Thursday, July 13, 2006

Is fair trade fair on the future?

Of late I have been reading the fine blog Green La Girl. Basically she spends her time discussing various free trade products and environmental policies and it is a good read. However it has got me thinking about fair trade products.

Lets face it your coffee from your favourite blend probably is the result of some poor unfortunate uneducated person in some god forsaken country with little chance of progress in their lives picking beans.

I am supportive of fair trade products in 1 respect but against it in another. My support is derived from the fact that this is giving poor people more money then they have at the moment and make their life a little easier which is a very noble thing. Also it is a very successful brand and if people choose to buy the fair trade product then fair play to the people who produce it.

My reasons for being against it is because the reason that the price of fair trade goods are higher is because people are paying extra not on the basis of a better quality product (all though in some cases it is) but because of the moral message behind it. In essence it is a form of charity. Now do get me wrong there is nothing wrong with charity but I often do wonder are we making a bad situation worse.

For many of these countries they are using coffee banana’s etc as cash crops and they are the sole provider of many jobs. Despite the use of fair trade products and fair pricing one simple fact is going to remain. It is not economically viable for that many people to survive on small farm holdings. (Remember what happened in Ireland when one crop failed) These people are simply never going to make enough money to have a comfortable life where their children can have a decent stab at life.

If the prices are bad then maybe people will be forced to leave farming and go into areas that are economically viable. Look at Ireland and the effects that an over reliance on farming caused. We simply did not have the means to pull our selves out of the quagmire of poverty. With Fair trade this practice is being sustained and while it is good in the short term I have to wonder is it consigning people in third world countries to the charity of the richer nations in the longer term. Surely our objective should be to let themselves lift themselves out of poverty. Agriculture is not going to do this. What happens when the oil runs out and the cost of shipping goods comes exorbitant. The sale of cash crops will drop and without alternatives what then? Instead of agricultural subsidies we should be encouraging free trade and education.

3 comments:

Rodney North said...

Dear Simon,

There may be various differences of opinion between yourself and those of us who have a more positive assessment of the long-term impact of Fair Trade practices upon small-scale producers, but for now it might be most helpful to just discuss one difference. So lets start with what I believe to be your assumption that if those farmers currently receiving Fair Trade prices did NOT receive those prices that they would then leave coffee farming (or whatever crop is in question) and instead take up "more viable economic activities". Have I portrayed your position correctly?
If so, then we have a "natural experiment" available to us. Namely, let's look at what millions of small-scale coffee farmers who do NOT receive Fair Trade prices. Are they leaving coffee farming? If so are they finding more "economically viable activities"?
One great resource to answer these questions is http://www.colostate.edu/Depts/Sociology/FairTradeResearchGroup/, where you can find a collection of studies on such questions by anthropologists, economists, and others who have studied such matters for years.

From my own 10 years in the coffee/cocoa Fair Trade trade, and from my experience visiting with farmers, and from my (undergrad) degree in International Development Economics my sense is that the answer to this central question is varied. Yes, some do leave coffee farming, especially the children of farmers who choose not to follow in their parents path. But do those who leave, say, coffee, do better than those who stayed, let alone those who receive Fair Trade prices, etc.? My sense is 'no', they don't fare better economically EXCEPT for maybe those who begin cultivating illegal crops, like coca in Peru, or who migrate, usually illegally, to rich nations. Of course, both of those options are, to say the least, problematic.

If you have a contrary impression, or evidence, even anecdotal, that those who leave coffee fare better that would be useful.

Lastly, one thing we have seen repeatedly, is that Fair Trade policies actually enable some people to leave coffee or cocoa farming BUT in a healthy manner. For example one cocoa farmer I met in the Rio Apurimac of Peru explained how it was his family's hope that his son would NOT be a farmer - of ANY crop - but rather would receive the high school education that the parents never had, and therefore move into more skilled work. And what was making that higher level of education possible? Answer: the extra Fair Trade income the community was receiving for its cocoa.

Respectfully, Rodney North

Jo said...

Simon
As you knidly drew my attention to this I felt morally obliged to comment. :) Although you might not appear to commit the cardinal sins that I outlined your view that if prices are poor people would be forced into economically viable work is somewhat harsh not to say failing to recognise that the choices you may see in the West where people can choose where to work and what to work at are somewhat more limited in the areas where Fair Trade etc are focussd. The lack of choice enhances the attarcativness of the bad choices, which in todays society are a lot to do with drugs - their cultivation, production, refinement and selling.

Why so many western people seek narcotic oblivion in our free market Paradise on earth is of course a topic for another occaison. :)

simon said...

rodney I will get back to you. Jo. I know it is harsh very harsh indeed. But if it is better in the long run as I believe it is the better thing to do.

It is better to ruin 1000s of lives then millions if you know what i mean