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The Forum > General Discussion > The practical/moral implication of our chocky bar

The practical/moral implication of our chocky bar

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Dear Fractelle,

As always you're right on the money ...
I don't think anything could have swayed the ANZ!
Shocking move, and I really feel sorry for their employees.

Dear examinator,

I went to sleep last night dreaming of your neighbour
from Hong Kong and his gong! So I know this is off-subject
as far as your thread is concerned - and I apologise in
advance but I thought it may put a smile on everyone's
faces on this Sunday Morning. Here goes:

The rhythm of the gong
Does not appeal to many.
But it's music to my ears,
I love its beat, it's steady.

I like to move in motion,
To a slow and rhythmic beat.
However, it's the guy who beats it,
That for me, turns up the heat!

Keep smiling.
Posted by Foxy, Sunday, 15 March 2009 10:57:24 AM
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Fractelle, All
Call me idealistic but we do have to do something on all counts and we need to start now.
From a solution perspective to me the best place to start is where the control and implementation is easiest.
In the case where there is a near cartel i.e. the cocoa market could agree to pay an equitable price for a number of years.
From a self interest perspective this could easily make pr EXCLUSIVE capital.
i.e. “WE saw something that was wrong and did something about it….now the families have all the things we take for granted then run the company names. So when you eat your next ‘el Grosso’ Chocky bar you are helping children in the third world. This would give the peasants time/security to diversify. The Gates foundation et al could provide the support for this diversification. Eventually the floor price could be floated. Rather than as now all that will happen is confidence bubble… more cocoa …leading to lower prices and later greater misery for the t farmer.

Once this is seen to work then other products could be singled out for simular treatment.

Capitalism as it is practiced is based on ever higher expectation of more profits the methode d’jure (the easiest/cheapest the most short sighted [neo liberalism]) means is lesser inputs and production….lesser costing materials, lesser staff et al. Even our choices are being limited by Prado effect on steroids. Go to and shopping centres and what do you see…the chains stores who focus on what they can make the biggest profit on. Consider then 3rd world needs/diseases etc that are ignored because they’re not profitable.

I accept that we can’t attack everything at one i.e. ANZ simply devaluing inputs and study. 4 year on hecs for what a wage of $25k (local Indian grad) the cause of their brain drain.

We do have to start some where we NEED a new perspective to control the tool (Capitalism) as it was intended …help PEOPLE.
We need solutions. This is MY first step a strategy. what’s wrong with it?
Posted by examinator, Sunday, 15 March 2009 3:42:18 PM
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Examinator, I am curious about how you think a floor price on cocoa or coffee will really help. The problem with current prices of these products is supply and demand. There is more supply than there is demand. I remember a time, a couple of decades or more ago, when coffee supply was greatly reduced due to climatic events and wars. Prices climbed steeply until new supply came on line. Then there was a period of oversupply and prices declined.

Australia I seemed to remember once had a floor price for wool did it not. What was the outcome of that? If I remember correctly, it was a wool mountain of nearly 5 million bales that the Australian Wool Corporation was unable to move. In the end, the Corporation had to stop buying wool and remove the floor price as this was sending the Board and ultimately growers broke. In the end it took over a decade and a half to get rid of the wool mountain.

A floor price guarantees inefficient producers a market, even if no one wants their product. Would it not be better to allow them to restructure into another product where demand exists rather than keeping them with the hope that their current enterprise might survive into the future?

Fiddling with markets is a dangerous pastime and needs to be done carefully or you risk disaster. The best thing that could currently happen to the worlds cocoa growers is for some of them to stop growing cocoa. That will reduce supply and increase prices.
Posted by Agronomist, Sunday, 15 March 2009 5:08:04 PM
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Agronomist,
Interesting reply I'll write an answer tomorrow gotta go.
Posted by examinator, Sunday, 15 March 2009 6:17:10 PM
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Agronomist has made the critical points, examinator, but there are just a couple I'd like to expand on.

>>This is MY first step a strategy. what’s wrong with it?<<

The only problem is that it will not work.

Some of the first exercises in practical economics relate to the laws of supply and demand.

While there is absolutely no reason why you cannot put a floor under a commodity's sale price, there is no commensurate compulsion for people to continue to buy at that level.

Demand falls, product either remains unsold or the price has to be reduced until it meets the level at which folk are comfortable.

The oil cartel manipulates the price of their product using another angle on the same laws.

OPEC mandates to its members that they will limit supply. Prices go up, because demand cannot be easily reduced. Industry essentially competes for the privilege of buying - the price is not really an issue; they need oil to stay alive.

Fewer people are addicted to chocolate (surprising as this may be so some people I know) than industry is addicted to oil. Hence, a reduction in supply will not increase as sharply as oil prices.

For greater detail on this - and to prove I'm not making it all up as a part of the capitalist conspiracy - check out the zillions of articles on the elasticity of supply and demand.

Keeping prices low will actually be the greatest assistance to the poorer farmers. Increased trade will eventually solve the problem for them, as their low prices start to take the bread from the mouths of more affluent cocoa producers.
Posted by Pericles, Sunday, 15 March 2009 7:01:38 PM
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I've come across two more websites that may be of
further interest:

"What Price Fair Trade?"

http://www.developments.org.uk/articles/what-price-fair-trade/

and

http://www.hillsidecoffee.ca/fairtrade.html

The sites back up the points Fractelle made in her
posts.
Posted by Foxy, Sunday, 15 March 2009 8:28:52 PM
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