Why Fair Trade isn't fair

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Fairtrade is extraordinarily successful at making wealthy westerners feel that they are warm, caring people. However there are a lot of reasons to doubt whether it is of much benefit to farmers in the Third World. It is argued, in fact, that it harms far more farmers than it helps.

'Ethical Objections to Fairtrade' is based on the knowledge that if aid is diverted from the poorest and most needy, it causes death and destitution. This paper shows the damage Fairtrade does to the vast majority of farmers, those who do not belong to Fairtrade. It also shows that most of the extra money that charitable people pay for Fairtrade never gets to the intended recipients. Much of the trade is a criminal offence under EC law.

'Lack of Rigour in Defending Fairtrade' (published in Economic Affairs) shows some of the mistakes and lack of logic of the Fairtrade proponents, using the example of Alastair Smith.

Rejoinder: False Statements, Misrepresentation and Distortion in Defending Fairtrade, (summarized in Economic Affairs) shows some of the very poor scholarship that sometimes appears.

Refutation: Does Fair Trade deliver on its Core Value Proposition? shows some more very poor scholarship, by Arnould, Plastina and Ball (2009).

The official response of the Fairtrade Foundation to my Prospect article is Harriet Lamb, Fairtrade is Fair, Prospect 2008. It is dishonest. Similarly the official Fairtrade response to Marc Sidwell's Unfair Trade is dishonest in the extreme. His free market arguments may be unconvincing, but he does raise important issues which need answering.  An honest response to the many critics of Fairtrade would either be, ‘We have investigated and your facts are wrong: here is the evidence . . .’ or, ‘We have investigated and there is a problem. We have prosecuted the manager, and removed certification from one coffee importer. We are taking the following action to avoid repetition. Here is the evidence.’ The responses are not honest, in general. Sidwell quotes Lamb (2008b p114), ‘where she lays out some of the large-scale charges made by Fairtrade’s critics, and then answers with an anecdote from one Fairtrade producer, “But Merling is unequivocal: Fairtrade has changed the lives of the farmers in her cooperative”.’  See also (Lamb H. S., 2006), (Newman, 2006), and Fairtrade responses to Christian Jacquiau’s (2006, 2007), 500 page critique (Doussin, 2007 ), (Hamel, 2006).

 

Peter has spoken on Fairtrade

Why Fairtrade isn't fair

What happens to the money?

Who is telling the truth, Peter Griffiths or Fairtrade?

 

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Some articles on Fairtrade

In a wide-ranging review of research on Fair Trade, Laura Raynolds of Colorado State University found that ‘there is surprisingly little research that documents how individual producers, producer organizations, grower households and communities benefit.’ Raynolds, Laura T. (2002) ‘Poverty alleviation through participation in Fair Trade Coffee Networks: existing research and critical issues. Eight years later she still can come up with no hard evidence.

Marc Sidwell, Unfair Trade, Adam Smith Institute, London 2008. http://www.adamsmith.org/publications/economy/unfair-trade-20080225961/ 

Philip Booth, The Economics of Fairtrade: a Christian perspective. http://www.iea.org.uk/record.jsp?type=book&ID=437

Colleen Berndt, Is Fairtrade in Coffee Production Fair and Useful? – Evidence from Costa Rica and Guatemala and Implications for Policy. George Mason University. http://www.chaight.com/Research.htm [now Colleen Haight].

 


 

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