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Last Updated: Wednesday, 7 March 2007, 11:58 GMT
How fair is Fairtrade?
Fairtrade coffee, from bean to cup

By Brendan O'Neill

The Fairtrade label is increasingly common. But while shoppers seem keen to pay a little over the odds for fair trade products, some observers question how effective it really is in helping developing world farmers.

Fair trade products are popping up everywhere.

Gone are the days when you had to trek to an off-the-beaten-track shop that smelt of hemp in order to buy a fair trade woolly jumper or bar of chocolate. Now you just need to visit the High Street.

Topshop, once a bastion of cheap and cheerful garments, sells fair trade tunics, bubble tops and racer-back vests. And Marks and Spencer works with more than 600 fair trade cotton farmers in the developing world, using their cotton to produce chinos (for men), jeans (for women), hooded tops (for the kids), and a host of other fair trade fashion items.

Bananas
Fair trade bananas are big sellers
Sainsbury's sells fair trade chocolate and coffee, and recently announced that the only bananas it will sell in future will come from fair trade producers.

There are more than 2,500 product lines in the UK that carry the Fairtrade mark. Last year we spent 290m on fair trade food, furniture and clothing - an increase of 46% on the previous year.

It is currently Fairtrade Fortnight, organised by the Fairtrade Foundation. Events at schools, colleges, universities and workplaces up and down the country consist of everything from makeovers (swap those ordinary store-bought clothes for fair trade threads) to food exchanges (bring along your favourite brand of tea, coffee or jam and swap it for a fair trade alternative).

The aim of fair trade is clear - to get a better deal for Third World farmers.

In order to win the Fairtrade tag, the application of which is monitored by Fairtrade Labelling Organisations International, companies have to pay farmers higher than the market price for their products. This means fair trade farmers are not at the mercy of the market's whims, and have extra money to invest in education for their children and other social needs.

Poverty trap

But not everyone is convinced that fair trade is a good idea.

Some critics claim that by focusing on achieving a fair price for poor farmers, the movement doesn't address issues of mechanisation and industrialisation - radical changes that might allow farmers in the developing world to stop doing back-breaking work and break out of the poverty cycle.

Worker on fair trade coffee farm in Uganda
Sorting coffee by hand
So how fair is fair trade? Is it about getting Third World farmers to accept their lot, or, at best, a little bit more than their lot?

Eileen Maybin, a spokeswoman for the Fairtrade Foundation, says it does help to improve farmers' lives.

"Fairtrade focuses on ensuring that farmers in developing countries receive an agreed and stable price for the crops they grow, as well as an additional Fairtrade premium to invest in social projects or business development programmes.

"Typically, farmers' groups decide to use the premium on education, healthcare and clean water supplies, or the repair of roads and bridges, and to strengthen their businesses, improve the quality of their crop or convert to organic production."

Ms Maybin says that those farmers involved in fair trading are happy with the results.

"The farmers and workers involved in Fairtrade always talk about how much they, their families and their communities benefit."

How can a few extra pennies a day from Fairtrade be celebrated as an outstanding achievement?
Steve Daley, of the Worldwrite charity
Yet others argue that fair trade can end up being a trap for farmers, tying them into a relationship of dependence with charity-minded shoppers in the West.

Madsen Pirie, of the right-leaning think-tank the Adam Smith Institute, says that in protecting the market for certain producers, the movement effectively makes farmers "prisoners to our market".

"They become dependent on us continuing to pay premium prices for their goods."

Many tens of thousands of people escaped poverty last year, most of them in India and China, but he says that was done through real market developments rather than small-scale fair trade deals. They were lifted out of poverty because they could sell their products on the open global market, rather than being sectioned off in the fair trade market.

Extra pennies

In the charity world, too, there are critical voices in the fair trade debate.

Steve Daley, who works with the education development charity Worldwrite, argues that fair trade's horizons are dangerously low.

Progresso cafe, opened in 2004
Oxfam has opened fair trade cafes
"How can a few extra pennies a day from Fairtrade be celebrated as an outstanding achievement for the poor?" he asks.

He cites a report from the Financial Times last September, which revealed that some fair trade coffee farmers in Peru were being paid 10 soles a day (about US$3) for working from 6am to 4.30pm. This is more than the conventional coffee farming wage of eight soles a day, but not much more.

Mr Daley is concerned that the fair trade movement is reshaping the debate about underdevelopment, so that the main concern today is with increasing farmers' wages by fairly small amounts rather than really transforming poor communities through development, modernisation, even industrialisation.

"Fairtrade seems to be rooted in a conviction that 'small is beautiful'," says Mr Daley, who argues that the movement does not focus enough on developing modern agricultural methods, which is "surely what farmers in the developing world need".

Mr Daley says that fair trade is more about "flattering Western shoppers" than transforming the lives of Third World farmers.

Self-sufficient

Justin Purser, the commodities manager for Trade Aid Importers in New Zealand, disagrees. He has witnessed some of the big changes fair trade can make.

"It is very common for fair trade coffee co-operatives to seek to build infrastructure which will cut down on the amount of labour required to process their coffee, and will also enable them to improve their coffee quality and, thereby, the higher prices they can command in the market."

He gives as an example Prodecoop, a coffee cooperative in Nicaragua that he has worked with.

"Prodecoop has grown, with the aid of a longer history of fair trade sales, to the size where it is now constructing wet mill facilities for its smaller member co-ops. And to help them along, Trade Aid is supplying an additional US$7,000 in funding this year."

Fair trade helps to "promote self-sufficiency" among Third World farmers, he says.


Add your comments on this story, using the form below.

Major, mechanized farming methods are what made these people reliant on the so-called First World to begin with. Coffee is a primary example. All coffee used to be shade-grown. Today most of it is produced in cleared fields. This clearing of the native environment eliminated the natural system of pest control, necessitating the use of chemical insecticides. It depletes the soil, meaning that you also end up using chemical fertilizers. Between the use of these chemicals and modern tilling techniques, the soil is utterly depleted and a layer of hardpan is created below it, eliminating drainage. The result? Environmental devastation. Anyone who claims that these people need to convert to our way of farming is really saying that they need to convert to our way of life (such as it is) because there is something wrong with theirs.
Martin Espinoza, Kelseyville, California

I thought that one of the key aspects about fair trade was not that they pay the farmer a little extra, but that they guarantee a reasonable price from one harvest to another. So when prices are high, the farmers get the benefit, but when prices are low the farmers have a safety net. This allows long-term planning in the farms and communities, which leads to self-determination. Yes it is a market intervention, but so are the European subsidies.
Martin, UK

How about paying a fair price to British farmers? A farmer will be paid about 19p a litre of milk produced. Also a recent study showed that the average annual income for a UK farmer was 12,700 - compare this to the national average of about 25,000. Fair trade inside UK please.
Rory, Shrewsbury

The critics are right: it is tokenism. It is charity by another name - solidarity. But without it happening, there are an estimated five million producers and their families in poor countries who would receive even less than they currently do. Surely, the way forward is to encourage fair trade as an interim measure that people can take here and now, in their everyday buying behaviour, whilst also spending time and energy informing themselves about the real causes of poverty in the world, and then lobbying for political change in the rich countries. It is not an either/or; it is not even a choice between an ethical and moral approach v a hard-headed approach based on tough political analysis. The world needs immediate action through fair trade AND medium to long-term action through political means - awareness-raising among your neighbours and lobbying of politicians and other decision-makers.
Neil Alldred, Ballymena, Northern Ireland

Having visited a fair trade vineyard last year in South Africa, and comparing it with a non-fair trade vineyard, I can say the few pence extra you pay is really a massive difference. The kids had a school to go to. Their houses were clean. The black farmers owned their own land - giving them both long term security, and justice after years of apartheid.
James, Belfast

Interesting. So fair trade is either: (a) bad, because it gives people extra money; or, (b) bad, because it doesn't give people enough extra money; or, (c) good. It would be even more interesting to see how Madsen Pirie and the Adam Smith Institute might explain how farmers who receive a fair trade premium are "prisoners to our market", while those who depend instead on the ups and downs of the so-called "free" market are somehow not. Until the Adam Smith Institute stop campaigning for things like lower taxes for rich people, then I'm afraid I can't take much they say seriously. I buy fair trade products because I don't like my coffee to leave a bitter aftertaste in my mouth. Yes, it is about saving my soul. But you can't save souls without saving bodies too.
Paul Carter, York, UK

By promoting fair trade all we are doing is providing an incentive for developing countries to continue production in the primary sector. How can this help a country in the long run? What we should be doing is erasing all forms of market interference. If African farmers can't produce enough crops to make a profit then too bad. They should be producing some other goods in which they have a greater comparative advantage. That's the beauty of a market system. Fair trade will only bring inefficiency.
Julio Koxh, Oxford

It's a shame that as soon as something like fair trade gets popular, people come out to argue that it's not all that great. Fair trade is fantastic - sure, there are even bigger things that need to be done, but buying fair trade products is something I personally can do every day to help, rather than saying its not worth it and go back to buying products which have been made cheap mainly through exploitation.
Dan Went, London

Modernisation and industrialisation has killed hedgerows and whole species in the UK and created the problem we call climate change. Most people in the Third World do not want to be Westernised, they just want a fair deal.
Phil, Nottingham

The only effects of industrialisation will be to increase expenses for farmers (who will be dependent on importing expensive machine parts, fuel and fertilisers), put other farm-workers out of work (as industrial methods are less labour-intensive) and reduce the price of the crops (as there will be greater surpluses).
Patrick, Leeds, UK

I've always been of the opinion that fair trade, along with ethical, green and organic serve the dual purpose of allowing supermarkets to charge premium prices for bog standard products, and allowing self-hating liberals to buy off a bit of their own guilt. They do little for the Third World and are at best a gesture which I refuse to buy into.
Matt Munro, Bristol, UK

Matt, so what do you buy into then? Of course fair trade, organic, green and ethical products aren't perfect and don't end world poverty and global warming, but you have to start somewhere don't you?
Veronica, Reading

Maybe it doesn't strike high enough for some people, but guaranteeing farmers higher, stable prices for their crops can be nothing but a good thing. If they choose to spend their money on community projects and a future for their children rather than mechanisation, who are we to argue?
Sam Chew, Loughborough, UK

Fair trade will inevitably distort markets leading to overproduction of coffee, cocoa, bananas etc in random areas. This will push down prices elsewhere, randomly impoverishing less favoured areas. Markets work - including the market for labour. Much of the charity business seems determined to maximise the number of people following a peasant lifestyle in developing economies. However peasant economies are always unpleasant to live and work in - subsistence or close to subsistence farming will always be economically risky and unpleasant to work within. Do you see many Westerners volunteering to become peasants? Of course not, so why perpetuate the lifestyle for others?
Kenneth, Edinburgh

Not everyone can be (or wants to be) involved in specific charities or projects. Are we in danger of creating a hierarchy of interventions where leaders of community-based projects are at the top, and chocolate buyers at the bottom? Isn't there room for all of these in the drive for greater fairness?
Diane Ashton, Rosyth, Fife

RE "They become dependent on us continuing to pay premium prices for their goods." Who else are they going to sell their produce to? Other poor developing countries just as desperate for foreign exchange? And how will they earn the foreign exchange to repay their own debt? Labour and agriculturally rich countries have little choice but to sell what they can produce now, with little or no investment in hi-tech mechanical aides that require first world resources to maintain.
Adrian Bright, Essex

Steve Daley says that some fair trade coffee farmers in Peru were being paid 10 soles a day (about US$3) for working from 6am to 4.30pm. This is more than the conventional coffee farming wage of eight soles a day, but not much more. The levels of pay may seem relatively low to us, but I'm sure a 25% pay rise would make most people smile.
Bernard Mason, Farnborough, UK

Supermarkets sell fair trade goods because they have larger profit margins. How much of the price difference between a normal product and a fair trade one actually go to the farmer? Usually a tiny percentage of it. If I thought the extra 50p I'm paying was going to the farmer rather than the supermarket, I'd buy a fair trade product. Until then, I'd prefer to donate money to charities who are honest about their admin and central costs, and about how much actually reaches the people its aimed at.
Sally, UK

I think it is more than worth it. I am from Mexico and a few pennies do make a big difference for these farmers who are not subsidised and I have known personally. In my country many people prefer to buy imported fruit, veg and even meat in Walmart than go to the local market and buy them from the immediate farmer.
Anahi, Aberdeen

I have supported fair trade since visiting Saint Lucia some years ago. It is because of support for the small local growers that they have been enabled to stand up against the large, mainland companies who flooded the market with cheap product. As long as there is a USP which sells then price is not the major buying criterion - that USP may be quality, or it may be something less tangible, like the consumer's good feeling that a sustainably "generous" payment is going to the grower. That is not charity, it is good marketing, but it can have the same positive results.
Simon Meeds, Bristol

If I were a poor farmer, I would definitely prefer fairer wages than being exploited and having no way out. If I were short sighted enough not to use any extra income to invest in my children's education and health, then it would be my fault if I remain dependent on "charity-minded shoppers in the West". The Fairtrade movement is at least giving me the choice to get me, my family and my community out of the poverty trap created by unfair trade policies.
Joanne Wong, Coventry

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