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The main focus of my group's presentation is on fair trade & free trade in El Salvador. We also focus on true strengths in El Salvador dealing with coffee. El Salvador is the smallest country in Central America and compactly populated. The economy has been based on growing coffee since the mid-19th century and since then El Salvador has been known to grow and brew some of the world's most pleasing coffee. El Salvador has the third leading market in the Central American region and El Salvador's Gross Domestic Product brings in about US$6,200 per capita. This value may seem like a promising figure for future progress, but this “developing country” is still among the 10 poorest countries in Latin America. A global movement is sweeping through El Salvador and Central America, a movement for economic development, fair trade.
Fair trade is a market-based approach that aims to help producers in developing countries and promote sustainability. “Fair Trade has also contributed to strengthening farmers' organisations, which in turn has fostered access to other opportunities for cooperatives and their members. These opportunities include direct marketing of their coffee and other commodities, and access to training in organic farming techniques and other methods to improve the quality of their coffee.” (Murray, D. L., Raynolds, L. T., Taylor, P. L. Pp 183) The movement advocates the payment of a higher price to producers. It focuses particularly on exports from developing countries to developed countries. Farmers may agree to contract in the fair trade, but undoubtedly some farmers employ on the free trade market. “Individual's value hint at how in a free-trade, globalized world people can pursue their own rights agendas.” (Moodie Pp 74) Free trade is a type of trade policy that allows traders to act and transact without interference from government. This may seem like a better mode of operation because it's tax free, but under a free trade policy, prices are a reflection of true supply and demand. The consistency of money flow is not very dependable.
“Together with free trade experiments, one of the main features of the Central American Federation was the constant turmoil. The brief interlude of prosperity that lasted until 1826 was followed by almost twenty years of civil war that caused the collapse of the Central American Federation.” (Lindo-Fuentes Pp 50) Fair trade coffee provides balanced incomes and sustainable work schedules to those who produce the product. When consumers purchase fair trade coffee, the buyer casts a vote for an economic system based on building relationships and concern for providing viable work. After the civil war in El Salvador many workers lost there jobs, but even more people lost their land and there homes. “The recovery has not been characterized by a return to the growth pattern of the 1970s. Agriculture has lagged the other sectors, and agricultural exports-led by coffee, cotton, and sugar in the 1970s-have fared even worse.” (Ricardo Hausmann, Dani Rodrik, José Miguel Benavente, Francisco Rodríguez Pp 51) At that time the coffee industry in El Salvador was mostly operated by wealthy land owners. To relieve some of the laborers and farmers the government developed a reform, granting some of the coffee field land and jobs to some of the unemployed laborers. “Historians have rarely examined or utilized documents generated by family-owned enterprises, leaving open a wide field of possibilities for future work. It would be particularly useful to explore the history of prominent enterprises from different regions, especially their use of land and labor and their place in larger agrarian patterns. Such topics are important for the export-oriented coffee producers and for the older, more diversified grain and cattle farms predominating in many parts of the country.” (Aldo Pp 160)
Lindo-Fuentes, Héctor (1990), “A land of coffee planters,” Weak Foundations: The Economy of El Salvador in the Nineteenth Century, Berkeley University of California Press.
Murray, D. L., Raynolds, L. T., Taylor, P. L. (2006), “The Future of Fair Trade Coffee: Dilemmas Facing Latin America's Small-Scale Producers”, Development in Practice, Volume (Issue): 16(2) pp. 179-192
Moodie, Ellen (2006), “Microbus Crashes and Coca-Cola Cash: The Value of Death in ‘Free-Market' El Salvador”, American Ethnologist, Vol. 33, No. 1, pp. 63-80
Ricardo Hausmann, Dani Rodrik, José Miguel Benavente, Francisco Rodríguez (2005), “Self-Discovery in a Development Strategy for El Salvador”, Economía, Vol. 6, No. 1, pp. 43-101
Aldo A. Lauria-Santiago (1995), “Historical Research and Sources on El Salvador”, Latin American Research Review, Vol. 30, No. 2, pp. 151-176