In mid-2014, the Guardian (probably my favourite news outlet of recent times) published an article quoting a ‘groundbreaking’ study into Fairtrade International, claiming that its findings indicated that, not only do the profits of the fair trade enterprise not trickle down beyond enterprise managers, but, moreover, the workers on ‘fair trade’ certified farms are, in the areas surveyed, actually paid less and working under harsher conditions than similar workers on non-certified farms.
You can read the article here. One of the authors of the study, Professor Christopher Cramer of the University of London, is quoted as saying “…In our research sites, Fairtrade has not been an effective mechanism for improving the lives of wage workers, the poorest rural people.”
No doubt, this article has caused many to ask: “If we can’t trust Fairtrade International to give a good deal to farmers, who can we trust?” A poll placed on the Guardian website is, at the time of writing, indicating that 72 per cent of respondents “no longer” trust ethical labels.
So who can we trust?
This is an exceptionally difficult question. On the one hand, Fairtrade International has been operating for a quarter of a century since it was founded by a group of international NGOs in the UK. Undeniably, its impact has been positive, with direct and indirect benefits of fairer prices felt by millions of the world’s poorest people. However, the awareness raised by their global campaigns has arguably achieved a much greater impact as western consumers increasingly question their purchasing habits and the impact of their lifestyles on the poorest producing regions.
But if even Fairtrade International is unable to effect meaningful change among the world’s most destitute – if indeed some of their programs are being shown to cause detriment among subsistence farm workers – then there are big questions to be asked.
The allegations made are, essentially, that the profits earned at the enterprise [farm] level under the fair trade schemes are not distributed further down the value chain – where they are most desperately needed. Indeed, while many of the ‘development’ projects for which Fairtrade International has earmarked profits have been built, there is widespread evidence that those facilities are kept beyond the reach of ordinary workers such that they derive no benefit from them.
In the face of a similar article earlier in the year, Fairtrade International offered a response (accessible here), in which Kate Lewis; coffee product manager at the Fairtrade Foundation, stated that the criticisms levelled are simplistic of an extremely complicated issue. The structure of the Fairtrade arrangement, the most common of which exists in the coffee market, is such that farmers are guaranteed a floor price for their beans – this is 20c per pound above the cost of production. They will always earn at least this much.
What the farmers choose to do with the extra 20c and “many are investing a large percentage of it in quality and productivity improvements”. And this is the crux of the matter; by ensuring stable, predictable, incomes in an otherwise unpredictable and volatile market, producers have been able to invest in process and quality improvements to make their product more competitive.
One producer noted that “it is not true that certification is a charity. In [our] case we witnessed in the last 20 years … when the market price was way below the cost of production, the stable prices that we receive through the Fairtrade system enables us to continue to invest in our farms and improve the quality of our coffee”.
Perhaps Ms Lewis said it best: “Fairtrade coffee is not about charity, it is not about giving aid to the poor, it is about improving the lives of farmers through trade.” No single initiative is perfect, and Fairtrade International freely admits there are huge limitations to what it can achieve. They never promised to police the treatment of farm workers – the resources involved would be mind-boggling. But it’s something – and lots of small gains can add up to a big victory over time. Hopefully more of these farmers will soon see the benefits of treating their employees well.