Is Fair Trade Really Fair?

Jingjing Xia

Instructor Keith Corona

Linguistics 3C - 9:00am

01/30/2017

Is Fair Trade Really Fair?

           Attracted by the slogan of “better prices, decent working conditions and a fair deal for farmers and workers in developing,” many producers advocated and joined fair trade to seek higher revenue and better livelihood. However, in recent years, many producers and growers chose to quit this market. For example, Peter Giuliano, president of Specialty Coffee Association of America, used to be a model of fair trade advocates, has already left it because he thinks fair trade fails to keep its promise of reducing poverty. Also the public concerns whether the money they paid extra to fair trade is really go to right places. According to Colleen Haight’s article, “The Problem with Fair Trade Coffee,” fair trade has no sufficient data showing positive economic impact on growers. If so, fair trade is indeed not fair, both to producers and to consumers.

          First of all, there is a necessity to make certain how fair trade works. Only after knowing how it works, we can find out the limitations of fair trade. Haight explains that the first step is institutions like FLO (the Fair Trade Labelling Organizations International) and Fair Trade USA set a series of minimum standards which conclude aspects of social development, economic development and environmental development to make sure products labeled with fair trade are produced under cooperatives, workers can get good working conditions, and the producing processes are sustainable agriculture practice. Once small producers meet these requirements, then they pay money to be certified. Then they can enjoy a stable price and premium money. Haight clarifies that the mechanism fair trade uses to stabilize the price is a price floor which is always higher than market price to guarantee producers’ revenue can cover their cost and also get premium money which aims to improve the communities which producers live in.        

          Though all these above mentioned descriptions is seemingly to make fair trade a workable economic model, people among both producers and consumers are losing interest and confidence in it. The reason of this declination is that fair trade is not really fair in some ways. First, it is unfair for some farmers and workers who do not really benefit from fair trade. Second, it is unfair that only certain type of producers can get certification of Fair Trade. Third, it is unfair for consumers to pay higher price and get unmatched quality. For these “unfair,” it is reasonable to see that fair trade is losing its power on economic market and confronting with the threat of being replaced by other economic models like direct trade.

          The premium money paid by consumers is not directly given to farmers but co-operatives to build some social facilities which cannot directly improving farmers’ life level. Even in some poorest areas, people are unable to use these facilities. Therefore, the farmer’s power to control how and where the money being used is very low. Their initial expectation to join fair trade was to get an excess to a bigger market and get more income which the institutions promised to them. However they find that there is no obvious change of their livelihood and they are still poor and cannot offer a better life for their families. There is a professional investigation in which a group of experts lived in remote villages of Sumatra, Indonesia for a month and tried to gain a firsthand understanding of livelihood of fair trade farmers mentioned in Patricia Chin-Sweeney & Jason Spindle’s article “The Future of Fair Trade...Is There One?” The results of this observation show that, “Not a single farmer could say whether their life had improved financially or otherwise since the arrival of Fair Trade” and “Many could not recall the last time they received any training or saw any of the co-op training staff.” Beside these farmers, there is another group of people even worse off. Haight points out that the poorest segment of the farming community, however, is the migrant laborer who does not have the resources to own land and thus cannot be part of a cooperative. Therefore, though these workers are in the chain of fair trade, they are get rid of the whole profit and just earn little wages. They do not have perfect protection from law like indigenous workers, so their rights may exploited and violated by farm owners. If these farmers and farm workers are not truly benefit from fair trade, the basic belief of alleviating poverty of fair trade is broken down.

          One of the minimum standards of entry into fair trade is that a grower must belong to a democratically run cooperative. This rule turns many good producers away. Haight claims that this means private estate farmers and multinational companies like Kraft or Nestlé cannot be certified as Fair Trade coffee, even if they pay producers well, help create environmentally sustainable and organic products, and build schools and medical clinics for grower communities. Maybe supporters of fair trade insist that the goal of fair trade is to help small producers. But these successful producers can bring positive results for fair trade rather than negative. For example, companies like Kraft and Nestlé already possessed mature producing lines and many loyal consumers. So they can add considerable sales volume and pay more premium money to fair trade. Then Developed countries can received more money to contribute to community facilities. Despite this, these companies can also benefit other small producers by buying their products as raw materials. What’s more, their involvements can lead fair trade more reliable and truthful from the perspective of public. In a word, the inflexible rule of fair trade not only treats producers unfairly, but also leads this economic model to give up many opportunities to develop better. The characteristic of fair trade which focusing on certain type of producers makes it lose power of markets unquestionable.