The idea behind free trade is that : it will lower prices for goods and services by promoting competition. 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 rich Free trade is a system in which goods, capital, and labor flow freely between nations, without barriers which could hinder the trade process.
Free Trade 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 demand
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 business. 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 think? Free Trade
Fair Trade Is Fair Trade the solution? Fair Trade
What is Fair Trade? 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: 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 production. 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 Loans access seed banks Finance additional agricultural supplies improve community services such as infrastructure, health and education.
What is Food Aid? Food Aid Food Aid is International concessional flows in the form of food or of cash to purchase food in support of food assistance programs. 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 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.