Does Inequality Matter? - CEPA

Good Practice in Poverty Measurement
In effort to lower costs,
less sustainable production
methods are used in
the developing world,
harming workers and the
environment.
Farmers and the farm
workers in the developing
world are poor.
Fair Trade price covers the costs of
sustainable production.
Environmental standards prohibit
certain chemicals and land overuse;
premium required for certified
organic products.
Fair Trade guarantees minimum
regional wages for workers and
price floors for smallholders. A social
premium is guaranteed, which must
be spent on development projects to
improve well-being of farm workers
and smallholder farmers.
Source: Nicholls and Opal (2005: 53)
5 Taming the corporate sector
Economic practices also are increasingly shaped by ‘transnational hegemonic
forces,’ partly embodied by corporations. The role of corporate actors
becomes more significant when countries open their economies to foreign
investment or presence by foreign companies. Pre-determined practices
carry over to farmers in South Asia when foreign enterprises establish or
partner with South Asian agribusinesses; there is limited manoeuvrability
for small-scale farmers to assert their farming practices in a sustainable
manner or to share benefits reaped from the presence of MNCs. In many
developing countries they compete to find sites with the least government
involvement in the regulation of its economy, the cheapest labour, the
lowest tariffs and the most relaxed environmental laws (deSoto 2000;
Howard-Hassman 2004; Rodriguez 2004). These practices, in the name of
cutting production costs, do not preserve human, economic or civil rights,
and may pose greater harm to ecological sustainability.
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