Is fairtrade a good thing?

May 2, 2006 3:51 PM

Is fairtrade a good thing? I've always been in favour of fair trade principles but...

with the likes of Nestlé jumping on the bandwagon recently, I'm starting to wonder how much good it really does. The truly needy farmers won't be able to afford certification in the first place - won't fairtrade just amplify their problems?

posted by Lanark to food & drink (11 comments total)

Take a look here for a libertarian economist's perspective on fair trade.

Here's the Google cache version, since MarginalRevolution seems to be down at the moment.
posted by matthewr at 3:59 PM on May 2, 2006

A lot of people who work in international development scoff at fair trade as a way for wealthy consumers in the developed world to feel good about themselves without making a difference. Consumer movements like this is not what ultimately creates change in the developing world, it's government actions. Instead of buying fairtrade products, it would be nice if wealthy consumers banded together to work on real trade issues, such as a new round of developmentally focused WTO talks, as Stiglitz promotes in his new book.

A number of these same critics do think that buying organic, however, could make a serious difference, but I know less about these issues.
posted by allen.spaulding at 3:59 PM on May 2, 2006

There's also the problem of what will happen to the middlemen cut out of the process, as they will lose their livelihood as well. This is especially notable in the coffee industry, which often has 5-7 superfluous middlemen between the growers and the distributors.
posted by charmston at 4:01 PM on May 2, 2006

I don't have enough information about Fair Trade economics to provide an opinion, but here's some other information that provides a pro-Fair Trade perspective and has links to Canadian-based co-operatives that participate in the Fair Trade movement.

http://www.ontario.coop/pages/index.php?main_id=273

In the interests of full disclosure, I work part-time for the organization I'm linking to there.

Aside on the quality issue: Planet Bean coffee (from a fair trade co-op) is really good coffee. However, IANACC (Coffee Connoisseur).
posted by Cyrie at 5:00 PM on May 2, 2006

Fair trade may also not be sustainable, since it puts pressure on farmers to produce greater yield to get the good price.
posted by Miko at 5:43 PM on May 2, 2006

Fair trade may also not be sustainable, since it puts pressure on farmers to produce greater yield to get the good price.

This is not my understanding, as fair trade certification usually requires farmes to produce less in order to get this price in order to prevent overproduction and all of the nasty externalities that produces.
posted by allen.spaulding at 7:11 PM on May 2, 2006

Does it?
posted by Miko at 9:21 PM on May 2, 2006

I'm not being sarcastic, AllenSpaulding. There's a coffee expert in my family, and I'm over-informed. People attribute a lot of magic to Fair Trade. It's only a pricing control system. The Fair Trade/Equal Exchange/Trans Fair literature commits only to saying "We encourage sustainable farming practices." In the third-world, glutted coffee economy, encouragement isn't enough.

There's nothing wrong with guaranteeing a fair price for coffee, inherently. It just doesn't go quite far enough. It's better than buying supermarket coffee bought at below market price from struggling markets in Viet Nam. But it's not some hallowed great good for the world. It's a simple, rude mechanism.
posted by Miko at 9:46 PM on May 2, 2006

Well, I'm not a fan of the system itself, but I was just arguing what it's hypothetical benefits are. My understanding was that by paying a higher price at the coutner, conumers in the developing world were ensuring farmers in the developing world did not have to overproduce in order to survive by getting higher wages per pound. It's sad to hear that fair trade fails at what it is supposed to do, which is limited at best.
posted by allen.spaulding at 9:59 PM on May 2, 2006

The authors of the Rebel Sell say things like fair trade (and buying organic and energy conservation) are useless -- "The only real solutions to environmental problems are ones that are compulsory for the entire population. "
Link to Q&A on their book here.

Naomi Klein also discusses the problems with trying to "consume ethically" (good summary in the "globalization FAQ" in the nologo website.
She writes: " consumer activism marginalizes those who are already most marginalized by the current economic system, even as it attempts to reform that system. Any such strategy is bound to fail and result in continued injustice."
posted by Badmichelle at 1:44 AM on May 3, 2006

Thanks everyone, I think the arguments are different for organic which has long term benefits for the soil, plant diversity and you get a fundamentally different end product, but fairtrade does seem to be a marketing gimmick with as many drawbacks as benefits.
posted by Lanark at 11:34 AM on May 3, 2006