Why Buying Fair Trade hurts the World’s Most poor
I’ll admit it. Every time I bought my Peoples Fair Trade Coffee, I felt pretty awesome. I would read the emotional anecdote about the farmer whom I was helping with my purchase and enjoy the warmth from the charity I had just committed. Fair trade (as opposed to everything else which is unfair) was the first born of the ethical consumer movement. You pay slightly more for your coffee and the farmers who grew it for you will be paid more in the process. Sounds lovely. It isn’t.
Remember how great you felt when you spent an extra two dollars on your pack of coffee in order to save the world and help the poor farmer. Turns out you were really just helping your cropped-jeans, plaid shirted, smiling barista. A study published in the Journal of Business Research found that only 2 per cent of the premium price is actually going back to the producers. Most goes to your seller who can hike up the price because it is ‘Fair Trade’. Fair Trade is a multinational built upon a lie. It misleads. It deceives. It targets your guilt and compassion and exploits it, no different than it does to its workers.
Fair trade goods hurt the poorest members of our global community. A paradox? Unfortunately not.
Mexico is the biggest producer of fair trade coffee in the world, dominating, with over a fifth of the market share. Mexico is not a poor country. They have issues, but their poverty is incomparable to countries such as Ethiopia that sell very little fair trade coffee. So we should realize first that the petty wage increases we are trying to make are going to a nice Mexican family who probably get to eat Old El Paso and not to your run of the mill World Vision Poster Child.
So who cares, you rightly ask, I am still helping someone. Whoever scolded someone for only helping a poor person? The problem is that your purchase of Fair Trade impacts on the many poorer non-fair trade coffee producers around the world.
Every time you buy your delicious Fair Trade Beans, you are obviously not buying non-fair trade. Fair Trade has a monopoly over the ethical consumer. That ‘oh-so-selfless’ shopper will only buy fair trade and thus no longer buys from the far poorer Ethiopian who does not work on a fair trade collective: because he works under worse conditions the ethical consumer considers the best response is to stop giving him money and trading with him. You are giving to those who already have a nicer job and cementing the despotic poverty of those who don’t. For when the non fair trade employer’s profits goes down, the buck stops with his workers.
Moreover, the producers of non-fair trade coffee, in order to compete with their more ethical cousins, have to keep their prices down, lower than the fair trade minimum price. Economist Tyler Cowen calls this ‘The Exploitation Sector’. The owner of the farm needs to keep his beans cheap. He does this by wreaking havoc on the fickle lives of his workers: fewer breaks, worse pay, more lay offs, longer hours, poorer hygiene. The Fair Trade competitor creates that oppressor.
If that doesn’t convince you, you should look at how a farmer gets a Fair Trade Stamp. Hint: it’s not just by paying its workers $20/hour. A Bitter Aftertaste, a revealing documentary on Fair Trade, exposed that the Fair Trade organization discourages the use of fertilisers on farms. Farmers are left to employ someone to do weeding. Yet they can’t be full time workers. That’s another rule. Coffee farms must be no more than 12 acres in size and only employ part time workers. Obviously the idea is to share the benefits of work, yet all it means is that no one working on these farms has any assurance of income: of ability to feed and nurture their loved ones. And to be honest, I have no idea why the farms are restricted in size. Maybe it is just because small farms look nicer.
The Fair Trade Stamp halts development. It takes 5 farmers in Brazil to do with Coffee what it takes 500 in Guatemala. Brazilian farmers have been allowed to use machines rather than people to do their backbreaking work. This agrarian inequality will not change when farmers on fair trade farms are discouraged from mechanization and fertilizer. Fair Trade have romanticized the life of a rural farmer in West Africa. They are either blind or deliberately misleading. They want people to keep individually removing weeds just as they did in the old days. That is not an acceptable life in any part of the world.
Oh and the coffee should be organic too: of course.
It isn’t that fair trade can only ever be a force for evil cloaked in good. If it changed many of its features and everyone went fair trade, it could well be an all right way to do your bit. But as it stands, you are better off just buying the cheaper unfair trade chocolate (which, let’s be honest, is more delicious anyway) and then giving your savings to charity. It may fit with your bourgeoise, environmentalist, holier than thou image, but next time you want a soy decaf mocha in your Keep Cup, do the right thing, don’t buy fair trade. ▲