Fair trade seeks to promote equity in international trade with an emphasis on protecting the rights of marginalised producers, particularly in the Global South. Can fairness and market forces co-exist? By Kathambi Kinoti
Fair trade is big. According to the Fairtrade Foundation, sales of fair trade products in the United Kingdom increased by 127 per cent in volume and 72 per cent in price between 2006 and 2007. From cocoa from Ghana to rice from India and sugar from Paraguay, the produce of poor people is increasingly finding outlets to Northern consumers who are happy to support what they hope is real transformation in the lives of the poor in far away countries.
Fair trade, say its proponents, has multiple benefits. The cocoa, shea butter or coffee producer earns a fair wage for his or her work, and is not at the mercy of market forces or unscrupulous middlemen. The Fair Trade Federation says that fair trade “seeks to create greater equity and partnership in the international trading system by:
Providing fair wages in the local context,
Supporting safe, healthy, and participatory workplaces,
Supplying financial and technical support to build capacity,
Ensuring environmental sustainability,
Respecting cultural identity,
Offering public accountability and transparency,
Building direct and long-term relationships, and
At the beginning of the fair trade movement, most of the trade consisted of baskets, rugs, beadwork and other handicrafts produced by primarily by women in poor countries. Now agricultural products like cocoa and coffee have overtaken handicrafts and the most profitable coffee shop chains, for instance, all subscribe to fair trade ideals. Women’s labour has long been instrumental in producing both food crops for local consumption and cash crops for more widespread trade. They have lost out on both fronts. At the domestic level their input is undervalued and at the cash crop production and exchange level they have been seemingly invisible. With fair trade, their inequitable work burden is not reduced although they may receive marginally more for their cash crop production.
The shift of focus to agricultural commodities has brought several more players into the picture. Free trade promotes democratic participation and encourages small-scale producers to organise into cooperatives or groups that collectively sell their produce and distribute their earnings equitably. However, what is to stop large companies from going the cooperative way in order to take advantage of fair trade arrangements? Critics say that large-scale plantations that do not directly benefit poor farmers are benefiting from fair trade. Also, although a number of the cooperatives that produce fair trade commodities are women-led and run, such as shea butter producers in West Africa, experience has shown that women’s democratic say is often compromised in such spaces. In regions where food security and sovereignty is in a precarious situation, food crops for local consumption are likely to be abandoned in favour of export commodities.
Another criticism of fair trade is that much of the money is diverted to middlemen, NGOs and retailers. A well meaning consumer activist who buys a premium cup of latte at her local coffee shop may think she is uplifting a poor farmer in Africa or Latin America, but she does not know exactly how much that farmer is benefiting from her purchase. In real terms the money earned by the producers is not much. Steve Daly of the charity Worldwrite asks: "How can a few extra pennies a day from Fairtrade be celebrated as an outstanding achievement for the poor?" The alternative, it is argued, would be improving poor people’s lives by modernising agricultural production methods through mechanisation for instance.
Does the market drive social transformation?
Is integration of the poor into the global market economy the solution, given, among other things, that it is this economy that has fuelled poverty in the first place? Will the few extra cents that a coffee farmer in Ethiopia gets every day through fair trade, make a real impact towards reducing poverty? Writing about the Alliance for a Green Revolution in Africa, Mukoma wa Ngugi says: “Hunger in Africa is mostly a political and economic disparity problem. To end hunger, political stability, proper distribution of food and land within nations, and less emphasis on cash-crop farming and more on food- crop farming will be more effective, friendlier to the environment and less costly than the super-seeds that will require tons of pesticides - and eventually, cost a lot of money.”
Fair trade is a well meaning move towards increasing opportunities for poor producers of goods that have been accorded some value in the global market. However poverty cannot be alleviated without a critical appraisal of the profit-driven global market economy and its ability to really deliver social transformation.