Globalisation - Fair Trade or Free Trade - Essay Example

rmine poor farmers in some African countries, thus creating a “free trade versus fair trade” conundrum which must be solved if African farmers are to develop modern commercial agricultural techniques and a ready export market. This paper will also discuss some European consumer efforts at buying “fair trade” goods from third-world farmers, but how these efforts are more conscience-palliative than actually effective in increasing the incomes of poor farmers in Africa. No developed nation is completely innocent of protecting its own farmers at the expense of poor third-world producers.

The United States, for example, has a significant farm subsidy program which accounts for 11% of all agricultural receipts. The EU, however, with its more generous program, pays fully 33% of all farm receipts, with subsidies reaching over 50% in some countries. This paper will argue that these blocks to free trade not only cost European consumers (with higher prices and lower availability and quality), but they also directly harm third-world farmers whose welfare the politicians and citizens of the EU claim that they would like to help.

This paper will demonstrate that, with true free trade in farm commodities, the benefits to third-world farmers and European consumers alike would be far greater than Fair Trade practices on their own. No developed nation is immune from the temptation to protect its farmers. In the United States, the current 5-year farm bill (which has been extended every 5 years since the 1930s) will inject approximately $273 billion into farm ‘supports’ over the next five-year period (NPR, 2007) (SLC, 2007).

This amount appears high, but is only 1/10th of the amount of agricultural production of greater than $2.5 trillion expected over the period. Additionally, the farm price supports which take a significant portion of the allocation may not, in fact, be used, as the global prices for commodity farm products like corn and wheat are expected to