Fairtrade Coffee Battle

The British papers are having it out over fairtrade coffee this week:

Here’s the first volley, from Sean Poulter, writing for the Daily Mail: Unfair trade: Ethical food ‘is not lifting Third World farmers out of poverty’

Sales of its food have boomed on the back of promises that it delivers a fair price and decent working conditions to Third World farmers.

But Fairtrade products are failing to lift the farmers out of poverty, according to a study published today.

Less than 25 per cent of the price premium paid by shoppers for Fairtrade’s ‘ethical food’, such as coffee and chocolate, reaches the farmer, the controversial think-tank report suggests….

(The think-tank in question, by the way, is the free-market oriented Institute of Economic Affairs.)

And then, in response, there’s this piece by John Vidal, on the Guardian‘s “Poverty Matters” blog : A question for the fair trade critics: How much is human dignity worth?

Every self-respecting libertarian and free-market ideologue has to have a crack at fair trade. It’s like a rite of passage

But as someone who has visted fair trade projects in both African and Latin American countries, I can attest that it’s highly popular in the co-operatives it works with, and it makes a real difference to small farmers….

I’ve blogged recently about fairtrade coffee. See: Ethics and Economics (And Coffee Too), where I pointed out that, when you understand a bit about the economics of pricing, there’s reason for skepticism about the fairtrade notion. It’s not clear that schemes that involve consumers voluntarily paying extra can succeed promoting better outcomes overall, if that’s measured in terms of wealth. But Vidal’s piece in the Guardian rightly points out that such outcomes aren’t the only thing that matters, ethically. Justice and human dignity and treating people respectfully also matter.

Unfortunately, the Guardian piece isn’t as effective at making its point as it might be. It doesn’t, for example, tackle in any serious way the empirical claims made by the report, . While it’s true that promoting net welfare isn’t the only thing that matters, it certainly is an important factor. But instead, the piece mainly focuses on attacking the IEA and the people who wrote the report. It also wrongly implies that libertarians (a term it applies to the IEA) are against small enterprises and collectives, when in fact libertarians tend to love both (since they imply voluntary association with minimal government intervention).

I think that overall it’s still pretty unclear what consumers should think of fairtrade coffee. It’s not clear to me that, as a generalization, buying fairtrade is an effective way of making the world a better place. But I don’t think it’s necessarily a bad thing, unless of course it allows consumers to fool themselves into thinking they’ve helped more than they have.

About Chris MacDonald

I'm a philosopher who teaches at Ryerson University's Ted Rogers School of Management in Toronto, Canada. Most of my scholarly research is on business ethics and healthcare ethics.
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One Response to Fairtrade Coffee Battle

  1. dipa patel says:

    I am currently interning for The World Fair Trade Organisation Asia, and am based in Manila. During my time here i have had experience in both the office and out with small producers. Fair trade goes beyond just a fair wage, it helps greatly with social development, training, assisting, providing health care and schooling, ensuring a safe environment to work in, whilst also being as environmentally sound as possible in production of the final product.

    I have seen women empowered by the money they earn. I have seen women given the chance to leave the streets where they are selling their bodies just to make ends meet, to being trained and given the opportunity to earn a decent living in creating crafts/clothing/food products. Farmers helped to convert their crops from being chemical dependant to being 100% organic.

    I think it very unfair to say and state that the small farmer is the one paying “x” amount for certification when that is not the case. An organisation, which buys the raw materials of the smaller farmers will be the one applying for the citification. They will make an extra profit from having the “Fair Trade Labe” which in tern results in a higher profit which then goes towards helping the smaller farmers. To obtain certification, is a long process which require monitoring, inspections and talking to the small farmers. This is thorough, to ensure the organisation is complying to the set Fair Trade standards. If the organisation can not comply, help is given to them to make the conversion.

    As most or nearly all Fair Trade certifying bodies are dependant on donations, the cost of membership helps greatly in the greater development of Fair Trade around the world. It takes time to see effects, but already, people who have been out and witnessed first hand the benefits of Fair Trade will tell you it’s made a great difference to a lot of people’s lives for the better, and it continues to do so.

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