| I suppose a backlash against Fairtrade was inevitable. But it has been astonishing to see the extent to which otherwise intelligent commentators have, throughout Fairtrade Fortnight, wilfully or ignorantly misconstrued the case for one of the great innovations of recent decades. They have parroted criticisms published recently by the Adam Smith Institute that are inconsistent, contradictory, and factually flawed (Comment, 29 February).
The concept of Fairtrade does not originate in the collapse of the price of coffee in the 1990s. The first fairly traded coffee was exported into the Netherlands in 1973 from small Guatemalan co-operatives. Third World goods were first imported into the UK at “fair” prices in 1974. The quality of the products was poor at first, then it became variable, and now most of it is good, and some of it is of gourmet standard.
The idea that Fairtrade benefits a few farmers at the expense of others misunderstands the nature of the arrangement. Fairtrade offers not a fixed price, but a minimum one as a safety net. When prices are above that, as now with coffee, all farmers benefit. When it falls, the safety net ensures that the most vulnerable people in the supply chain can cover their costs in time of crisis. There is no meaningful sense in which others lose.
It is not true that most of the farmers who are helped are in relatively wealthy places such as Mexico rather than in poor places such as Ethiopia. In 2007, from a global total of 632 Fairtrade producers, just 50 were in Mexico, compared with 242 in Africa. Nor does the system favour middle-income landowners over poor landless labourers. Fairtrade works with smallholders on coffee, cocoa, sugar, nuts, and cotton, but it concentrates on strengthening hired workers’ rights in larger commercial farms in tea, fresh fruit, and flowers, where markets are more diverse.
There are similar factual answers to most of the ideological claims the Adam Smith Institute has made.
The idea that Fairtrade prices sustain uncompetitive practices (by discouraging farmers from giving up on poor products and growing something more profitable instead) is fine economic theory. In practice, poor farmers simply do not have the additional resources, knowledge, or markets to diversify instantly.
Fairtrade encourages farmers to intercrop citrus fruits with their coffee in Guatemala, or macadamia nuts in Rwanda. It offers farmers low-interest loans to set up small enterprises, such as vegetable-growing, chicken-rearing, and milk production.
The idea that small vulnerable producers need to be sheltered in their early years from the harsh winds of full competition from big business is not a Fairtrade notion; it was first enunciated by that high priest of free trade, Adam Smith.
The dichotomy of free trade versus fair trade is false. No one is objecting to the idea that EU and US farm subsidies must end if small farmers are to compete effectively. Free trade is better than protectionism, but free trade is not on offer at present, only trade weighted towards the rich. Fairtrade is a useful corrective in that — and a growing one. Fairtrade projects now touch the lives of seven million poor people. They cannot be abandoned while the ideologues of free trade argue for a truly free system that never seems to arrive.
Fairtrade is not a full solution. But no one was saying that it was — only that, as Edmund Burke put it: “No one could make a greater mistake than he who did nothing because he could do only a little.” |
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