Ghana just like most developing countries is facing the challenge of how to deal with high poverty rates coupled with declining prices of traditional export products. The export of non-traditional export products in the agricultural sector is considered as one of the strategies to address poverty. However, concerns are been raised about the free trade policy, stating that free trade may not necessarily be benefiting all participants equally. In other words, other nations, especially developing nations have become worse off after opening up their markets for free trade. On the other hand many developed nations have benefited considerably from free trade. In an attempt to address these market imbalances resulting from free trade, Fairtrade emerged as an intervention tool. Fairtrade aims to improve international trading conditions in order to benefit smallholder producers in developing nations. The Fairtrade organisation further claims that its principles are in line with poverty alleviation and sustainable livelihood. However, Fairtrade suffers a credibility gap because there is a lack of independent research to support their claims. To date in Ghana, there is little research examining the claims of the Fairtrade organisation. Thus, in order to contribute to the Fairtrade discourse in Ghana, the study investigated the validity of Fairtrades claims that it contributes towards poverty alleviation and sustainable livelihood. In line with this, the study objectives were: (1) to assess whether households participating in Fairtrade programmes have achieved greater positive, long term socio-economic impacts than households not participating (2) to ascertain if Fairtrade programmes are lifting people out of poverty, and (3) to evaluate the direct and indirect impacts of Fairtrade in the study area.
To achieve the study objectives, both primary and secondary data were employed. The primary data was collected from smallholder shea producer cooperatives located in the Upper East Region of Ghana that are Fairtrade certified. The data was then analysed using a sustainable livelihoods framework, which was developed in the study. The study explored the impact Fairtrade had on poverty reduction, through Fairtrade financial and non-financial support to smallholder shea producers in the study area. A mixed method approach was adopted: that is qualitative and quantitative methods were applied in the case study. A survey was undertaken, guideline-based interviews and group discussions were conducted, and observations were realised. A total of 530 individuals took part in the study.
The results of the study showed that Fairtrade participating households in the study area have witnessed substantial positive changes as a result of Fairtrade. The Fairtrade initiative has managed to empower smallholder producers to access market that offers stable prices, and have gained from minimum prices. Furthermore, smallholder producers have been allowed an opportunity to expand their business into export markets, and enjoyed an increase in incomes and households assets. However, at the wider community level the benefits are rather limited and insignificant. Despite positive effects at the household level the study discovers that, Fairtrade producers faced challenges including high Fairtrade administration costs. It was also revealed by the study that, these high administrative costs and the need to form cooperatives posed as barriers to producers who cannot meet these requirements in order to participate. Even though that is the case, Fairtrade offers valuable development opportunities to producers who participate.
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