Before fair-trade, people were working most of the day under the scorching heat with little water just to sell their product, cocoa, to a company in another country that were going to rip them off. When the companies weighed the cocoa, the scales were not accurate and the farmers got less money than the product was worth. For example, When a farmer weighed four bags, it only came up with the price for two. This way the companies could make more profit.
This left the farmer with hardly any money. This left the country with hardly any money. This meant that the country had to borrow money from another, such as America. With this money, they started to build up their economy. But then they ran out of money. This left them in debt, with less money than they had in the first place. They then have to borrow more money to get them out of debt. This continues and the country's debt rises and rises meaning it cannot develop. This is called a “debt trap”.
After a while, some big charities, including Oxfam put together a scheme to help people in third world countries. They called it fair-trade. The idea of this was to help the producers get a better deal for their products. For example, the farmers would get the price of four bags for four bags. Also, the pay is higher which means that the producer gets a lot more money which means that the economy can move forwards. A big fair-trade company in Ghana is “Kuappa Kookoo”. The people working for Kuappa Kookoo get paid a lot more than another company from a different company.
With the money raised from the new fair-trade scheme, the people of Ghana have enough money to buy a water spring. Normally, the people have to walk up to four miles just to get to a water supply. With the spring, the children have enough energy and time to go to school which means that they can be educated and grow up to get a well-paid job. This will bring more money into the economy and the economy will grow turning Ghana from a LEDC to a MEDC.
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