Is Fair Trade Fair?I have been involved in Fair Trade for well over a decade now and it hasn't always been a sugar-coated ride. I have come across individuals who are against Fair Trade, one of the arguments being that it can exclude groups who cannot afford to pay for the certification...rightly so...it can be expensive. Fair Trade may squeeze other avenues of ethical trading, but it is also trying to put a framework in place for providing standards. I do support other non-fairtrade identified groups. They still have a social mission of helping alleviate poverty, mostly through missions overseas and it is my personal choice to support them. Nobody said that fair trade was perfect, and it isn't, we still have a long way to go. However, it do believe we are getting there. Fair Trade is helping communities and families out of poverty, i have seen it with my own eyes. And it is a challenge!!I try and take a balanced view of fair trade, and in doing so would like to share this article with you written in February in a British newspaper. I will add more thoughts at the end of the article as i do agree with some points and disagree with others. Please bear in mind that this article refers mainly to Fair Trade coffee ..and is in the context of written in Britain and their own certification process. I will discuss more at the end.
The Poverty of Fair Trade Coffee''
Fairtrade purports to work within the market economy but its rise has been largely based on marketing subsidies and public-sector procurement," says Tom Clougherty, policy director of the Adam Smith Institute. Despite huge pressures on the public purse, local councils are squandering large sums becoming Fairtrade towns and cities, distributing posters and leaflets to nanny people into only buying Fairtrade.
Meanwhile, the Fairtrade Foundation has received over £1.5m from the Department for International Development. It wants more. In December, reminiscent of 1970s-style industrial policy, it called for £50m of development aid to be spent as "strategic investment" on Fairtrade.Fairtrade's supporters blame the plight of coffee farmers on world prices and ruthless multinational companies. But supporters ignore the real causes of poverty among growers. Farmers I interviewed in Kenya told me that the problems they face are not caused by global influences but their own government's interference. They are forced to use milling companies granted regional monopolies, who fleece them. They want to boost productivity by using fertiliser, but they cannot afford the inflated prices demanded by the government fertiliser monopoly. Imported tools and machinery would transform their output but are subject to punitive tariffs. Police roadblocks slow their goods and involve money exchanging hands.Brazil, conversely, pursued free-market reforms and the farmers have mechanised. This has enabled five people and a machine to enjoy the same output as 500 unaided farmers. Yet the Fairtrade Foundation, the lobby group behind the scheme in the UK, seems oblivious to this and admits it has no programmes to encourage the use of technology.
Even worse, it is giving counterproductive advice to farmers, encouraging them mix different crops in the same field, thereby cutting productivity and making future mechanisation more difficult.Despite Fairtrade's moral halo, there are other, more ethical forms of coffee available. Most Fairtrade coffee on sale in UK supermarkets and on the high street is roasted and packaged in Europe, principally in Belgium and Germany. This is unnecessary and retards development.
Farmers working for Costa Rica's Café Britt have been climbing the economic ladder by not just growing beans but by also doing all of the processing, roasting and packaging and branding themselves. Shipping unroasted green beans to Europe causes them to deteriorate, so not only is Café Britt doing far more to promote economic development than Fairtrade rivals, it is also creating better tasting coffee.But Café Britt is not welcome on the Fairtrade scheme. Most of Café Britt's farmers are self-employed small businesspeople who own the land they farm. This is wholly unacceptable to the rigid ideologues at FLO International, Fairtrade's international certifiers, who will only accredit the farmers if they give up their small business status and join together into a co-operative. "It's like outlawing private enterprise," says Dan Cox, former head of the Speciality Coffee Association of America.
Many African farmers, organised along tribal lines, are similarly excluded from the scheme. Other producers complain that accreditation is needlessly bureaucratic and costs five times as much as organic certifications.Café Britt accuses the Fairtrade scheme of failing to understand the cultural realities in countries like Costa Rica where many farmers simply do not want to become part of co-operatives. Unlike campaigners' romantic vision of developing country co-ops, the overwhelming evidence is that they are breeding grounds for corruption and abuse of workers. Co-operative leaders, who routinely get re-elected in fiddled votes, rake money from ordinary farmers, keeping them in the dark about their output's true worth.While true that certification requires an annual inspection (for a fee) these can range from simple visits to requests for paperwork by post. The scheme does not verify wages paid to labourers. Those co-operatives who run free elections are little better, with leaders often unwilling to make tough but necessary choices for fear of losing popularity with their voters. Moreover, an independent investigation into Peruvian Fartraide farms found breaches of Fairtrade rules, with many workers being paid less that that country's minimum wage and non-certified coffee being passed off as Fairtrade.Meanwhile, Fairtrade has the effect of encouraging relatively affluent, but not very efficient, producers to stay in the market. Being more affluent, they find it easier to jump the bureaucratic hurdles the scheme imposes.
Accordingly, Mexico is the largest single Fairtrade coffee producer, despite the country having free access to US markets and enjoying average wages eighteen times those of its coffee rival Ethiopia, which loses out as a result.Unfortunately, the juggernaut of Fairtrade marketing has been extremely damaging by crowding out other ethical approaches. While Café Britt's products are sold globally, its products have found competing in the UK very difficult. Its UK distributor, 100% Arabica, was recently forced out of business. Good African Coffee, a non-Fairtrade Ugandan firm that packages and brands its coffee in Uganda, has done better but has still only gained a very small part Britain's ethical coffee market.While high-street chains like Starbucks and Caffe Nero have encouraged consumers to favour higher-quality, speciality coffee, there is growing evidence that Fairtrade is damaging quality, too.
Fairtrade farmers typically sell in both Fairtrade and open markets. Because the price in the open market is solely determined by quality, they sell their better quality beans in that market, and then dump their poorer beans into the Fairtrade market, where they are guaranteed a good price regardless. Moreover, because co-operatives mix every farmer's beans together, farmers who improve quality receive the same payment as those who do not, which discourages improvements.
That's worth considering next time you pop out for a double espresso".
Written by Alex Singleton. Feb, 08.
Now my ten-cents worth! This discussion is not new to me, particularly in reference to coffee. There is somewhat a possible 'glut' of coffee being grown, whether fair trade, organic or not and those who grow high quality coffee are also being squeezed by the lesser quality as the beans are mixed together. This is a problem in terms of if there is plenty to go around then this may depress prices. Scarcity of resources tends to push up the price...look at oil! What many developing countries need to is to diversify and grow something else, this would enable them to increase food security and encourage environmental conservation by moving away from monoculture. There are possibly some larger companies that are not legitimately putting the interests of farmers first.
One comment to this article was from a Mr Devine who was once the Chief Executiveof the largest independent coffee and tea trader in the world in the early 1990's who claims "that many of these points are true. He states that the mega-growers also ship and sell their lower quality beans into the Fairtrade markets through brokers and receive the subsidized "charity price" from the "socially responsible" rather unquestioning public.
This is exactly what was meant to be avoided, and it is done in huge volumes. This type of illegal activity is almost impossible to police at the level where it occurs, and where supervision has been pursued it has either failed or been simply too expensive to maintain (especially when the bribes at the storage and market delivery locations are factored in). So what happens is that the small farmers end up competing directly with the mega-producers for "shelf-and-mouth" space, which is a losing battle and exactly the opposite of what was intended to occur".
It does raise a question, what will happen when fair trade does make it big, i.e. a larger percentage of world trade. Will the benefits be lost? I personally, despite the limitations of fair trade do honestly believe that it is helping farmers and artisans have a better quality of life in developing countries. For example, I sell clothing from Ghana, West Africa. I have personally met the women, discussed their challenges and successes. I know that Fair Trade works for them as for the women i met in South Africa weaving baskets. Fair Trade is not perfect, but it makes the consumer stop and think. It makes large companies stop and think. It provides an opportunity for coops and NGO's, farmers and teenage mothers to learn new skills. It educates consumers about the world in which we all live.
It may not be perfect but can you imagine a world without? I can't.
