Is fairtrade fair?

There are approximately 20 initiatives, who claim that their objective is to support ‘a trading partnership, based on dialogue, transparency and respect, that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers’.[1]

Four of the main initiatives are the World Fair Trade Organization (WFTO)[2], the Fairtrade Labelling Organisations Internationally (FLO)[3], the Network of European Worldshops (NEW)[4] and the European Fair Trade Association (EFTA)[5].

The concept of fair-trade seemed to be an effective response to the problems faced by farmers and workers. However, this approach has generated various criticisms. Some claim that FLO rules promote part time working instead of full time. In other words, that the farmers are getting cheaper labour while the workers are getting no access to benefits (normally given to full time workers).[6] Moreover, there are allegations which refer to ignorance regarding the fair-trade premium from the part of producers and workers.[7] There is evidence that premium does not reach farmers and workers as it should.[8] What is more, fair-trade initiatives have been accused of not promoting technological development.[9] Meanwhile, Flo refuses accusations by stating that they comply with ISO 65 requirements[10] and also that they are educating producers of their rights[11]. In the meantime, some farmers in China instead of taking their premium (i.e. a percentage of the product’s price being given back to the producer to be used for education, healthcare, community development) they received thermos, laundry baskets and cylinders.[12] Furthermore, some critics support the view that fair-trade is trying to create ‘guilty conscience’[13] to consumers in order to create ‘moral monopoly’[14]. Quality issues are also at stake with Hal Weitzman suggesting that insiders report that non certified coffee is reaching consumers as fair-trade.[15]

It is concluded, that fair-trade is a very good concept which lacks in its practical application. Hopefully, these insufficiencies are reversible and the organisations will improve them in years to come.

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[1] World Fair Trade Organisation, ‘What is fair-trade?’  <http://www.wfto.com/index.php?option=com_content&task=view&id=1&Itemid=13> accessed 16 October 2010

[2] World Fair Trade Organisation,  <http://www.wfto.com > accessed 16 October 2010

[3]  Labelling Organisations Internationally , < http://www.fairtrade.net/ > accessed 16 October 2010

[4]Network of European Worldshops, <http://www.crossing-borders-fair-trade.com/network-of-european-worldshops.html> accessed 24 October 2010

[5] European Fair Trade Association, < http://www.european-fair-trade-association.org/efta/ > accessed 24 October 2010

[6] D Henderson, ‘Fair Trade is Counterproductive and Unfair’ (2008) Economic Affairs 62-64 ,cited in A M Smith, Evaluating the criticisms of fair trade, Oxford: Blackwell Publishing, 2009, p.30

< http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0270.2009.01944.x/pdf> accessed 16 October 2010

[7] P Bahra, ‘Tea workers still waiting to reap Fairtrade benefits;  Premium paid for ethical goods may not be passed on, reports Parminder Bahra’ [2009] London Times http://www.lexisnexis.com/uk/nexis/docview/getDocForCuiReq?lni=4V8W-X8W0-TX5B-909P&csi=10939&oc=00240&perma=true accessed 17 October 2010

[8] ‘Voting with your trolley’, Economist 7/12/06, cited in M Sidwell, Unfair Trade, London: Adam Smith Institute, 2008 <http://www.adamsmith.org/blog/international/unfair-trade/> accessed 18 October 2010

[9] M Sidwell, Unfair Trade (Adam Smith Institute, London 2008) <http://www.adamsmith.org/blog/international/unfair-trade/> accessed 18 October 2010; B O’Neill, ‘How fair is Fairtrade?’  <http://news.bbc.co.uk/1/hi/magazine/6426417.stm> accessed 17 October 2010 

[10] Flo-Cert, ‘ISO 65 Accreditation’ <http://www.flo-cert.net/flo-cert/main.php?lg=en > accessed 19 October 2010

[11] N 7

[12] ibid

[13] Fairtrade Foundation, ‘British sense of fair play helps workers in the developing world’

<http://www.fairtrade.org.uk/press_office/press_releases_and_statements/may_2010/millions_of_uk_consumers_punish_businesses_who_dont_treat_workers_fairly.aspx> accessed 17 October

[14] K Deconinck, ‘Free marketeers attack Fairtrade principle’ (London 16 March 2004) < http://news.bbc.co.uk/1/hi/business/3542517.stm> accessed 16 October

[15] Fair Deal Trading, ‘About us’ < http://www.fairdealtrading.com/about.htm > accessed 16 October 2010