Giles Fraser: Is Fairtrade the same as fair?

27 February 2008

The Adam Smith Institute has just exploded a bomb underneath Fairtrade Fortnight. Fairtrade is not fair, it says. Many Christians will be furious, because many of us love the whole Fairtrade enterprise.

When our compassion was aroused by the crisis for farmers brought about by the collapse of the price of coffee in the 1990s, some churches began to serve Fairtrade coffee after services. Back then, it was pretty disgusting stuff — but we drank it, feeling all the more worthy precisely because it was not terribly nice.

Since then, the coffee has got much better, and many other products have joined the list. Many churches run Fairtrade stalls, so that the congregation can stock up on ethically traded sugar or chocolate. OK, so it is a bit more expensive. But if that little extra is helping farmers in developing countries receive a stable price for their product, and, at the same time, helping them farm in environmentally sustainable ways, it is surely worth it.

The Adam Smith people argue that it is all a con. First, most of the farmers who are helped are in relatively wealthy places such as Mexico rather than in poor places such as Ethiopia. Second, it benefits a few farmers at the expense of their non-Fairtrade neighbours, who then have to compete on unfair terms, and can be left worse off.

Worst of all, that “little extra” that kind churchgoers are happy to spend actually works to keep poor people poor. It sustains uncompetitive practices, and discourages farmers from diversifying into areas of more profitable economic activity.

Some farmers, for instance, are working in climates unfavourable to coffee production, and are thus being encouraged by Fairtrade to stay in places that will never make them proper money.

At the heart of this is a debate about the degree to which the Churches are prepared to recognise the global market as a way of spreading wealth to the poorest people. The Adam Smith Institute thinks that economic protectionism is what keeps the poor in poverty. It argues that it was price-fixing that caused the coffee-price slump in the ’90s.

The real moral evil is the way we in the West look after number one by protecting our jobs and markets from competition from poorer countries. Sadly, the Church does little to engage with this sort of argument, as well-meaning churchgoers shell out for more expensive chocolate, but often miss the big picture.

As Bill Clinton rightly said to the World Economic Forum: “We have to reaffirm unambiguously that open markets are the best engine we know of to lift living standards and build shared prosperity.”

The Revd Dr Giles Fraser is Team Rector of Putney.

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