FAIR TRADE: What’s the deal? Or how to grow guilt …
Thursday, April 16th, 2009When you visit your local coffee shop do you ask if the beans or tea are Fair Trade or Rainforest Alliance certified? The concept of goods coming directly from the farmer with a reduction in middle man activity and the farmer getting a fair price for their goods is an excellent case study in social justice – but what does this mean in practice? All the major supermarkets now sell Fair Trade goods, and in particular, tea and coffee are good examples. There are now well over 1,500 different Fair Trade products on sale in the UK; the majority are being sold at a premium price, but where are the profits going?
The supporters of Fair Trade point to a consistent (fair) market price for coffee and tea that allows producers to produce more or diversify into other crops. In addition, Fair Trade supports social projects in the farming areas to improve conditions and provide support to growers and workers.
Critics of Fair Trade are quick to point out that the premium price paid for this coffee and tea is nothing more than a subsidy keeping the price artificially high. They argue that this goes against the law of supply and demand and produces a market where there is over-production as more farmers will be attracted to grow produce that they can sell at the inflated price.
As far as Fair Trade goods in supermarkets and coffee shops are concerned is this just a case of ‘greenwashing’ so that these companies can feel good about the effort they are making toward helping the downtrodden farmer while still making a good profit, or are they not so cynical. Again the only way to determine the truth is to ask questions. So if you want to buy Fair Trade do ask what proportion of the profits goes to the grower of the product. If the answer is 5p out of every £2.50 jar of instant coffee then it is likely that Fair Trade is not worth the effort and you should buy the normal coffee at a lower price and then give a sum you feel appropriate to a development charity.
