issues in natural resource trade presentation

Issues In Natural Resource TradeGroup 4 Seminar Presentation

Members:

Joan Pelekamoyo

Cynthia Chitenta

Judith Chama

Chenjelani P. Zulu

Mwenya Mundende

04/18/2023 Issues in Natural Resources Trade 2

Outline of PresentationDefinition of Terms

Introduction

Paper in discussion

• Introduction/Problem Statement

• Aim and Objectives

• Methods

• Findings

• Conclusion

• Recommendations

Critique

Conclusion

Recommendations


Definition of Terms

• Certification refers to the confirmation of certain characteristics of an object, person or organization. Synonymously used with accreditation.

• Trade is the action of buying and selling goods and services or it refers to buying and selling of goods and services for money or money worth.

• Fairtrade is trade between companies in developed countries and producers in developing countries in which fair prices are paid to the producers or it is an alternate approach to conventional trade and is based on a partnership between producers and consumers.

• Natural Resource are materials provided by the Earth that humans can use to make more complex products. OR natural resources can be defined as stocks of materials that exist in the natural environment that are both scarce and economically useful in production or consumption, either in their raw state or after a minimal amount of processing.


Introduction


Introduction

Natural resources are essential in the daily operations of humans because it is from these natural resources we get:

- Food

- Medicines

- Clothing

- Energy

- Water

However, these resources are surrounded by ‘issues’ in the way that they are managed and in their trade.


Examples of ‘Issues’ Associated with Natural Resource1. Property rights. The question of ‘who owns the resource’?

2. Harvesting and exporting restrictions of some natural resources. Implications of restriction?

3. Monotony and overdependence on a single resource to support an economy. E.g. copper in Zambia

4. PRICING of these Natural Resources.


Paper in discussion

Is sustainable agriculture a viable strategy to improve farm income in Central America? A case study on coffee

Authors:

Bernard Kilian, Connie Jones, Lawrence Pratt, and Andre´s Villalobos.

2005


Introduction

The paper explored the two most widely recognized certification schemes (organic and ‘‘fairtrade’’) to determine whether certification to these systems is actually benefiting producers.

Furthermore it also explored the principal differences in production costs and price premiums for the two systems and their effect on different categories of producers.

Finally, the paper tried to take into consideration the dynamics of the conventional and sustainable coffee markets in order to assess the likely medium to long-term economic outlook for producers involved in the certification schemes.


Aim

To make a significant contribution to understanding the current and future economic viability of organic and fairtrade production for coffee producers in Central America.


Objectives1.To offer detailed information on price differentials paid for sustainable coffee in the different Central America coffee producing countries.

2. To compare income situation for average conventional and organic farms in these countries.

3. To investigate future market and price development for sustainable coffee using a conceptual market model.

4. To analyse the potential contribution of sustainable coffee production to rural development.


Map of the Study Area


Methods

The research is based on a combination of both:

- Qualitative

- Quantitative research Designs


Methods Cont…

Published Sources

Detailed Primary Data Sources

1. Interviews: producers and their associates, marketers and exporters2. Surveys: About 100 companies

1. Research activities of CEPAL

2. Two master thesis from Costa Rica.


Findings

• A major finding of the study is that for coffee certification alone does not generate price differentials. The price is always the function of both quality and certification; where the quality is the basic prerequisite for a price per premium and as a tool to differentiate the overall performance of the product.

• Further, countries like Nicaragua, Mexico and Peru participate highly in organic coffee production yet the premium prices were very low while Costa Rica with Limited organic Coffee products but high quality coffee achieve prices above average.


Findings Cont…

• In the short term, organic and certification production schemes were seen to be a viable strategy for Central America farmers to combat coffee crises. However, this certification alone without other changes in quality of coffee, productivity export and production will not be able to answer the regional needs.

• Fairtrade certification concept of demanding high retail prices without premium quality were expected to reduce significantly.


Findings Cont…

• Central America coffee crisis is due to over production, structural and productivity problems of the region’s coffee sector.

• Competition was increasing and farmers had to improve their production and quality even in the case of fairtrade.


Critique

Strengths

1. It was a peer-reviewed article paper.

2. It was a survey carried out therefore it was detailed.

3. The supply study conducted by CIMS is based on information collected from producers and their associates, marketers and exporters of sustainable coffee in Latin America.

4. It also had reinforcement from two other masters theses from the University of Costa Rica.

5. Stratified between conventional and organic coffee growers (comparative study).

6. A conceptual market model was used.

Weaknesses

1. CIMS made approximations of the organizations working with organic and fairtrade

2. The assertion that organic farming raises the productivity of low – input agricultural systems and provides new market opportunities was based on very limited data.

3. It did not state the sampling method.

4. The study was done by organization promoting coffee which may be a bias to promote self interests.

5. The concept of fairtrade was coined by a non profit and the small scale producers in developing countries whose aim was to make profit.

6. No focus on other developing countries like those in Africa who have coffee producers to make a generalization.

7. No recommendations highlighted.


Conclusion of the Paper

Sustainable certification processes have brought several benefits to the region by allowing Latin American producers receive better prices for their coffee. Certification of coffee is one of the major factors needed to price coffee although other factors play a significant role that define coffee price rather than just organic coffee but quality coffee.


Conclusion

Fair trade is seen to help developing countries producing Natural Resources to improve livelihoods and deal with ‘injustice pricing’ set up by the international buyers.

Furthermore, organic farming is believed to be beneficial to soils and is also environmental friendly.

The ‘fairtrade’ has been perceived to be not so fair when it comes to Natural Resources trade. This is so because, the pricing of the natural resource is not done by the producers (developing countries) but by the consumers (developed countries).


Recommendations

1.There is need to come up with permanent solution to income earning through organic coffee or all the tradable natural resources than just for a short term.

2. Producers need to improve on the quality of produces so as to maintain an increase in income generation.

3. Producing countries to determine prices of these Natural Resources.

4. Improving in NR management by small scale businesses to be able to improve quality and enable international market competition


ReferencesKilian B, Jones C, Pratt L, and Villalobos, A.2005. Is sustainable agriculture a viable strategy to improve farm income in Central America? A case study on coffee. Journal of Business Research, Vol. 59, No.5

Renard, M.C. 2003. Fair trade: quality, market and conventions. Journal of Rural Studies. Vol. 91, No. 1.

World Trade Organization. 2010. World Trade Report; Trade in Natural Resources. http://www.wto.org. Accessed on 5th June, 2015.

Businessdictionary.com

http://www.wto.org/


Thank you for listening.

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issues in natural resource trade presentation

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