Fair Trade

Fair Trade

Just how fair is fair trade?

Just how fair is fair trade?

Over the last few years fair trade has grown exponentially. Gone are the days when buying fairly traded products meant
going to your local market and buying a banana for €6.00 from a man who smelled like carrot cake and looked like Jesus.
No, Fair trade is now well and truly main stream. Today it wouldn't be difficult to buy your entire grocery shop without putting
anything un-fair trade into your trolley. Even clothes and children's toys are starting to become more readily available.

But as the saying goes "what goes up must go down" and the fair trade organization has recently been stabbed in the back
by it's own success. Claims that Fair trade actually worsens the lot of the 3rd world farmer have been circulating the net
more and more recently.It has been said that the higher wages earned by FT workers cause sudden, localised inflation. This
inflation is then felt by other, non-fair trade workers in the area making the poorest of the poor even poorer.Similar to the effect of
a sudden influx of tourists on a small area would have on those locals that do not work in the tourist industry

Taken at face value this would appear to make sense, but one must consider that, although the combined mass of farmers that
make up a FT cooperative may be huge, they are generally highly dispersed and rarely have more than a handful of workers on
each farm. This would mean that inflation caused in an area by a FT farm would be minuscule. Add to this the fact that a "fair trade
premium" payed on all on all products sold goes directly towards improving the local infrastructure and you will see that, far from
hindering the local people, the locality benefits hugely.

Another claim that is made is that fair trade workers do not receive the benefits that consumers expect when they pay the premium
price.This is simply inaccurate. Fair trade is not, and never has been about paying western wages in impoverished countries.
If an Afghan farmer, who would usually earn less than one hundred dollars a year were to have his wages suddenly increased to $30,000
it would have disastrous consequences. It would cause huge inflation and would have a catastrophic effect on other non-fair trade farmers
in the country.

A Financial times article pointed out that Coffee farmers in Peru had their daily pay increased by just $1 to $3 when their plantation was
fair trade certified. This may not seem like a huge difference, but, imagine if you had your pay cut by one third. Could you survive? Your life
would certainly be very different wouldn't it?
A dollar in Lima and a Dollar in Washington are worth completely different amounts. In the united
states a dollar would purchase little more than a mars bar, or perhaps a newspaper. In many parts of Peru a buck will get you a decent meal
and some drinks in a reasonably nice restaurant.

The last and most truthful claim that is regularly made against Ft is that it is still the major multinational organizations, such as fyffes or starbucks
that make the major profit.

This is 100% true. When Costa coffee introduced fair trade coffee to their menu they added a  20cent surcharge. Of this only $0.02 went to the producer.
At the moment very little trade is done Directly between 3rd world producers and retailers. The majority of current trade in this market is done via
wholesalers who repackage products before selling them on to retailers. However a small start-up company based in Ireland is currently trying to
help. Fairersource (http://www.fairersource.com/) is a web directory that allows fair trade producers to list their produce and sell it directly to retailers in
the west.

About the Author

Hi guys. My name's jake. I believe in 2 things freedom of the internet and fair trade...pretty random eh?

All of my articles are kopimi which means that you can do whatever you want with them...publish them on your site, spray paint them onto the carcas of a dead goat (?) whatever.
You can even claim that you wrote them if you want!

In some of my articles I've added a backlink to my website. I would ask, that if you choose to publish my article on your website you please keep that link where it is. Otherwise
you're using my article illegaly.

How to effectively make a product fair trade?

My question is on bananas.
These are the methods that I already know:
-setting product prices at a minimum that covers the cost of sustainable production
-promoting producers by the use of funds
-Methods that concern setting prices at the final wholesale or retail level is impractical as it is illegal

Would there be another way to make bananas a fair trade product without using these methods?

Fair trade does not have an objective meaning. It's not a term of economics, it's a term of ethics. Like fairness itself, the meaning depends on the opinion of the person using the word.

Think of it like this. Suppose you want to know the difference between the market price of a banana, and the 'fair' price. How would you calculate that? Well, you can't, because it's not calculable.

You might say, it's the difference between the market price, and the price of production. But you could only conclude so if you had pre-supposed that the price of production is the fair price in the first place, so the argument would be circular.

What makes you think that the sellers of bananas aren't already pricing them so as to cover the costs of sustainable production? If the market price is less than that, then people won't buy them, so it won't be sustainable any more. And if the market price is more than that, does that mean it's not fair, so the producer should get less?

"Promoting producers by the use of funds" - how is that different from what the market price does?

It is no answer to say that the fair price is "the final wholesale or retail level" because your mission - should you choose to accept it - is to specify the difference between the market price and the fair price.

The fact is, the reason why the fair price cannot be distinguished from the market price is because the concept is meaningless, or purely subjective. The market price, being based on consent in voluntary transactions, is the fair price.

Oxfam Fair Trade Clips