« Or The current situation of small scale coffee production in Latin America In May 2001, US Border Patrol agents found the bodies of 14 men and women who had ...» Document abstract
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Language : english
economics
presentation
date published
22/01/2005
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level : Advanced
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Summary Recently, the global coffee market has fallen into a profound crisis. Prices paid to coffee producers in real dollar terms, have fallen to a hundred year low. Many families have been forced to abandon traditional farming. There is consequently an important wave of unemployment in the farming sector which is creating more candidates for emigration to the ‘Norte'.
Meanwhile, a growing percentage of small-scale coffee farmers have found a solution to the crisis. They have become Fair trade certified coffee producers, meaning that they have agreed to follow a set of social and environmental standards in the production of their coffee. For these efforts they receive a guaranteed price for their coffee which is higher than that for conventionally produced coffee. Fair trade has enabled these farmers to survive the crisis and think about the future while their neighbours out of this system have a future that will probably involve crossing the Sonora desert.
The interest in analyzing the current situation is to determine the possibilities that fair trade offer to resolve the crisis, and to see if it can work in the long run to save families who produce it, from hunger and exploitation. We do not really know its full potential as the market for fair trade products appeared only a few years ago. After Europe, North America is the new centre of the phenomena. But is it really due to a profound civic sense of consumers, or is it only a fashionable phenomenon?
This essay will try to give a response to these questions. First, we will analyse more deeply the current situation for the majority of small scale producers in Latin America by looking at the crisis and its consequences on an already weak system. Then, we will underline how Fair trade can benefit those traditionally forgotten populations of the world by empowering them. Finally we will present the weaknesses of Fair trade and how they can be overcome.
...
Meanwhile, a growing percentage of small-scale coffee farmers have found a solution to the crisis. They have become Fair trade certified coffee producers, meaning that they have agreed to follow a set of social and environmental standards in the production of their coffee. For these efforts they receive a guaranteed price for their coffee which is higher than that for conventionally produced coffee. Fair trade has enabled these farmers to survive the crisis and think about the future while their neighbours out of this system have a future that will probably involve crossing the Sonora desert.
The interest in analyzing the current situation is to determine the possibilities that fair trade offer to resolve the crisis, and to see if it can work in the long run to save families who produce it, from hunger and exploitation. We do not really know its full potential as the market for fair trade products appeared only a few years ago. After Europe, North America is the new centre of the phenomena. But is it really due to a profound civic sense of consumers, or is it only a fashionable phenomenon?
This essay will try to give a response to these questions. First, we will analyse more deeply the current situation for the majority of small scale producers in Latin America by looking at the crisis and its consequences on an already weak system. Then, we will underline how Fair trade can benefit those traditionally forgotten populations of the world by empowering them. Finally we will present the weaknesses of Fair trade and how they can be overcome.
...
Table of Contents- A population facing an historical crisis.
- Fair trade and organic production as the main solution to the current situation.
- Fair trade system is facing problems it has to solve.
« of labor used in producing output with the current state of firm i. The above equation depicts a situation in which to grow faster than in a small firm because ...» Document abstract
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260 word format
Language : english
economics
theses
date published
27/07/2006
review : not yet assessed
level : Expert
requested 33 times
SummaryFor several reasons, knowledge cannot be treated like any other commodity. One of these reasons is the nonrivalrous nature of knowledge, which means that one person’s use of certain knowledge does not diminish another person’s use of the same knowledge (at the same time). This important property of knowledge is used in several early models of R&D-based growth1,
e.g. Romer (1990), Grossman and Helpman (1991), and Aghion and Howitt (1992). In these models this property leads to a scale effect, which boils down to larger economies growing faster than smaller economies (with the measure of size suitably defined (cf. Backus, Kehoe and Kehoe 1992)).
In an influential paper, Jones (1995a) pointed out that growth with scale effects, as predicted
by the early models of R&D-based growth, is inconsistent with empirical facts. Over the last
40 years the OECD countries have experienced a tremendous rise in the number of people involved in R&D activities whereas the growth rates of per-capita income have shown no corresponding increase. This is a puzzling observation and has led to new models of R&D- based growth that did not incorporate scale effects e.g. Jones (1995b), Smulders and van de Klundert (1995), Young (1998), Li (2000), and Peretto and Smulders (2002).
Generally, however, these models suffer from the ‘Solow critique’; Solow (1994) criticizes
(some) growth theorists because they “… often just insert favorable assumptions in an unearned way; and then when they put in their thumb and pull out the vary plum they have inserted, there is a tendency to think that something has been proved.” (p. 53). In the models
of growth without scale effects the prediction of a scale effects in growth of the early models
of R&D-based growth is removed by limiting the extent of the spillovers associated with knowledge’s nonrivalrousness, but often the much-needed (micro-)economic foundation for
the crucial assumption in these models regarding the extent of knowledge spillovers - and the
mechanism limiting their extent - is lacking. Assuming that knowledge is rivalrous (not nonrivalrous) to limit spillovers and dispose of the scale effects prediction of the early models
of R&D-based growth simply does not shed much light on the issue of growth without scale effects however.
provide background information regarding, amongst others, work discussed in the main text, data used in figures, etc.
e.g. Romer (1990), Grossman and Helpman (1991), and Aghion and Howitt (1992). In these models this property leads to a scale effect, which boils down to larger economies growing faster than smaller economies (with the measure of size suitably defined (cf. Backus, Kehoe and Kehoe 1992)).
In an influential paper, Jones (1995a) pointed out that growth with scale effects, as predicted
by the early models of R&D-based growth, is inconsistent with empirical facts. Over the last
40 years the OECD countries have experienced a tremendous rise in the number of people involved in R&D activities whereas the growth rates of per-capita income have shown no corresponding increase. This is a puzzling observation and has led to new models of R&D- based growth that did not incorporate scale effects e.g. Jones (1995b), Smulders and van de Klundert (1995), Young (1998), Li (2000), and Peretto and Smulders (2002).
Generally, however, these models suffer from the ‘Solow critique’; Solow (1994) criticizes
(some) growth theorists because they “… often just insert favorable assumptions in an unearned way; and then when they put in their thumb and pull out the vary plum they have inserted, there is a tendency to think that something has been proved.” (p. 53). In the models
of growth without scale effects the prediction of a scale effects in growth of the early models
of R&D-based growth is removed by limiting the extent of the spillovers associated with knowledge’s nonrivalrousness, but often the much-needed (micro-)economic foundation for
the crucial assumption in these models regarding the extent of knowledge spillovers - and the
mechanism limiting their extent - is lacking. Assuming that knowledge is rivalrous (not nonrivalrous) to limit spillovers and dispose of the scale effects prediction of the early models
of R&D-based growth simply does not shed much light on the issue of growth without scale effects however.
provide background information regarding, amongst others, work discussed in the main text, data used in figures, etc.
Table of Contents- Grouth and scale effects
- Knowledge, R&D and spilovers, at the firm
- Grouth without scale effects and structural
- Measurement issues in the study of R&D-based
- The product life cycle, demand
1
knowledge network
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