Inefficient Marketing System
One reason for low prices is that Fairtrade farmers are forced to sell through a monopsonist cooperative, which may be inefficient or corrupt – certainly some private traders are more efficient than some cooperatives. They cannot choose the buyer who offers the best price, or switch when their cooperative is going bankrupt. There are also complaints that Fairtrade deviates from the free market ideal of some economists. Brink calls fair trade a “misguided attempt to make up for market failures” encouraging market inefficiencies and overproduction.
Read more about this topic: Fair Trade Debate
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