Is "Fairtrade" Coffee Fair?

by gerrypopplestone | June 30, 2008 at 06:18 am | 817 views | 18 comments

by mrn8

by massdistraction

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Opinion.

The brand:

Fairtrade coffee is a fantastic brand.

It has the feel of integrity, the smell of wholesomeness, and the taste of honesty! A brand that sells a little over the going price in order to ensure the farmers who grew the product benefit. Altogether it seems like a delicious brew that is just what we require.

Indeed, it is so successful it has become the brand leader. In 2006 in the UK, consumers bought almost 300 million pounds worth of it. That increased the following year to nearly 500 millions.The brand has become so successful that the UK International Development Secretary here has promised Fairtrade 1.2 million pounds over the next two years so that it can increase its sales to a billion pounds by 2010 and two billions by 2012. The International Secretary says this is in ”recognition that Fairtrade is one important means of reducing global poverty”.

Even the sugar giant Tate & Lyle likes Fairtrade. It plans to turn its entire operation over to Fairtrade sugar and forty percent of the cost will go to growers in Belize.

Does it do what it says?

Harriet Lamb, Fairtrade director, says that people buy their products “as a personal practical action to help tackle poverty in the developing world.” She goes on to say that “in doing so, they are already helping to give a better future to the seven million people, growers and their families who currently participate in the Fairtrade system”. But I am sceptical. Fairtrade’s objectives of a better product, offering decent working conditions that are sustainable, with fair terms, are all notions that need precise definitions if they are to be tested. In Britain we all know what product testing means. Our independent Consumers Association rigorously tests various products, compares prices and gives clear results.

All we get from the Fairtrade company are unsubstantiated anecdotes of success stories. Surely, if it were truly a brand that does what it says, it would offer clear evidence that it is a company to be trusted as a way of reducing poverty.

Some local authorities support the brand by buying in bulk. Scotland even wants to make itself a Fairtrade country. Yet neither asks any Trading Standards Units to first look at whether or not Fairtrade is making false claims. Why not?

Simple solutions:

Perhaps customers like the idea that they need not bother to look very closely at the economics of trade when it is so complex. Just leave it to these lovely people. They are all of good provenance - Christians and Socialists who want to do good. That has to be all right! Yet The Economist published a searing critique in December 2006, concluding that Fairtrade was anything but fair. It was bad economics too. It said the system encouraged over-production and left other farmers not in the Fairtrade network worse off. Coffee prices are already problematic because of the protectionist tariffs and subsidies in European agriculture. These subsidies make it impossible for small farmers to grow and sell products suited to their climate. Vietnam moved into coffee in a big way a few years ago because it couldn't get into other markets. Also sugar beet grown in Europe is more expensive to produce than the equivalent sugar cane in West <?xml:namespace prefix = st1 />Africa. Yet the sugar cane cannot find a market over here. Until we unravel these complex farm support systems to give everyone the chance to compete on ”a level playing field” we will never have fair or free trade.

Moral overtones:

The arguments get clouded by these somewhat vague notions of fairness. Fairtrade seems to occupy the moral high ground. So the arguments on both sides get covered in emotions. Also, I would be happier to give Fairtrade greater credit if it did not make the rules. It says it wants farmers to have more control over their lives. Yet it insists they should operate only in co-operatives. Most of us would never want the stress of having to work in co-ops! Surely its farmers should themselves decide what the rules are to be. That does not occur.

We know too that one of the reasons for developing countries getting poor prices is that they usually get squeezed out of the more profitable manufacturing side. In fact, according to the recent report Unfair Trade (issued by the Adam Smith Institute (ASI) an outfit committed to free trade) this year, Fairtrade will only accredit farmers who are part of co-ops. Farmers working for Café Britt in Costa Rica are self-employed small businesses who own their land. Yet Fairtrade refuses certification even though Café Britt has increased its incomes by processing, roasting, packaging and branding locally. Fairtrade coffee is roasted and packaged in the UK. Need I say more?

The ASI Unfair Trade Report accuses Fairtrade of keeping farmers poor by denying them the use of improved technology in farming. It also rightly points out that the poorest workers in farming are the landless labourers. Yet nothing is in place to help them.

A cheap solution:

It also says that Fairtrade’s higher prices cover only a fraction (ten per cent according to the ASI) of many farmers’ output and that the wholesalers benefit more. This was the gist of an argument used in a BBC programme it put out a year or so ago. That was what first made me suspicious enough to think for myself!

The main reason I do not support Frairtrade is I don’t believe a penny or so above the ‘normal’ price really does anything to improve farmers’ livelihoods. That is a prejudice of mine since I cannot prove it either way. But Raj Patel’s book - Starved and Stuffed: Markets, Power…& the World Food System, points out that we customers and the farming suppliers are generally squeezed by the institutions that organize in the middle of the global food industry. I believe him!

Competition matters:

Fairtrade seems to be against competition for farmers abroad, does nothing about farmers being excluded from our protected markets and insists these small farmers remain stuck without the potential to expand and grow. Yet our farmers have expanded, grown and become more efficient in a competitive market. Many too have left the industry. This is a normal and healthy process given that manufacturing can offer greater long term growth than can agriculture.

Raj Patel says: “Fairtrade gives to small farmers clinging on by their fingertips enough money for them to cling on a little bit longer”.

That is why I am so sceptical about this Fair Trade malarkey.

Note: The pic with the hugger mug is not mine: it was offered by Gingko7 from Flickr!

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gerrypopplestone

at 06:33 on June 30th, 2008

For some reason, I get gremlins in my pieces! Is this the CIA?

Gerry

gerrypopplestone

at 07:43 on June 30th, 2008

Many thanks for the pics!

Gerry

Enkerli

at 10:11 on June 30th, 2008

Fairtrade branding has helped consumers think about the ethical considerations surrounding coffee production. But a Fairtrade label is not the guarantee of fairness in trade practises that it's taken to be. Nor is it a guarantee of quality. Fairtrade certification merely specifies a series of norms (designed by the Fairtrade Organization, not by the farmers) and a floor price for buyers (which may not have very direct an impact on farmers, given the "middleman system" involved).
I happen to enjoy this specific coffee blend and my impression is that the roaster does care about the fate of the farmers who produce the beans he uses in his blends. But, at least at the time this picture was taken, the packaging made no mention of the specific estates from which the beans were procured and the coffee was sold as commodity. This roaster tends to have inconsistent results and the Fairtrade label does little for the consumer in view of ensuring coffee quality.

Enkerli has contributed a photo to this story.

Barry Artiste

at 10:38 on June 30th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

gerrypopplestone

at 10:53 on June 30th, 2008

Thanks, guys, for the pics and the comments. I welcome disagreements: that is how debate develops. Me - I;m going to support Cafe Britt in future. I don't want Fairtrade to have such a hold over what is 'correct'.

Gerry

Rachel Nixon

at 12:17 on June 30th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

Re the gremlins - it's not the CIA ;-) If you wrote the story in Word, and pasted it onto the site, it often carries over some code from the Word document.

You can view it by clicking Edit in your story and then hitting the HTML button.

gerrypopplestone

at 23:59 on July 3rd, 2008

Thanks, Rachael. The only problem I have is that, having clicked on Edit, the story looks perfectly! But it still comes out with these gremlins. I'm SURE its either the CIA or the UK secret service!

Gerry

azzayindia

at 12:31 on June 30th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

HJP

at 13:13 on June 30th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

gerrypopplestone

at 02:54 on July 1st, 2008

Thanks, Rachael. Your reassurances about the non-interventionism of the CIA over anything to do with NowPublic is, well, re-assuring. But I still don't trust the British surveyiance (see, they've made me mis-spell) equipment. Did you know that we Brits are the most monitored in the world?

Gerry

PS: I have to admit I don't know what the HTML button does but I will consult with my friends!

Enkerli

at 11:18 on July 1st, 2008

Hadn't read the story, when I posted the comment to go along my photo. As I rarely take photos of anything and it's the first time I get asked permission for a photo of mine to be put somewhere else, I was a bit clumsy.

My thoughts on Fairtrade are similar to those in this post. And, as both a coffee geek and an anthropologist, I tend to care quite a bit about what happens with these types of trade. In fact, as non-Anglophone, I tend not to believe in free trade so much and I was originally intrigued by the concept of fair trade. Too bad it didn't deliver.

What could be mentioned, for coffee, is that there are new tendencies in the craft coffee world which does imply better situations for farmers. One which is quite limited in scope but which could have wide-ranging effect is the Cup of Excellence programme. Emphasizing extremely high quality coffee, the programme has auctions for some specific crops and it does seem that the money goes to farmers almost entirely. Since some coffees reached extremely high prices (two orders of magnitude more than the Fairtrade floor price), we're talking about significant amounts of money. And an impressive increase in the level of prestige afforded coffee.

The other tendency, less extreme but probably further reaching, is toward "direct relationship" coffee. In those cases, growers are contacted directly by buyers. Buyers "go to origin" (visit coffee producing regions), "cup the coffees" (sample them using a standard technique), discuss directly with farmers and, sometimes, even with pickers. And there is no "middleman." Like Fairtrade, direct relationship can benefit from branding. Unlike Fairtrade, it doesn't rely on norms set up by a committee foreign to the producing regions. In fact, it currently doesn't operate as a set of guidelines, it's more of a fluid practise (which makes for better flexibility). It does operate under the quality control of roasters' palates, which sounds like little but is actually a very efficient approach. Maybe a balance could be reached between this type of freegoing enterprise and a bit of standardization.

By the way, one comment about roasting and packaging. Coffee aromas are quite fragile after roasting. Many coffees lose the large majority of their aromas and flavours with seven to ten days after roasting. In fact, when oxidation coffee beans (after seven to ten days), the staling off-flavours can be quite unpalatable. While bags with one-way valves do slow down the process, they have no effect once the bag is opened. So, roasting and packaging at origin is very challenging and may produce an inferior coffee. It's also quite costly. Not to mention that roasting is an art which requires a lot of dedication for truly outstanding results.

Now, most of this has to do with an experience of coffee as a culinary item. Not "premium" coffee as a glorified commodity. Coffee as art. Artisan coffee, well-crafted coffee, coffee which makes people weep.

The thing about high quality coffee is that it's really not that expensive for the consumer. Oh, sure, it's usually more expensive than the typical Charbucks bland which is already slightly more expensive than preground canned Robusta beans. But it's much less expensive than most other drinks and it makes for a truly remarkable experience.

The unfairness of the trade practises affecting coffee farmers around the world mostly has to do with coffee as a commodity medicine, not coffee as a well-crafted beverage. Coffee which is merely consumed for its caffeine, not enjoyed for its flavours and aromas. As controversial as they are, the Starbucks multinational corporation has probably offered some help in the move toward improving the quality of coffee as a flavourful beverage. They still do little to help coffee growers and pickers empower themselves. In fact, their business tactics are quite heavy-handed and their effects on coffee-growing communities may still be quite negative.

gerrypopplestone

at 11:32 on July 1st, 2008

Thanks for your detailed comments, Enkerli. And especially for sharing your knowledge about roasting which I have never really thought about. Sadly my idea of giving local farmers more control over the whole process is not really feasible.

All the best,

Gerry

PS: You can say that again about Starbucks tactics!

amyjudd

at 17:05 on July 3rd, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

I wish I had seen this earlier! Good piece!

gerrypopplestone

at 00:01 on July 4th, 2008

Thanks, Amy. Somehow, as soon as I finish one story, I get ideas for another!

Gerry

jordan

at 11:05 on July 6th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff. Meanwhile, I think you got hit by a filtering bug, as opposed to the Coffee Infiltration Agency.

gerrypopplestone

at 13:29 on July 6th, 2008

As long as it's just a common old bug and not a virus!

Paschen

at 09:27 on July 25th, 2008

good stuff:

gerrypopplestone, I like this story. It's good stuff.

Still, we may need more follow up and controls, to insure that the products we buy are what they claim to be! We sell here in Japan Eco product same idea make people buy environmental friendly products and yet it was fund out that due to lack of regulations and lack of enforcement and control as well, many of the so called Eco products where in fact not Eco at all! Rather the opposite! Good story Gerry, thanks!