Fair Trade Isn’t Fair

Fair Trade Isn’t Fair

by Jason Haeger


Fair Trade image

Source: http://www.nationalpost.com/news/Fair+trade+coffee/4782606/story.html

I’ve stated it before, and now it’s been stated again in an avenue that gets more views than this Coffee Company blog.

Fair-trade coffee fix
Lawrence Solomon, National Post

We highly recommend reading this piece if you have ever purchased Fair Trade coffee because it was certified Fair Trade.  It may have been next to another non Fair Trade coffee on a shelf, or maybe you sought it out specifically for ethical reasons.  Whatever the case, you owe it to yourself to know the truth.

In this article, Mr. Solomon says some things that are pretty well understood in the specialty coffee industry, but not so well known by the consuming public.  Here are a few highlights:

That fair-trade cup of coffee we savour may not only fail to ease the lot of poor farmers, it may actually help to impoverish them, according to a study out recently from Germany’s University of Hohenheim.

 

The fair-trade business is filled with contradictions.

For starters, it discriminates against the very poorest of the world’s coffee farmers, most of whom are African, by requiring them to pay high certification fees.

 

Their coffee is organic by default, but because the farmers can’t provide the fees that certification agencies demand to fly down and check on their operations, the farmers lose out on the premium prices that can be fetched by certified coffee

 

In some Third World societies, farmers readily accept the compromises of communal enterprise. In others, they balk. In patriarchal African societies, for example, the small coffee farm is the family business, its management a source of pride to the male head of the household. Joining a co-operative, and being told when and what and how to plant entails loss of dignity.

 

Some believe that certified coffee is superior in some way. But it is not always so. The small-scale farms whose local ecologies produce distinctive, niche coffee beans can’t operate on a scale that would justify official certification.

 

And in this well-intentioned pricefixing game, the fair-trade farmer is the pawn and the joke is on the customer.

It’s worth reading all the way through.  He cites some experiential examples from his own company, and there is a study cited (and quoted) within the article that gets into more specifics than I chose to paraphrase here.

Again, why don’t we sell Fair Trade coffee?  While some may be Fair Trade from time to time, we will never buy a coffee due to certification alone.  We will always buy coffees that are strictly ethically responsible on a social and/or environmental level.  It a cornerstone of our business model and a cause we firmly believe in.

 

 Blog, Business, Ethics

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 2 Comments

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2 Responses to Fair Trade Isn’t Fair

  1. Pingback: Maybe we should have Fair Trade Offshore Oil #rsrh | Maley's Energy Blog

  2. Fairtrade
    Canada response to Lawrence Solomon’s National Post story “Fair-trade coffee
    fix”
    Fairtrade Canada http://www.fairtrade.ca

    Fairtrade aims to offer producers a better deal and
    improved terms of trade. We are constantly working to deepen Fairtrade’s impact
    on producers and we welcome rigorous research and healthy debate around these
    issues. Lawrence Solomon’s criticism of the system in his May 14th
    article “Fair-trade coffee fix”, however, is highly flawed.

    Firstly, Mr. Solomon claims that a recent study in northern
    Nicaragua indicates that Fairtrade coffee may help to impoverish farmers. What
    he neglects to mention is that the Fairtrade producers studied received higher
    farm-gate prices than conventional producers and that significant production losses
    (unrelated to Fairtrade) may have accounted for revenue loss. While the study’s
    findings may highlight the need for further research, Mr. Solomon‘s suggestion
    that these results are generalizable is highly flawed, given that the authors
    conclude that the study results cannot be applied to regions beyond the study
    area.

    Secondly, Mr. Solomon purports that Fairtrade
    discriminates against the poorest of the world’s coffee farmers, many of whom
    are in Africa, through high certification fees. While it does cost money to
    uphold the system’s rigorous certification standards, these costs are split
    amongst the hundreds or thousands of members that belong to the co-operative.
    Fairtrade International offers
    funding for impoverished producers to meet up to 75% of the cost for poorest
    producers through its Producer Certification Fund. In addition, according
    to Fairtrade International’s 2008 figures, 60% of Fairtrade individual farmers
    and workers are, in fact, based in Africa.

    Thirdly, Mr. Solomon again criticizes the Fairtrade
    certification system as being “lax and almost impossible to police.” FLO-Cert,
    an independent organization that conducts rigorous producer audits, ensures
    that relevant social and environmental standards are met and that producers
    receive the Fairtrade guaranteed price and premium. FLO-Cert is ISO 65
    certified, and ISO 65 is the leading, internationally recognized quality norm
    for bodies operating a product certification system.

    Finally, there is indeed a reason why many Fairtrade
    merchants refer to the many additional benefits of Fairtrade: Fairtrade is
    about much more than price.

    Beyond a minimum floor price that protects coffee
    producers from the volatility of world markets, organizations receive an
    additional sum of money called the Fairtrade premium. This money goes into a
    communal fund for workers and farmers to use to improve their social, economic
    and environmental conditions. Smallholder producers, as landowners who choose
    to join democratically-owned co-operatives, are in the best position to
    determine how to meet their own needs. As such, these individuals determine how
    the premium will be spent, investing in, for example, education and healthcare,
    farm improvements to increase yield and quality, or processing facilities to
    increase income. In 2009 alone, the Fairtrade system returned €53 Million to
    producers in Fairtrade premiums.

    And there’s much more to Fair Trade, such as access to
    credit, long term contracts, transparency and accountability, the prohibition
    of forced and child labour, gender equity and environmental sustainability.
    Needless to say, Mr. Solomon is wrong in saying that consumers have something
    to feel guilty about. Globally, consumers spent €3.4 Billion on Fairtrade
    products in 2009, contributing to a market-based system that benefits more than
    1.2 million farmers, workers and their families, and recently joined in
    celebrating Fair Trade Fortnight and World Fair Trade Day across Canada. We’d
    call that something to feel great about.
     

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