A fair trade scheme encourages consumers in developed countries to buy food made by farming cooperatives in developing countries at a price above the one charged by commercial firms. Why could this be damaging to economic development?
- AIt will cause a worsening in the terms of trade of developing economies.
- BIt will reduce the amount of government aid provided to developing economies.
- CIt will reduce the prices subsistence farmers receive for their produce.
- DIt will slow the process of economic diversification in developing economies.