
I saw an ad for Fairtrade products in the supermarket the other week. It told a little story, something like:
Miguel works on a citrus farm in the Dominican Republic. Thanks to you buying Fairtrade, he gets a good wage and decent working conditions. Fairtrade guarantees a better deal for third world producers.
Let me first state that I have no disagreement with the motives of Fairtrade. It’s a moral and decent thing to want to see humanity lifted out of poverty, quality goods produced and sustainable practices developed. The question, however, is whether Fairtrade actually is a reasonable means to achieve these motives.
Let’s look at Miguel - and not in the limited way that the ad portrayed him. Why is Miguel working on that citrus farm? Why isn’t he working a desk job in the US in an air-conditioned office and making $40,000/yr instead of, say, $2,000/yr? Well, Miguel doesn’t have the skills, education and abilities to justify an employer investing thousands of dollars in capital to make his job easier. If Miguel’s current boss built him an air-conditioned break room, increased his pay arbitrarily by $1,000 a year and changed his methods to be more environmental, then his profits would evaporate, his business would go under and Miguel would be worse off.
But also, apart from charity, Miguel’s best option is the citrus farm. If he isn’t working his job on the citrus farm, then he is making less money doing harder work. He might be begging, working in a sweatshop or selling drugs. His current job is sustainable because his skills and education have earned it - it was not given to him unmerited by a benefactor. He is producing real wealth for himself, a profit for his employer and a product for consumers. This is how wealth is created - albeit at the slowest rate for Miguel.
Preferring Miguel - Hurting Others
Actually, Miguel is not getting a raw deal working on the citrus farm. Miguel’s alternatives are not as good as what he gets in monetary and non-monetary compensation. By making Miguel’s deal more “fair” - we are effectively tying up more scarce resources in supporting Miguel and forgetting completely about Dawa, Marcus and Hugo on the margins.
When Fairtrade producers get a higher distribution of wealth for the same essential product (less the pseudo-moral feelgoodery of the Fairtrade logo) as non-Fairtraders, then those less-connected producers on the margins get less and slide closer to poverty. In other words, for every Fairtrade product bought for a higher price than the actual product deserves - that is extra wealth diverted from those producers most on the margins.
Fairtrade doesn’t guarantee a better deal for all Third World producers - it guarantees a better deal for some, richer and specially connected Third World producers and, in fact, a very unfair deal for others - again those even poorer than the ones being helped by Fairtrade.
Fairtrade benefits go only to those producers large enough and rich enough to pay the nearly one thousand dollar a year certification fee, as well as a premium per unit of product and also must be able to afford the expenses of Western labour standards. They also just have to be plain physically large enough to justify the attention of Germany’s Fair Labelling Organization (FLO)- which certifies some Fairtrade products. The FLO and certifiers like it just aren’t interested in smaller producers.
You Bought Fairtrade? Give Yourself a Pat on the Back!
Why, then, do people buy Fairtrade? A few people might argue that it tastes better, looks better or is otherwise of a higher quality than non-Fairtrade. However, this is subjective, and there is no quantifiable way to demonstrate that this is the case.
What we need to admit is that we like attention. We like to look moral. We like to be gracious benefactors. We like to be owed something. Look at Fairtrade’s marketing efforts - they don’t say it tastes better or focus on the quality of the product itself. Rather - they are selling the feeling of being a benefactor. By paying an extra 5% for your coffee, you - YES YOU! - can be a righteous and moral person - a footsoldier in the crusade for human justice and fairness.
We see the same thing with Global Warming products. By paying KLM Airlines an extra £15 when you purchase a ticket, you can have your emissions offset. This, despite the fact that there is no proof that the cost of your flight is doing £15 of damage to the environment, or that KLM will use this £15 in such a way that gives, quantifiably, the same return to the environment. Can’t we just write the check to “the environment”(ala “Santa Clause”) and bury it in the garden?
The only benefit that is created by going Fairtrade, is the same benefit some of us get from giving change to the homeless or running laps for cancer - we feel just a little better about ourselves and the world we live in.
But we shouldn’t feel better about buying Fairtrade. All we’re helping are the better-off Third World producers - and we’re actually setting up serious financial obstacles for smaller, poorer farmers.
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