Unfair on Fairtrade
Owen Barder spots Alex Singleton reading the FT on Fairtrade and passes on some of the bitterness.
It is possibly a shame that some of the Peruvian farmers are not being paid the minimum wage but the worker questioned had travelled halfway across the country to work in the farm and was pleased because he was paid 25% more than usual. Similarly worrying about imperfections in co-ops is worthwhile but would abandoning Fairtrade improve anything?
Both repeat the claim that Fairtrade coffee comes at a premium when it may only be a differentiator. Certainly the cost of the premium payment is small enough to be easily offset by reduced marketing costs.
I think that there are two possible real complaints.
Is there are significant difference between what people think they are getting and what they actually get? I would be happy with the difference reported in the original FT article even though it appears merely less exploitative. If Fairtrade takes off further there will be competition between rival schemes whch should ratchet things up.
A more subtle one is that most Fairtrade purchases are direct. That undermines the local coffee market superstructure of brokers and the rest, something that might contribute to Mr. Singleton’s observed problems. I find that harder to answer with conviction but my instinct is that farmers mostly don’t suffer and that the loss to the brokers is not enough to offset the gains by the farmers.
I still find it odd that what is an entirely market driven phenomenon should exercise free marketeers to such an extent.
Posted: September 13th, 2006 under Unsorted.
Comments: 5
Comments
Comment from AJE
Time: September 14, 2006, 9:18 am
I think it’s because free-marketeers are more concerned with the effects of action rather than the intentions.
Comment from Jack
Time: September 14, 2006, 1:33 pm
But where are the concerning effects? There are satisfied consumers, profitable companies and coffee growers with more in their pockets.
How can you be worried about effects without some intention in mind? What would the effects mean? I’m not sure what object there is that a free marketeer should be concerned about.
In any case free marketeers can only be indirectly concerned with effects in a kind of In the long run and overall it will turn out for the best, partly because its about letting people adapt and realising tacit knowledge and the wisdom of crowds and because we only know what is the best outcome through its appearance as the outcome of fair, just and right processes which we know to be those of the free market as defined by…. Anything more specific or direct and a free marketeer is on a loser.
Comment from AJE
Time: September 14, 2006, 2:14 pm
What if - in some cases - Fairtrade labourers are paid less than the minimum wage? What if non-certified Fairtrade coffee is being sold as Fairtrade coffee? What if Fairtrade coffee is being illegally planted in protected rainforest? (all in Saturday’s FT) What if individual farmers are being exploited by the leaders of the co-operatives? (Alex Singleton reports from Kenya) What if Fairtrade producers are just as bad as non-Fairtrade producers, but have effective PR machines that lie to us? (Today’s FT op-ed) What if Fairtrade organizations don’t boost prices, and merely generate rents for select producers? What if certification depends on arbitrary factors like where your farm is? (all here)
http://thefilter.blogs.com/thefilter/2006/09/fairtrade_im_co.html
Comment from Jack
Time: September 14, 2006, 4:53 pm
Are you actually worried about the minimum wage? The worker interviewed was quite happy and paid significantly more than elsewhere. I think this is a straw man.
The non-certified thing is possibly an issue depending upon what you think you are getting but the promise of, for example, Cafe direct is to pay a fair and guaranteed amount for coffee. I imagine that when a fair trade outfit finds it can sell more than it can grow it will buy some from the guy next door who also gets above a market rate but to a lesser degree. The only harm is if these things which are generally nice for coffee farmers are not good enough for consumers but I’m not sure their views are that specific.
Growing coffee in protected rainforests is not restricted to fairtrade growers nor is coffee the most destructive thing that could be grown in such a place. Moreover there is some chance that further down the line Fairtrade will provide effective guarantees that it is not grown there. Better coffee than coca.
Exploitation in cooperatives is not a good thing but is it worse than the alternative? What is the leverage? Membership of the cooperative is my guess.
If Fairtrade producers (do you mean growers or distributors?) are in some sense no better, they are also no worse. But in what sense? Why would you think that the little guys have a more powerful PR machine? In what sense are they lying?
Fairtrade guarantees higher prices in some circumstances for supplying farmers. They could conceivably be lying about that but even the FT article didn’t even begin to provide evidence that it did. Do you mean that it might not raise prices for other farmers too? Well you can’t have it both ways but you could be right on this angle and not the earlier one. How? Only really if Fairtrade didn’t grow and there was a failure of the strong supposition that raising prices for part of the market didn’t boost the whole thing. Even if that did happen, how would it be damage?
What is being certified is primarily the terms under which the coffee is bought from the farmer. If there are places without access to Fairtrade, why not start a new Fairtrade coffee business buying from those places? There isn’t a monopoly.
There is as I said in the previous post, possibly a case for misrepresentation but I think it is weak and there are many others that might be more important. Most advertising wouldn’t stand up to such demands.
I’m still not sure what you find so lamentable.
Personally I buy my coffee from here.
Comment from AJE
Time: September 15, 2006, 9:10 am
I’m not sure lamentable is the word - I’m just asking questions, and providing evidence why those questions are valid.
Fairtrade is painted as a solution, it seems we both agree that in some cases it creates new problems, and fails to alleviate some present ones
It’s not a silver bullet, doubts are valid, it’s therefore over-hyped.
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