Fairtrade really so ‘fair’ after all?

Leading thinktank, the Adam Smith Institute (ASI), today proclaimed the fair trade movement as barely more than marketing hype, benefiting a marginal amount of farmers in developing countries at the expense of others.

The critical report by the ASI was released to coincide with the beginning of the annual Fairtrade Fortnight. The report warns that fair trade seems to be a type of marketing that aims at continuing fair trade’s supremacy in the marketplace.

The report went on to claim that fair trade is in actuality unfair, offering only a small number of farmers a higher, fixed price for their ethical products including coffee, bananas, and tea.

It declares that the majority of farmers who are unable to obtain Fairtrade certification are left even worse off; as a result of the higher, fixed prices.

New statistics indicate that British shoppers’ interest in fair trade in the previous five years has more than doubled. According to the analysts IGD, roughly a quarter of shoppers say they have purchased fair trade products, an 11% increase from 2003. IGD further forecasts that growth on annual spending on fair trade products will reach 11% and will total £585million by 2012.

Senior consumer analyst at IGD, Gerardine Padbury claimed that fair trade purchases will remain high, even through an economic downturn. She claimed this was a result of a renewed peoples’ interest in how their food is produced and exactly where it comes from. Research showed that only 6% of shoppers stated that they would cut back on ethical buys as a result of a smaller household budget.

Yet Marc Sidwell’s ASI report, Unfair Trade, reveals the actual realities of the movement. It points out that a majority of farmers aided by fair trade are in Mexico, a country that is fairly developed. In contrast in countries such as Ethiopia, that is slightly less developed, farmers are helped less.

The report states that of all the produce from Fairtrade certified farmers, four- fifths end up in non-fair trade goods and generally only 10% of the premium that is paid by consumers for fair trade in fact goes to the producer.

Tom Clougherty, ASI’s policy director, spoke of fair trade being at its best simply a marketing device that doesn’t really benefit the poor and at worst as potentially harming some of the world’s most vulnerable people.

He suggested that to actually aid international development barriers to trade in the third world should be abolished. He then claimed that free trade is the world’s most effective poverty reduction strategy.

However the director of the Fairtrade Foundation, Harriet Lamb, spoke of the huge difference fair trade has made to over seven million peoples’ lives in the developing world. She spoke of the many more people that the foundation would still like to reach.