The Road to Fairtrade (and points elsewhere) is Paved with Good Intentions

If you aren’t addressing the underlying economics and shaping the market through policy, you are swimming upstream at best. Some might say pissing in the wind.

According to Mr Sylla’s calculations, for each dollar paid by an American consumer for a fair-trade product, only three cents more are transferred to the country it came from than for the unlabelled alternative.

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About Marc Brazeau

Free lance cultural attaché. Writing at REALFOOD.ORG.

5 responses to “The Road to Fairtrade (and points elsewhere) is Paved with Good Intentions”

  1. Ray Guerra says :

    3% of over 5 billion dollars a year is a pretty large sum. Especially given the exchange rates of poorer countries. Is this really swimming up stream? I would be interested in hearing more about combating the underlying economic realities in these countries but is Fairtrade really something to dismiss?

    • Marc Brazeau says :

      It’s a $150 million. This group details 57 countries with FT producers, call it 50 and that works out to $3 million per country. That’s cocktail napkin math and not entirely fair and obviously doesn’t capture some stand out successes.

      I would say that as a consumer, you’d be better off buying the best coffee at the best price and donating the difference to a group like Technoserve.

      http://www.technoserve.org/

      I would venture that institutional programs like CAFE Standards that Starbucks participate in are more likely to be impactful than consumer facing programs.

      • Ray Guerra says :

        Thanks for the link to technoserve. that’s the first I’ve heard of them. But as far as the issue of fairtrade goes I’m still unconvinced that it’s a marginal contribution. Yes, $3 million compared to each countries’ GDP is pretty insignificant but that 3% isn’t going to the country it’s going to the producers. when that 3% is spread amongst a smaller pool it is probably felt a little more deeply. I imagine it would be similar to a small scale farmer here being able to sell directly to the consumer at a fair price (CSA’s and farmers markets) than to sell to a global distributor at a reduced price. Am I reading this wrong?

      • Marc Brazeau says :

        If it’s really raising incomes by 3% maybe. But that has to be balanced against the possibility that it distracts from meaningful reform.

        I’d like to see harder numbers.

  2. zombiehero213 says :

    “In the long run, however, Fair Trade represents, at best, a Band-Aid solution to the problems a deficient institutional structure creates in coffee-producing countries. Reforming the institutional framework to foster entrepreneurship and trade can better address the main problems Fair Trade attempts to resolve, such as low pay for the poorest segment of the population and the erratic business cycle.”

    http://mercatus.org/publication/does-fair-trade-coffee-help-poor-evidence-costa-rica-and-guatemala

    And there is this: https://www.youtube.com/watch?v=7zvSO43SOtk

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