How effective is Fair Trade as a tool for the stabilization of agricultural commodity markets? Case of coffee in the Czech Republic
J. Hejkrlík, J. Mazancová, K. Forejtováhttps://doi.org/10.17221/41/2012-AGRICECONCitation:Hejkrlík J., Mazancová J., Forejtová K. (2013): How effective is Fair Trade as a tool for the stabilization of agricultural commodity markets? Case of coffee in the Czech Republic. Agric. Econ. – Czech, 59: 8-18.
Fair Trade is one of the leading systems of the Corporate Social Responsibility and a price stabilization mechanism for producers in developing countries. It is being practiced by more and more Czech importers and manufactures of the tropical agricultural commodities. Coffee represents the highest market share. However, a higher final retail price functions as a strong inhibitor of the dynamic market growth. The article uses the linear static model applied to various consumer-perceived factors influencing the retail price of the conventional, organic and Fair Trade coffee available in the Czech Republic. The quantitative research is supported by the questionnaire for the analysis of the attitude of regular Fair Trade buyers towards the perceived quality and price expectations of the Fair Trade coffee. Even after the stratification of the coffee market into low and high market products and brands, the Fair Trade quality shows a very strong influence on the final retail price. The efficiency of Fair Trade expressed in terms of the ratio of the price premium paid by the consumer and the price premium received by the producer is in the current stage of the Fair Trade market questionable.Keywords:
organic, efficiency, fairtrade premium, commodity