PRICE EVALUATION OF ORANGE, UNDER THE FAIR TRADE SYSTEM IN MEXICO

Abstract

Orange production in the Totonacapan region of the state of Veracruz it is one of the main economic sources in the region and throughout the state. However, the downward movements in prices and intermediary have led producers to seek new market insertion alternatives such as the fair trade and organic production. The need of producers to have more elements of trial for to decision making regarding the best alternative motivated the present study. Therefore, the objectives of the same is to assess the minimum price paid out in the market farm for fair trade with regard to the cost of orange production from four organizations registered under this model. Additionally, contrast results achieved whit a group of producers dedicated to the organic production. In both cases it was used the methodology of the Fairtrade Guide to Sustainable Production Costs (COSP). The indicator shows that fair trade organizations are profitable as long as they have an average profit margin that ranks from 20% to 34% of the cost their production per hectare. The profit margin of the organization of organic orange producers is higher than fair trade organizations with a profitability 158% considering of the cost its production per hectare. However, the producers should regard others factors in matter of commercialization, organization and social profit prevenient to decision making.