How do Fair Trade organisations protect producers of raw materials from poor economic conditions?
A.
A standard for working conditions is set
B.
Final products are marketed as Fair Trade
C.
Money is provided to communal funds
D.
A minimum price is set for purchase of items
The Answer Is:
D
This question includes an explanation.
Explanation:
Fair Trade organisations protect producers economically by ensuring a minimum price for raw materials, regardless of market fluctuations. The L5M5 study guide (old p.224, new p.303) explains that this stabilises producer incomes against volatile commodity prices, tariffs, or currency risks. While Fair Trade also involves better working conditions and community investment, the primary economic safeguard is the guaranteed minimum price. Procurement professionals should recognise how Fair Trade contributes to supply chain stability and resilience.
???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.303
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