Chase, Craig A.

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Chase, Craig

Digital Repository @ Iowa State University (ISU)

. . . and justice for allThe U.S. Department of Agriculture (USDA) prohibits dis-crimination in all its programs and activities on the basis of race, color, national origin, gender, religion, age, disability, political beliefs, sexual orientation, and marital or family status. (Not all prohibited bases apply to all programs.) Many materials can be made available in alternative formats for ADA clients. To file a complaint of discrimination, write Permission to copyPermission is given to reprint ISU Extension materials contained in this publication via copy machine or other copy technology, so long as the source (Ag Decision Maker Iowa State University Extension ) is clearly iden-tifiable and the appropriate author is properly credited.USDA, Office of Civil Rights, Room 326-W, Whitten Build-ing, 14th and Independence Avenue, SW, Washington, DC 20250-9410 or call 202-720-5964.Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U.S. Department of Agriculture. Jack M. Payne, director, Cooperative Extension Service, Iowa State University of Science and Technol-ogy, Ames, Iowa. 6	 	 August 2007Updates, continued from page 1Internet UpdatesThe following updates have been added to www.extension.iastate.edu/agdm.Grain Storage Alternatives: An Economic Comparison – A2-35Condominium Grain Storage – A2-36Leasing Arrangements and Self-employment (Social Security) Tax  – C2-41Managerial Costs  – C5-209Opportunity Costs  – C5-210Product Life Cycle  – C5-211In our economics classes we are taught that in a capitalistic or free market so-ciety, two parties voluntarily exchange or trade commodities or services.  For example, when we buy a cup of coffee we receive the cup of coffee for a set price.  We don’t often think about what happens to the money we gave to the retailer and how that money goes back to the original provider of the commodity; in this case the coffee grower.  When people become more aware of how profits are divided, they begin to think about things such as “fair trade” and “fair wages” to those providing the original commodity and the pro-cesses that occur between the original production and the final consumption.“Fair trade” coffee has been around for awhile and the concept of domestic fair trade is beginning to become more noticed and talked about.  So what is needed to have domestic fair trade?  First and foremost, the agreed upon exchange price has to cover not only the cost of production and marketing to the original grower, but also a “fair” return to his/her land, labor, and management.  It is up to each individual grower to determine what “fair” means based on their particular monetary and non-monetary goals.  Regardless of goals, transparency is critical to the “fair” pricing dialogue that needs to take place between the buyer and seller.How do we achieve transparency?  The first thing that needs to be done is the grower has to know how much it costs him/her to produce and market the product for sale.  Secondly, all parties need to be transparent in the dialogue.  The grower has to share production and mar-keting costs with the buyer when discussing price.  The informed grower will be able to state a price that cov-ers not only costs, but includes the economic returns needed to reach the established goals.In a Sustainable Agriculture Research and Education funded project, four Iowa Community Supported Agri-culture businesses tracked what they provided in their weekly share boxes and “valued” those products by using local grocery store prices.  The weekly valuations occurred for 20 weeks and a final evaluation was de-termined for the share box subscription.  This informa-tion can be used to develop a competition-based price comparison.  The next step for the growers would be to add premiums to the base price for attributes such as product quality, organically-produced, home-deliv-ery, and any other product differentiation between the grocery store and share box products (the publication detailing the study will be out later this year).  But how high do the premiums need to be?  Again, the growers need to determine the cost of producing and marketing their share boxes and then add a “fair” return.  Once costs are known, then the growers can share information with their share box membership.  If the consumers of the share boxes value the local food (i.e., their receipt of the exchange), then they will be willing to trade their dollars for local food at a “fair” price.Domestic fair tradeby Craig A Chase, extension farm management field specialist, 319- 882-4275, cchase@iastate.edu

Domestic fair trade

https://lib.dr.iastate.edu/cgi/viewcontent.cgi?article=1278&amp;context=agdm

Domestic fair trade

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