FAIR TRADE Flashcards
What is fair trade?
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”.
What are some criticisms of fair trade?
“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.” The Guardian Provost 2014
Child labour - “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.”
Basically virtue signalling.
“Fairtrade attempts to support and subsidise co-operative groups of ‘smallholder’ producers on the remarkably naïve assumption that the benefits of this support are distributed evenly amongst the group. This assumption about egalitarian distribution is unwarranted.”
Rebuttle?
The Guardian Provost 2014
Fairtrade International said the report’s conclusions were unfair and generalised. “In several places it compares wages and working conditions of workers in areas where small-scale Fairtrade-certified tea and coffee farmers were present with those on large-scale plantations in the same regions,” it said in a statement.
“The report itself identifies farm size, scale and integration into global trade chains as major factors influencing conditions for wage workers, but then its conclusions appear to be based on unfair and distorted comparisons between farms and organisations of dramatically different size, nature and means.
“When comparisons are based more on like-for-like situations, such as the study’s own analysis of Ugandan coffee in small scale coffee production set-ups, it finds key areas where workers in areas with Fairtrade-certified farmer organisations in fact had better conditions compared with those in non-certified, such as free meals, overtime payments and loans and wage advances for workers. This is in sharp contrast to the more generalised conclusions being presented by the School of Oriental and African Studies team.”
What did the MIT study have to say about fair trade? (certification)
One 2015 study in a journal published by the MIT Press concluded that producer benefits were close to zero because there was an oversupply of certification, and only a fraction of produce classified as Fair Trade was actually sold on Fair Trade markets, just enough to recoup the costs of certification.
Booth et al 2007 criticism? (Implementation)
Booth et al 2007 Some research indicates that the implementation of certain fair trade standards can cause greater inequalities in some markets where these rigid rules are inappropriate for the specific market.
Trudel et al 2009 (belief)
Although there is evidence to suggest that consumers buy fair trade goods for a variety of reasons, some are willing to pay more for Fairtrade certified products – for example, in the belief that this helps the very poor.[17] Critics of the Fairtrade brand have argued against the system on an ethical basis, stating that the system diverts profits from the poorest farmers, and that the profit is received by corporate firms.
Kilian et al 2006 criticism? (2%)
US Fairtrade coffee getting $5 per lb extra at retail, of which the exporter would have received only 2%.
Griffiths 2010 criticism? (impact evaluation)
Griffiths (2011) says that very few of the attempts made meet the normal standards for an impact evaluation, such as comparing the before and after situation, having meaningful control groups, allowing for the fact that Fairtrade recruits farmers who are already better off, allowing for the fact that a Fairtrade cooperative receives aid from a dozen other organizations – government departments, aid agencies, donor countries, and NGOs, and allowing for the fact that Fairtrade may harm other farmers. Other serious methodological problems arise in sampling, in comparing prices, and from the fact that the social projects of Fairtrade do not usually aim to produce economic benefits.
Criticism of co-operatives?
Mendoza et al 2003
One reason for low prices is that Fairtrade farmers are forced to sell through a monopsonist cooperative, which may be inefficient or corrupt – certainly some private traders are more efficient than some cooperatives. They cannot choose the buyer who offers the best price, or switch when their cooperative is going bankrupt.
Weitzman 2006 corruption argument against?
Low prices may also occur because the Fair Trade marketing system provides more opportunities for corruption than the normal marketing system, and less possibility of, or incentive for, controlling it. Corruption has been noted in false labelling of coffee as Fairtrade by retailers and by packers in the developing countries
Davis and Crane argument about monitoring marketing and sales?
Marketing, sales and retailing less monitored in structure.
How does it jive with Rawl’s 1971
Doesn’t help the poorest farmers. Must meet certain targets of skill education etc to join.
Therefore perhaps is not organised so that social and economic inequalities are arranged so that they are both to the greatest benefit of the least disadvantaged and attached to offices and positions that are open to all under conditions of fair equal opportunity.
criticism Sylla 2014 - distribution
The unequal distribution of the gains of Fairtrade (FT) derives in a large part from the characteristics of certification. The certification system presents a twofold bias against the poorest developing countries. First, there are considerations related to the costs of certification. These being the same everywhere, they are relatively more expensive for the most disadvantaged countries, all other things being equal. Then, due to its sliding-scale price structure, certification is less costly for large producer organisations than for smaller ones. Finally, the cost of compliance with FT standards (changes in agricultural and administrative practices that often lead to an increase in working hours) is higher for small organisations due to their lower productivity and lower economies of scale.
Sylla 2014 - upper-middle income world bank what percentage?
FT no doubt helps poor and vulnerable producers, but it certainly is not at the service of the poorest. Effective certification demand is positively correlated to country income. Countries ranked by the World Bank as upper middle-income account for 54% of producer organisations having received FT certification against 21% in the case of low-income countries.
