Fair trade is an organized social movement whose goal is to help producers of commodity products in developing countries achieve better trading conditions. Farmers can get their products, such as coffee or bananas, Fairtrade certification through certain standard-setting organizations. But to get such certification, they must meet various environmental, labor, and developmental standards that can be costly to implement and maintain.
The benefit for farmers is that with Fairtrade certification, they are able to sell their products at a higher price. At least is the intention—the reality seems to be quite different. A new study sponsored by the British government finds that wages on officially certified markets are below what is paid by comparable employers:
Sales of Fairtrade-certified products from Uganda and Ethiopia are not benefiting poor farmworkers as profits fail to trickle down to much of the workforce, says a groundbreaking study.
The Fairtrade Foundation is committed to “better prices, decent working conditions, local sustainability and fair terms of trade for farmers and workers in the developing world”. But a UK government-sponsored study, which investigated the production of flowers, coffee and tea in Ethiopia and Uganda, found that “where Fairtrade flowers were grown, and where there were farmers’ groups selling coffee and tea into Fairtrade certified markets, wages were very low”.
Christopher Cramer, an economics professor at Soas, University of London and one of the report’s authors, said: “Wages in other comparable areas and among comparable employers producing the same crops but where there was no Fairtrade certification were usually higher and working conditions better. In our research sites, Fairtrade has not been an effective mechanism for improving the lives of wage workers, the poorest rural people.”
Researchers who collected detailed information on more than 1,500 people said they also found evidence of the widespread use of children being paid to work on farms growing produce for Britain’s leading ethical label.
For a comprehensive discussion of Fair Trade, be sure to check out the new monograph in the Studies in Christian Social Ethics and Economics series, Fair Trade? Its Prospects as a Poverty Solution.
In this monograph, Claar suggests that, for all its good intentions, fair trade may not be of particular service to the poor, especially in the developing world.