The Institutional Economics of Green Production : A Case Study of Fair-Trade on Traditional Shan-Tee Production at Yen Bai, Vietnam

The paper examines how a new informal institutions - 'Fair-Trade' – the new trend of production and trade that businesses, producers and farmers around the world participating into, apply in practice of agricultural production in Vietnam for the reality of CSR business and green economy. By reviewing its principles and practices, we demonstrate that Fair-Trade is the power of or more precisely the influence of 'soft power' of the informal institutions which supplement the law and provisions of the government in developing countries to overcome the failures of Free-Trade and to promote green/sustainable economic development. We use the case study of Organic Shan Tee - Van Chan (within 4 communes of Yen Bai provinces) to provide an overview of the status of Fair-trade participation as well as its benefits that people earn in the northern provinces of Vietnam. We found that although strong commitment now involved in Fair-trade among regional cooperatives and people's participation but there are still some problem of collective action and market inefficiency that create obstacles for their business. Thus the paper boldly proposes a number of policy and practical recommendations to help organic cooperative Shan Tee - Van Chan (Yen Bai) in particular and all agricultural sector of Vietnam generally easy to participate into Fair-Trade as well as promote 'maximum benefits' that Fair- trade offers