Right now, an entire celebration is underway, and it’s dedicated to your power. That’s right, yours. Did you know that with just one stroke of your wallet, you can help farmers build better futures for themselves, and improve working conditions around the world? As the Fairtrade fortnight website says, the world needs more like you. The movement salutes you, and so do I. I swear I’m not being sarcastic. No more than usual, anyway.
Every time I get back from the supermarket, I open my bag to a perplexing, yet also all-too-familiar, sight. Why did I get Fairtrade coffee again? I ask myself. I don’t remember picking this packet up; how did it get here?
Maybe it’s my instinctive liberal reflex, my deep-seated lefty guilt. I’ve long harboured doubts about Fairtrade, but the thought of those long-suffering, noble Guatemalan farmers makes my hand move of its own accord. Up it reaches, past those morally inferior forms of caffeination, snaking the Fairtrade option while my eyes and my brain are distracted. I can’t help it—what can I say; I’m just too good a person.
That Fairtrade is actually the subject of heated controversy worries me, pitting as it does two of my least favourite sides against one another. On one side are the smugsters who use progressiveness as a shield to mask their inherent awfulness. Maybe it’s the guy who uses “I’m a feminist” as a pickup line; maybe it’s the psychic or homeopath who uses mystical hippy bollocks to sell worthless crap to the gullible; maybe it’s the hairy Marxist who’s little more than a wilfully ignorant political thrillseeker. Everyone knows these types, and the idea that the Fairtrade movement might be full of them terrifies me. Have I been funding them for years?
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On the other side are, of course, the right-wing skeptics—the kind of chronically white, upper-middle class knobs who join thinktanks because they’re just not smart or thorough enough for academia. Everyone knows that “rightwing thinktank” is shorthand for “mouthpiece for big business with spurious attempt at intellectual integrity”. The idea that such types could be right about anything just pisses me off.
At its best, Fairtrade is the poster child for ethical consumerism and a shining example of private certification schemes—a pleasingly bipartisan form of market regulation that doesn’t involve the state. At its worst, it’s a corrupt, idiotic manifestation of First World supremacy. Time to decide.
The movement began in its current form in 1988, and currently consists of two organisations. Fairtrade International (FLO) is the brand’s governing body, setting Fairtrade standards and overseeing some 25 national and regional bodies. FLO-Cert is the inspection and certification body charged with upholding these standards.
Becoming a certified Fairtrade producer involves a number of eyebrow-raising propositions. First, there are the entrance requirements. The farm must be small (the requirements vary depending on the crop; coffee farms must be no more than 12 acres). It must be family-owned, with no permanent hired workers. It must be part of a Fairtrade certified collective—no independent farms allowed. It must not use genetically modified crops, and must restrict the use of agro-chemicals.
Then there’s the certification fee. For a cocoa farm in the Ivory Coast, the certification fee (paid upfront) would be about US$1,500. The initial audit also comes with a fee. Remaining certified will cost over $1,100 a year.
FLO’s income goes toward development projects and advice and support for the farmers. At least, some of it does. Studies have found that of the extra cost passed on to consumers in Fairtrade products, anywhere from five to 50 per cent of this goes to the growers.
The value of the advice FLO gives farmers is also suspect, informed as it is by FLO’s notably anti-modernist view on farming. In addition to the entrance requirements, FLO has no policy on mechanisation—crucial to agricultural development—and in some cases has actively discouraged it.
Fairtrade certification guarantees farmers a minimum price for their crops. But it only guarantees this price for crops that importers intend to sell under the Fairtrade banner. For instance, because the supply for Fairtrade coffee outstrips demand, growers can only sell about 20 per cent of their crops for the guaranteed price. (They don’t get a discount on their certification fee though—this is always calculated using the total crop.)
This also negatively impacts on quality. If growers are guaranteed a Fairtrade minimum price for only a portion of their produce and must sell the rest on the open market, they will sell only their lowest-quality produce at the minimum price to ensure they get the best possible price for the remainder. The upshot is that Fairtrade products tend to be of lower quality.
Global sales of Fairtrade products went from around US$250 million in 2000 to around $5.5 billion in 2011. Throughout much of the movement’s history, it has successfully turned impoverished farmers into well-informed participants in the global market. However, some commentators fear that the brand is close to outliving its purpose. With farmers able to undertake their own research and access real-time market information from their phones, having a First World NGO on hand to bridge the information gap—historically Fairtrade’s biggest and best contribution to the lives of producers—is becoming increasingly redundant.
But alongside the declining relevance of the Fairtrade brand has grown an increasingly aggressive and insidious marketing campaign. As Philip Booth of the Institute of Economic Affairs notes, the movement “pounces on critics with its well-oiled publicity machine, always responding with anecdotes”. When farmers in the developing world number in the millions, and many may be randomly enriched by the caprices of the global market, the uplifting tales of success that form Fairtrade’s currency are actually ten a penny.
To criticise a marketing campaign for its fuzzy claims and lack of accuracy might seem hopelessly naive. But whereas the claims of most commercial marketers are taken with a pinch of salt, Fairtrade’s halo disarms all but the most cynical. The idea that Fairtrade even “markets” itself is anathema to many of its proponents, who prefer to see the promotion of Fairtrade as a moral argument rather than something as base as advertising. But either way, a solid moral argument needs rigour. It would be interesting to find out how many of the movement’s loyal supporters, ever eager to shout down and boycott retailers who fail to fall in line, would fare if actually quizzed on the details. As ever, the conscientious objectors tend to be the most informed.*
Fairtrade also targets schools and universities in a way that would be inconceivably Orwellian were it a regular commercial brand. In many of the UK’s 1500 Fairtrade Schools, Fairtrade is taught during Religious Education classes. The idea of teaching ethical consumerism is great; what’s alarming is the adoption of one brand—trademarked logo and all—to represent the entire movement. If IT were Apple Studies, or home economics were An Introduction to Fonterra, the uproar would be loud and predictable.
So will I be participating in Fairtrade fortnight? No, probably not. Will my alien hand syndrome persist when I reach the Fairtrade coffee aisle? Hard to say. I love the idea of ethical consumerism and strongly believe in researching your purchasing choices (but nor would I judge those who lack the time or resources to do so). Buying Fairtrade is a vote for ethical consumerism, an act of support that strengthens the movement as whole. But it’s also, and more immediately, a vote for a particular brand—one that’s slowly, but perceptibly, moving away from ethical consumerism and becoming its opposite.
*The exception is climate change, obviously. Skeptics, STFU.
Fair trade criticism #1
Fairtrade farmers in the developing world don’t actually earn any more than non-Fairtrade farmers.
Is it fair? The evidence is unclear. To an extent, the criticism misses the point: Fairtrade has less to do with overall income and more to do with ensuring a consistent price for crops, teaching producers about the best farming methods, and meeting certain environmental and labour standards. Even so, Fairtrade products are heavily marketed on the higher earnings its producers supposedly earn, which we’ll get to later. ★★½
Fairtrade criticism #2
Fairtrade reinforces developing countries’ reliance on cash crops.
Is it fair? In theory, yes. Although paying more for products like coffee means more growers will enter the market, the amount going to individual growers will stay low because the revenue is now spread among a larger group. And now that there is more competition, it’s unlikely that prices will continue to increase. Individual coffee growers only get richer if coffee becomes scarcer, which means other growers leaving the market. Rather than paying the developing world to produce cash crops, we should be supporting them to diversify their economies. ★★★★
Fairtrade criticism #3
Fairtrade looks to preserve small-scale, traditional methods of farming. By doing so, it incentivises inefficient food production and stands in the way of modernisation.
Is it fair? Sort of. Modern, large-scale farming can be more efficient than traditional methods, but this doesn’t necessarily mean the producers and workers will get to keep the rewards; most of these savings are passed on the consumer. Without proper regulation—often lacking within developing countries—modern farming methods can also be environmentally disastrous, ruining soil and creating water shortages. ★★½
Fairtrade criticism #4
The accreditation criteria for Fairtrade are arbitrary and racist.
Is it fair? To an extent. Many of the criteria are unrelated to “fairness” per se. For instance, it’s not clear how the size of the producer should inherently affect the transaction’s “fairness”. If larger, independently owned producers pay their workers well and are environmentally sustainable, it’s hard to see why they are nonetheless morally “worse” than collectives. These types of limitations also reflect typically patronising Western attitudes. The restrictions define what “their” industry should look like to meet “our” moral values, and do so by reading off a clichéd and unthreatening ideal of Third World cottage industries. ★★★½
Fairtrade criticism #5
Fairtrade is often corrupt in practice.
Is it fair? Corruption is always hard to measure because by definition, it is carried out in secret. Nonetheless, there is significant anecdotal evidence to suggest that some Fairtrade importers and accreditors have demanded kickbacks from producers. Fairtrade accreditation creates a relationship of dependency that is certainly open to abuse. ★★★★
Fairtrade criticism #6
Fairtrade products are marketed unethically.
Is it fair? Almost certainly yes. Most consumers of Fairtrade are highly misinformed about the nature of Fairtrade and simply assume it means more money goes to the original producer. Fairtrade marketing is heavily focused on pushing this narrative despite the lack of evidence. Fairtrade also relies heavily on boycotts and public shaming to bully retailers into stocking its products. ★★★★½
Fairtrade criticism #7
Fairtrade is an unethical employer.
Is it fair? Ironic, but true. Fairtrade relies heavily on volunteer youth labour, and many of these volunteers end up doing unpaid work at for-profit Fairtrade retailers. Many are ignorant or misled about who their labour is benefiting, and believe they are doing charity work. ★★★½
Fairtrade criticism #8
Fairtrade is simply a business, one that leeches off profits for certain cash crops without contributing anything to either producers or consumers.
Is it fair? Not really. Fairtrade does provide some benefits to producers, even if these are significantly less than what is claimed. FLO is a non-profit organisation. However, FLO-Cert is a private limited company. There is also no publicly available information on what either body’s directors and CEOs earn. National bodies who are members of FLO, such as the Fair Trade Association of Australia and New Zealand, earn income from service fees charged to retailers. Most of this goes on marketing the Fairtrade brand. ★★