Fair Pricing Initiatives
Fair price initiatives may help bring about more equitable trade – but only if very carefully supervised
Fishers can negotiate better prices by not fishing when the price is too low. This requires a high degree of organization and coordination in order to obtain a benefit, and the community must bear the stress of a reduced income. If the community cannot bear the stress of reduced income for long enough, their negotiation tactic will fail and they will have to accept the buyers' price.
In our model of the Mindoro tuna fishery, reducing fishing leads to economic stress and the resulting price increase is insufficient compensation. One reason for this failure is that middlemen's profits margins are already low. When fishers demand higher prices, middlemen become unprofitable and lose any incentive to trade. Fishers are left without access to export markets.
Price negotiation is much more likely to succeed if fishers and middlemen cooperate. Stocks improve and a fairer rent capture distribution is obtained. As with other scenarios, increasing numbers of fishers may absorb any positive results.