRICING MARGINAL REVENUE MARKET ACCESS MARKET FAILURE MARKET FAILURES MARKET LIBERALIZATION MARKET POWER MARKET PRICE MARKET REFORMS MARKET RESEARCH MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MIDDLEMEN MONOPOLY NEW COMMODITY NICHE MARKETS ORGANIC MARKETS PLANTATIONS PRICE CONTROLS PRICE DISTORTIONS PRICE INDEX PRICE MECHANISM PRICE POLICY PRICE PREMIUM PRICE RISK PRICE SCHEDULE PRICE STABILITY PRICE SUPPORT PRICE TREND PRICE UNCERTAINTY PRICE VOLATILITY PRIMARY COMMODITIES PRIMARY COMMODITY PRODUCE PRODUCER GROUPS PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PRODUCER PRICE PRODUCER PRICES RETAIL RURAL PRODUCER SAFETY NETS SALES SMALL PRODUCERS STOCKS SUGAR SUPPLY CURVE SUPPLY CURVES SUPPLY MANAGEMENT SURPLUS TEA TECHNICAL ASSISTANCE TOTAL REVENUE TRADED COMMODITY TRADEMARK TRADEMARKS VOLATILITY WORLD MARKETS |
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AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL MARKETS AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURE AVERAGE PRICE BRAND BUFFER STOCK CAPACITY BUILDING CENTRAL AMERICA CENTRAL AMERICAN CHOCOLATE COCOA COFFEE COFFEE BUYERS COFFEE CRISIS COFFEE FARMERS COFFEE MARKET COFFEE MARKETS COFFEE ORIGINS COFFEE PRICES COFFEE PRODUCERS COFFEE PRODUCTION COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES COMMODITY PRODUCER COMMODITY PRODUCERS COMMODITY PRODUCTION COMMODITY TRADE COMPETITIVENESS CONSUMERS CONVENTIONAL COFFEE COOPERATIVES CROPS DEMAND CURVES DEMAND FUNCTION DEPRESSED PRICES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMETRIC ANALYSIS EXOGENOUS VARIABLES EXPORT MARKETS EXTERNALITIES FAIR FAIR TRADE FARMER FARMER INCOMES FARMER ORGANIZATIONS FARMERS FOOD INDUSTRY FREE MARKET FRESH FRUIT FUTURE RESEARCH FUTURES FUTURES MARKETS GROWTH RATE HECTARES OF LAND ICO IMPERFECT COMPETITION INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INPUT PRICES INTERNATIONAL COMMODITY AGREEMENTS LDCS LESS DEVELOPED COUNTRIES MARGINAL COST MARGINAL COST PRICING MARGINAL REVENUE MARKET ACCESS MARKET FAILURE MARKET FAILURES MARKET LIBERALIZATION MARKET POWER MARKET PRICE MARKET REFORMS MARKET RESEARCH MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MIDDLEMEN MONOPOLY NEW COMMODITY NICHE MARKETS ORGANIC MARKETS PLANTATIONS PRICE CONTROLS PRICE DISTORTIONS PRICE INDEX PRICE MECHANISM PRICE POLICY PRICE PREMIUM PRICE RISK PRICE SCHEDULE PRICE STABILITY PRICE SUPPORT PRICE TREND PRICE UNCERTAINTY PRICE VOLATILITY PRIMARY COMMODITIES PRIMARY COMMODITY PRODUCE PRODUCER GROUPS PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PRODUCER PRICE PRODUCER PRICES RETAIL RURAL PRODUCER SAFETY NETS SALES SMALL PRODUCERS STOCKS SUGAR SUPPLY CURVE SUPPLY CURVES SUPPLY MANAGEMENT SURPLUS TEA TECHNICAL ASSISTANCE TOTAL REVENUE TRADED COMMODITY TRADEMARK TRADEMARKS VOLATILITY WORLD MARKETS Ronchi, Loraine "Fairtrade” and Market Failures in Agricultural Commodity Markets |
| relation |
Policy Research Working Paper; No. 4011 |
| description |
This paper concerns an NGO intervention in agricultural commodity markets known as Fairtrade. Fairtrade pays producers a minimum unit price and provides capacity building support to member cooperative organizations. Fairtrade's organizational capacity support targets those factors believed to reduce the commodity producer's share of returns. Specifically, Fairtrade justifies its intervention in markets like coffee by claiming that market power and a lack of capacity in producer organizations 'marks down' the prices producers receive. As the market share of Fairtrade coffee grows in importance, its intervention in commodity markets is of increasing interest. Using an original data set collected from fieldwork in Costa Rica, this paper assesses the role of Fairtrade in overcoming the market factors it claims limits producer returns. Features of the Costa Rican input market for coffee permit a generalization of the results. The empirical results find that market power is a limiting factor in the Costa Rican market and that Fairtrade does improve the efficiency of cooperatives, thereby increasing the returns to producers. These results do not depend on the minimum price policy of Fairtrade and therefore can inform on its organizational support activities. Finally, the results also suggest that producers selling to vertically integrated, multinational coffee mills face lower producer price 'mark-downs' compared with domestically owned non-cooperative mills. This result contradicts the popular view that the increasing concentration of vertically integrated multinational firms accounts for a decline in producers' share of coffee returns. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Ronchi, Loraine |
| author_facet |
Ronchi, Loraine |
| author_sort |
Ronchi, Loraine |
| title |
"Fairtrade” and Market Failures in Agricultural Commodity Markets |
| title_short |
"Fairtrade” and Market Failures in Agricultural Commodity Markets |
| title_full |
"Fairtrade” and Market Failures in Agricultural Commodity Markets |
| title_fullStr |
"Fairtrade” and Market Failures in Agricultural Commodity Markets |
| title_full_unstemmed |
"Fairtrade” and Market Failures in Agricultural Commodity Markets |
| title_sort |
"fairtrade” and market failures in agricultural commodity markets |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/09/7064411/fairtrade-market-failures-agricultural-commodity-markets http://hdl.handle.net/10986/9265 |
| _version_ |
1764406511267741696 |
| spelling |
okr-10986-92652021-04-23T14:02:41Z "Fairtrade” and Market Failures in Agricultural Commodity Markets Ronchi, Loraine AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL MARKETS AGRICULTURAL PRODUCTION AGRICULTURAL PRODUCTS AGRICULTURE AVERAGE PRICE BRAND BUFFER STOCK CAPACITY BUILDING CENTRAL AMERICA CENTRAL AMERICAN CHOCOLATE COCOA COFFEE COFFEE BUYERS COFFEE CRISIS COFFEE FARMERS COFFEE MARKET COFFEE MARKETS COFFEE ORIGINS COFFEE PRICES COFFEE PRODUCERS COFFEE PRODUCTION COMMODITY COMMODITY MARKETS COMMODITY PRICE COMMODITY PRICES COMMODITY PRODUCER COMMODITY PRODUCERS COMMODITY PRODUCTION COMMODITY TRADE COMPETITIVENESS CONSUMERS CONVENTIONAL COFFEE COOPERATIVES CROPS DEMAND CURVES DEMAND FUNCTION DEPRESSED PRICES DEVELOPMENT ECONOMICS DEVELOPMENT POLICY ECONOMETRIC ANALYSIS EXOGENOUS VARIABLES EXPORT MARKETS EXTERNALITIES FAIR FAIR TRADE FARMER FARMER INCOMES FARMER ORGANIZATIONS FARMERS FOOD INDUSTRY FREE MARKET FRESH FRUIT FUTURE RESEARCH FUTURES FUTURES MARKETS GROWTH RATE HECTARES OF LAND ICO IMPERFECT COMPETITION INCOME INCREASING RETURNS INCREASING RETURNS TO SCALE INEFFICIENCY INFLATION INPUT PRICES INTERNATIONAL COMMODITY AGREEMENTS LDCS LESS DEVELOPED COUNTRIES MARGINAL COST MARGINAL COST PRICING MARGINAL REVENUE MARKET ACCESS MARKET FAILURE MARKET FAILURES MARKET LIBERALIZATION MARKET POWER MARKET PRICE MARKET REFORMS MARKET RESEARCH MARKET SHARE MARKET STRUCTURE MARKETING MARKETING BOARD MARKETING BOARDS MIDDLEMEN MONOPOLY NEW COMMODITY NICHE MARKETS ORGANIC MARKETS PLANTATIONS PRICE CONTROLS PRICE DISTORTIONS PRICE INDEX PRICE MECHANISM PRICE POLICY PRICE PREMIUM PRICE RISK PRICE SCHEDULE PRICE STABILITY PRICE SUPPORT PRICE TREND PRICE UNCERTAINTY PRICE VOLATILITY PRIMARY COMMODITIES PRIMARY COMMODITY PRODUCE PRODUCER GROUPS PRODUCER ORGANIZATION PRODUCER ORGANIZATIONS PRODUCER PRICE PRODUCER PRICES RETAIL RURAL PRODUCER SAFETY NETS SALES SMALL PRODUCERS STOCKS SUGAR SUPPLY CURVE SUPPLY CURVES SUPPLY MANAGEMENT SURPLUS TEA TECHNICAL ASSISTANCE TOTAL REVENUE TRADED COMMODITY TRADEMARK TRADEMARKS VOLATILITY WORLD MARKETS This paper concerns an NGO intervention in agricultural commodity markets known as Fairtrade. Fairtrade pays producers a minimum unit price and provides capacity building support to member cooperative organizations. Fairtrade's organizational capacity support targets those factors believed to reduce the commodity producer's share of returns. Specifically, Fairtrade justifies its intervention in markets like coffee by claiming that market power and a lack of capacity in producer organizations 'marks down' the prices producers receive. As the market share of Fairtrade coffee grows in importance, its intervention in commodity markets is of increasing interest. Using an original data set collected from fieldwork in Costa Rica, this paper assesses the role of Fairtrade in overcoming the market factors it claims limits producer returns. Features of the Costa Rican input market for coffee permit a generalization of the results. The empirical results find that market power is a limiting factor in the Costa Rican market and that Fairtrade does improve the efficiency of cooperatives, thereby increasing the returns to producers. These results do not depend on the minimum price policy of Fairtrade and therefore can inform on its organizational support activities. Finally, the results also suggest that producers selling to vertically integrated, multinational coffee mills face lower producer price 'mark-downs' compared with domestically owned non-cooperative mills. This result contradicts the popular view that the increasing concentration of vertically integrated multinational firms accounts for a decline in producers' share of coffee returns. 2012-06-26T17:54:53Z 2012-06-26T17:54:53Z 2006-09 http://documents.worldbank.org/curated/en/2006/09/7064411/fairtrade-market-failures-agricultural-commodity-markets http://hdl.handle.net/10986/9265 English en_US Policy Research Working Paper; No. 4011 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research |