This one’s a bit off-topic (and long), but I felt like getting it online. It’s a piece summarising the arguments against Fairtrade food, hopefully not from anything approaching a “free-market fundamentalist” perspective. It was first published in the Oxford Forum, as was a response by the Fairtrade Foundation.
Of course, it’s all just one view - the other side of the argument can be found here, here, here or here (the last one is very web 2.0) . But, if you’re interested in why Fairtrade mightn’t be the salvation of the world’s poor, please do read on.
I don’t like buying Fairtrade food: it’s a matter of conscience. This isn’t because I don’t care about the plight of third world farmers. It’s because I do. I also care about third world mechanics, housewives, children and factory workers – all of whom are losing out because of Fairtrade. Not just Fairtrade, of course, but as the movement is becoming ever more pervasive ($1.1 billion worth of worldwide sales last year), ignoring it is no longer an option. So I’m going to try to persuade you to boycott Fairtrade too.
The Fairtrade movement has been immensely successful. Having grown and developed as a social movement since the 1960s, the international Fairtrade mark as we know it now was born in 2002. Since then, its growth has been huge – sales have grown tenfold in the UK between 1998 and 2005. There are over two thousand Fairtrade certified products on sale in the UK, and cafes are proudly boast that they sell only Fairtrade coffee and tea. I hope you will soon share my chagrin at this fact.
Fairtrade, as I’m sure you know, guarantees a minimum price, above the market level, to farmers. Given that coffee, by far the most common fairly-traded commodity, has such a low market price (it can be as little as 50 cents per kilo), this seems like it can only be a good idea. But many economists will tell you different. The problem is coffee grows almost everywhere. Huge swathes of the earth’s surface can grow the stuff, including many of the planet’s poorer countries.
This means that as and when the price of coffee increases, and coffee farming looks attractive compared to other jobs (if coffee farming is more profitable than cocoa farming, I may switch crops), more people can and will grow coffee. This makes the price drop again, as we’re faced with potentially massive over-supply. Coffee farmers won’t be rich until almost everyone else is.
Furthermore, let’s imagine you’re a car mechanic in Guatemala, earning $100 per week. You trained as a mechanic because the $100 wage was much better than the $60 you’d make as a farmer. What happens if I had come along and offered you $120 to farm? You might well never have re-trained. But in the first case you were earning your own living in a useful trade. Now you are supported by my charity, being over-paid for work worth only $60 to the market – and no-one gets their car fixed. A movement like Fairtrade keeps the third world reliant on western goodwill.
It’s not even a particularly good way to give: profiteering quite certainly occurs on the way. Fairtrade products are significantly marked up over their “unfair” counterparts. Indeed, it’s often the case that less than 10% of markup actually gets back to the producers: if I pay a 10p premium, only 1p of that gets to the farmer. I feel like I’m helping much more than I am.
There are more sound economic arguments about why Fairtrade is undesirable. It’s possible that as Fairtrade products become more common, it could actually cause the price of non-Fairtrade equivalents to drop: helping some in the third world at the expense of others, which would be a truly tragic situation. But there is a lot of scepticism around these issues, and it is seen by many campaigners as an ideologically-driven right wing attack on the movement.
So instead I will come to my real gripe with Fairtrade. It’s just not enough. Even if you believe Fairtrade is benefiting farmers and their families, it is making their previously intolerable lives only fractionally better. Good, committed activists, who once would clamour for political and economic change, instead promote Fairtrade products that mean pennies a week for the beneficiaries. This is a tragic waste of activism, drive and effort, and it is costing the third world dear.
Real change does not come about through what we buy, it comes through what we do. Could any of history’s real struggles have been won through consumerism? Would we have freed the slaves by buying wristbands? Could the civil rights movement been won by buying “black-friendly” products? Would we have lifted apartheid if boycotts hadn’t been matched by heroic worldwide direct action? I’m sure I’m not the only one who has my doubts.
There are real, potentially painful but eminently possible lines of action we can and should take to try to lift the shameful conditions in which too many of the world’s population lives. Investment in infrastructure, education and basic healthcare is sorely needed. The immense corruption which afflicts too many countries must, somehow, be dealt with.
Agricultural subsidies must be dealt with: it is unforgivable that, for example, we subsidise European cows to the sum of $2 per cow every day. This is not only a horrendous waste of money, but it allows European farmers to undercut their international competitors. We keep our (often immensely wealthy) farmers in business at the expense of their third world competitors.
Agricultural subsidies, though, lack the charm and simplicity of Fairtrade. Saving the world by paying more for your shopping is simple, seductive and we can understand how it works. Reforming agricultural subsidies is complex and painful – I don’t deny that it would result in many UK and EU farmers going out of business. But why are we willing to give more charity to them than we ever would to the starving? When Burberry announce they are closing a factory we do not volunteer to subsidise their output. So why subsidise a farmer?
The real solutions to these global issues are complex, and have consequences that will affect us in the west. Ultimately, we could all benefit from appropriate reforms and actions, but it would be folly to suggest these actions could be simple or painless. And this is ultimately why I so vehemently detest Fairtrade. I cannot help but feel it is far more effective at salving our consciences when it comes to the problems of the world than it is at solving them: “I’ve done my bit to help the third world – haven’t you seen the contents of my kitchen cupboards? What more do you want?”
This is an unfair charge to level at the real activists who push Fairtrade. I’ve met, and argued with, many of them. They are passionate and committed to finding solutions for third world poverty. However, this focus on Fairtrade misplaces their efforts, and diverts their attention away from pushing for real change. I am not naïve about such reforms: they would not be simple to achieve, but they are far from impossible. This is far from such pipe dreams as nuclear disarmament, or a Liberal Democrat general election win. But as long as the little attention most of us are willing to give to the third world is focussed on Fairtrade, real change is impossible.
That, such as it is, is the reason for my objection to the Fairtrade movement. It has nothing to do with free market fundamentalism, or a lack of sympathy for its motives: doing the wrong thing for the right reasons is still doing the wrong thing. As I am now forced to buy the wretched products when I go to my favourite café, I have resorted to other means of protest.
And so I urge you: next time you’re at the coffee aisle and your hand hovers over the Fairtrade coffee, step to the right a little and grab the Nescafe – if you can bear the taste, that is. Then sign up to Oxfam, research the issue a little, and write to your MP. You’ll not only help save the world – you’ll save yourself a few pence, too.