Samuel Kampa recently reviewed Victor Claar’s monograph, Fair Trade? Its Prospects as a Poverty Solution. Kampa begins by commenting on how quickly the “fair trade” moment has gained popularity, especially among the college and post-college aged, but also in the church community. He says that young people “are doing one thing right: expressing sincere concern about world poverty.  If this concern can be channeled into effective action, great things can happen.  Of course, effective is the key word.”

First, he offers a short list of reasons, given by fair trade advocates, why the fair trade movement is necessary:

1) Many farmers and workers in the international community receive very low prices for foods and commodities and are forced to live on less than $2 a day.
2) Many of the foods that Western consumers eat have been harvested by grossly underpaid farmers and workers.
3) The fact that Western consumers benefit at the expense of impoverished farmers and workers is both unfair and morally undesirable.
4) Agencies like Fair Trade USA guarantee fairer prices for crops and commodities, vastly improving the quality of life of farmers and workers.
5) Fair trade products are more expensive than non-fair trade products, but fair trade farmers and workers are receiving fairer prices.
6) Fair trade materially benefits the lives of impoverished farmers and workers at little cost to the consumer.
7)  Therefore, consuming fair trade products is morally preferable to consuming non-fair trade products.

Kampa explains Claar’s conclusions about fair trade: “Far from improving the lot of the poor, fair trade actually hurts non-fair trade farmers, keeps fair trade farmers in relative poverty, and diverts money from more efficacious charitable endeavors.” Kampa offers the two main critiques against the movement from the monograph as: “(1) Fair trade economically damages non-fair trade farmers. (2) In the long term, fair trade does more harm than good to fair trade farmers.” He then points out that “if true, [these two critiques] damage premises 4-7 in the pro-fair trade argument outlined above.”

Kampa also discusses the points in which he disagrees with the monograph:

First, Claar ignores the role that fair trade plays in community development.  Portions of the premiums that are paid to fair trade collectives go directly to health care, educational initiatives, and initiatives pertaining to women’s equality in the agricultural workplace; each of these initiatives could give communities the impetus to change their crop production if they so desired.  Second, fair trade continues to receive support from many fair trade farmers and highly experienced NGOs (like Oxfam), thus suggesting that fair trade isn’t entirely bunk.  Third, Claar’s argument is heavily theoretical and lacks appeals to empirical research.  Fourth, my own lack of economic expertise makes it impossible for me to make a fully informed recommendation regarding a complex economic issue.  However, despite the apparent weaknesses in Claar’s thesis and the obvious weaknesses in my own background, I do still find myself supporting Claar’s position.

After pointing out the fair trade movement’s failings, Kampa decides to end on a positive note, focusing on organizations that he believes are working to alleviate poverty, such as Compassion International, GiveWell, and Oxfam. He also points out that even if Claar is absolutely incorrect in his assessment of the industry, caring individuals would still do more good to donate to proven charities instead of paying a premium on fair trade coffee. You can read his entire review here.

If you’re interested to learn more about the extraordinarily complicated topic of fair trade, you can listen to this audio. Victor Claar recently gave an interview with Kevin Boling for his radio program, Knowing the Truth. They discuss various facets of the fair trade movement, Claar’s monograph, and the work of PovertyCure. You can listen to the entire radio show below: