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How effective is Fair Trade as a tool for the stabilization of agricultural commodity markets? Case of coffee in the Czech Republic

Author

Listed:
  • Jiří HEJKRLÍK

    (Faculty of Tropical AgriSciences, Czech University of Life Sciences Prague, Prague, Czech Republic)

  • Jana MAZANCOVÁ

    (Faculty of Tropical AgriSciences, Czech University of Life Sciences Prague, Prague, Czech Republic)

  • Karolína FOREJTOVÁ

    (Faculty of Tropical AgriSciences, Czech University of Life Sciences Prague, Prague, Czech Republic)

Abstract

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.

Suggested Citation

  • Jiří HEJKRLÍK & Jana MAZANCOVÁ & Karolína FOREJTOVÁ, 2013. "How effective is Fair Trade as a tool for the stabilization of agricultural commodity markets? Case of coffee in the Czech Republic," Agricultural Economics, Czech Academy of Agricultural Sciences, vol. 59(1), pages 8-18.
    • Handle: RePEc:caa:jnlage:v:59:y:2013:i:1:id:41-2012-agricecon
    DOI: 10.17221/41/2012-AGRICECON
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    References listed on IDEAS

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    1. Jonathan Murdoch & Terry Marsden & Jo Banks, 2000. "Quality, Nature, and Embeddedness: Some Theoretical Considerations in the Context of the Food Sector," Economic Geography, Taylor & Francis Journals, vol. 76(2), pages 107-125, April.
    2. Karla Utting, 2009. "Assessing the Impact of Fair Trade Coffee: Towards an Integrative Framework," Journal of Business Ethics, Springer, vol. 86(1), pages 127-149, April.
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