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When fairtrade contracts for some are profitable for others

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  • Claire Chambolle
  • Sylvaine Poret

Abstract

We analyse a vertical chain with perfectly competitive farmers who offer raw products on a spot market to manufacturers who resell the finished goods to a distributor. Absent Fairtrade, the entire raw product is sold on the spot market. A Fairtrade organisation can offer to part of farmers a contract consisting of a guaranteed minimum price and a direct relationship with a distributor. A snowball effect arises when farmers who are not involved in Fairtrade benefit from a higher spot price. This article highlights several mechanisms, either linked to the demand or the market structure, that may explain this snowball effect. , Oxford University Press.

Suggested Citation

  • Claire Chambolle & Sylvaine Poret, 2013. "When fairtrade contracts for some are profitable for others," European Review of Agricultural Economics, Oxford University Press and the European Agricultural and Applied Economics Publications Foundation, vol. 40(5), pages 835-871, December.
    • Handle: RePEc:oup:erevae:v:40:y:2013:i:5:p:835-871
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    Cited by:

    1. Pio Baake & Helene Naegele, 2017. "Competition between For-Profit and Industry Labels: The Case of Social Labels in the Coffee Market," Discussion Papers of DIW Berlin 1686, DIW Berlin, German Institute for Economic Research.
    2. Dick Durevall, 2020. "Fairtrade and Market Efficiency: Fairtrade-Labeled Coffee in the Swedish Coffee Market," Economies, MDPI, vol. 8(2), pages 1-17, April.
    3. Sylvaine Poret, 2014. "Corporate-NGO partnerships in CSR activities: why and how?," Working Papers 2014-04, Alimentation et Sciences Sociales.

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