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Håkansson, Nanna, 2011. Cost benefit and risk analysis of fairtrade : a minor field study of coffee producers in Tanzania. First cycle, G2E. Uppsala: SLU, Dept. of Economics

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Abstract

Family farms that are producing coffee are heavily dependent on the export of coffee in Tanzania. Fairtrade labeled products are increasing on the world market. Consumers in several industrialised countries are willing to pay extra money for Fairtrade products to support the farmers in the third world. By investigate the existing economic benefits and risks that Fairtrade certified coffee producers receive, compared to conventional coffee producers, this study is a base for a discussion on how much the Fairtrade certification actually match the statements they claim in the northern coffee district of Kilimanjaro in Tanzania. The project is based on a survey and personal interviews with producers, managers and farmers during a SIDA-financed scholarship, Minor Field Study (MFS) in Tanzania that was taking place in the spring of 2010. The survey has been made with 10 respondents from each of the producing categories. Coffee farmers of the Kilimanjaro Native Cooperative Union (KNCU) are making little profits in producing coffee with small margins and are the most risk-averse people with no access to safety nets. A small loss of income can have large consequences when living on the margin and this is a big risk the farmers might face. The impact of Fairtrade is clear when the world market price is low, when the cooperative operates at loss and when Fairtrade successfully is protecting the farmers from being bankrupt. There is no guarantee the farmers are covering the cost of the production of coffee beans today. Far from everyone gets the possibility to produce Fairtrade coffee and becomes a member because their economic situation. Some farmers in the study are not even aware they are producing Fairtrade coffee, which is a big problem today. In order to have a better influence on their own situation, the farmers need better knowledge about Fairtrade. Once the Fairtrade trend has stabilised, the possibilities of becoming a member as a poor farmer should be an option. This will put the farmers in better positions when it comes to bargaining on the local market, and this might also allow access to other markets that could increase the export. The criteria of the Fairtrade labelling consumers in the developed countries are facing are no guarantee of a certain percentage reaching the farmer, but all in all the premium and the guarantee price helps the farmers to plan their production ahead and the ability to make conclusions about the future.

Main title:Cost benefit and risk analysis of fairtrade
Subtitle:a minor field study of coffee producers in Tanzania
Authors:Håkansson, Nanna
Supervisor:Surry, Yves
Examiner:Gren, Ing-Marie
Series:Degree thesis / SLU, Department of Economics
Volume/Sequential designation:646
Year of Publication:2011
Level and depth descriptor:First cycle, G2E
Student's programme affiliation:NK005 Economics and Management - Bachelor's Programme 180 HEC
Department:(NL, NJ) > Dept. of Economics
Keywords:coffee, economy, fairtrade, Tanzania, benefit
URN:NBN:urn:nbn:se:slu:epsilon-8-993
Permanent URL:
http://urn.kb.se/resolve?urn=urn:nbn:se:slu:epsilon-8-993
Subjects:Economics and management
Language:English
Deposited On:02 Mar 2011 13:55
Metadata Last Modified:20 Apr 2012 14:18

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