Fairtrade 'does more harm than good to Third World countries', says think tank

[busybeeburns]

The "ethical" brand Fairtrade, backed by A-list celebrities and £2million of taxpayers' cash, leaves Third World farmers worse off, according to a damning new report.

 

Huge publicity, including a Government-sponsored education campaign in schools, has attempted to persuade the public to pay more for goods such as coffee, chocolate and bananas to ensure a better deal for producers in impoverished nations.

 

And stars such as Coldplay singer Chris Martin have been queuing up to endorse its products.

 

But an investigation by the Adam Smith Institute, the highly respected Right-wing think-tank, claims that Fairtrade's efforts to help African and Central American farmers do more harm than good.

 

 

Fair play? Chris Martin visits a farmer's cooperative in Mexico in 2003

 

The Fairtrade Mark – familiar to anyone who shops in Britain's leading supermarkets – guarantees that producers in developing countries receive a fair price for their goods.

 

Last year, British consumers spent more than £300million on Fairtrade products.

 

But the report Unfair Trade claims that the organisation's "positive image appears to rely more on public relations than research".

 

It adds:

 

• Fairtrade helps only a very small number of farmers while leaving the majority worse off.

• It favours producers in better-off nations such as Mexico, rather than poor African countries.

• It holds back economic development, paying inefficient cooperative farms and discouraging diversification and mechanisation.

• Supermarket chains profit more from the higher price of Fairtrade goods than farmers.

• Only a fifth of produce grown on Fairtrade-approved farms is actually purchased at its guaranteed fair price.

 

Tom Clougherty, policy director of the Adam Smith Institute, says: "At best, fair trade is a marketing device that does the poor little good. At worst, it may inadvertently be harming some of the planet's most vulnerable people."

 

Most damning of all, the report claims that Fairtrade is hurting the poorest group of all in the production process of its goods – the casual labourers hired by farmers to pick the bananas, coffee and cotton. Last night, Harriet Lamb, UK executive director of Fairtrade, said: "Of course, Fairtrade is not perfect and has not solved all the world's problems. But the Institute is condemning us for trying."

 

http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=517823&in_page_id=1811

[yellowtalk]

what? how? really? can someone explain to me...will fairtrade issues a statement?

[chuck kottke]

Wolves in sheeps clothing..

 

I am immediately alerted to the name of the institute - "The Adam Smith Institute" - and if anyone knows what Adam Smith believed - essentially that the "silent hand" of the market raises all boats, and unfettered free trade did the best for everyone. Basically, laissez faire trade - it's a recipe for making the rich richer, the poor poorer; sullying the environment, and mistreating the workers. (because no regulation means no government oversight - i.e.- no referee in the process)

So, coming from a so-called "highly respected right-wing think tank" should have everyone's antennae up - that's like saying a "highly-respected crime organization" that thinks about our well being! I would trust them no further than you can throw their bosses!

Recalling one "highly respected Right-wing think tank" called the Hudson Institute, and their smear campaign on Organic food, I can only say that they are wolves dressed in sheep's clothing. They act and sound official and honest, and are instead a front for the corporate monsters damaging the planet's ecosystems, the workers, and the consumers! Another bunch of bad apples.

So, it's all lies I'm betting, especially since the "Right" has an agenda to stop fair-trade, and diss anyone involved in it. Perhaps the shade-grown coffee and cocoa beans are seen as hurting workers, because they would argue it's better to just clear all the forest, spray with their toxic brew of pesticides, and use artificial fertilizers galore to pump up industry profits? Sure, the wildlife, worker's health, and the healthiness of the product suffers - but perhaps the workers would get 1 cent more per hour (and cancer)? Is that improvement? Fair Trade was set up to address some of the practices which are deplorable - recalling that without Fair Trade, there were slaves used to grow some of the crops - hence, the "free market" BS they try and say raises all boats! Ya, what a bunch of bunk! To me, the only right way is to have honest governments and organizations, that work for the people to do their bidding, and act as referees, overseeing the honest practices which stand the test of ethical behavior which should be allowed to enter the marketplace - to reward the good companies, and punish the bad ones, and allow competition based on ethical standards to be in play. Which is actually what Fair Trade really stands for. So, anytime someone puts qualifiers like "the Respected Right-wing Think Tank" in their name, begin to question it. It's a trap, to convince us through language that they're on the side of justice, when often they're really anything but that!

And they lied about Organic Agriculture, so they'll lie about anything else they damn well please!

[chuck kottke]

I'll check on the Adam Smith Institute's funding (what little they might disclose). I'm betting it's a shell operation for agri-chem-investment and global agricultural firms, who want to squash all competition.;)

[chuck kottke]

Truth behind the wolves' coat of Adam Smith Inn..

 

"According to a 1992 internal Phillip Morris memo written by Craig Fuller of Phillip Morris , PM worked with ASI (Adam Smith Institute) on creating an international center to train journalists to be "ideologically" consistent with PM's issues and interests. "The journalist training center model was based on similar programs successfully implemented a the PM supported National Journalism Center in Washington, D.C."

excerpted from http://www.sourcewatch.org. look for Adam Smith Institute, and get the real deal on this monster of an outfit.

[Corricopatcat]

Rather than attacking the people and organizations adhominem, why not address the IDEAS?

 

Seems to me, by subsidizing local farmers either directly (though cash payments), or through protectionist tariffs or through political connections---all of which have historically led to deep corruption---protectionist policies cause other harmful outcomes... I can think of a few offhand: Firstly, it punishes the poor. It causes prices to remain higher than they would be if imports from other places more efficient in production were allowed in at a freely traded price. Or it might even increase prices. In countries where people often are starving, seems a bit churlish to create an elite and give them special protection at the expense of hungry people. Secondly, it rewards the inefficient, and discourages productivity. This reduces competitiveness that would lead to cheaper products.

 

The unfortunate people who live in these countries are victims of greedy politicians who raid the taxpayers and suck the lifeblood, ambition and thwart the creativity of their people when they are not directly murdering them. Free trade is the least of their problems.

 

It reminds me of the stupid laws restricting sugar imports to this country in favor of US beet producers... You can't get a coke with sugar in it without going to Mexico! And a coke made with corn syrup doesn't taste good. Thank the gods that we here are not in dire straits, so I can just choose to drink something else. The politically-motivated trade restrictions between the USA and sugar-producing Cuba are indefensible, too, and in my opinion are retarding the eventual evolution of their system into something freer.

 

In fact, the more government intervention there is in the free market, the more motivation there is for bribery and corruption (expressed here as lobbying), eventually leading to government/corporate fascism. If the politicians don't have the powere to pick winners and losers, and restrain their efforts to a rule of minimal law and justce, the free market can operate properly.

 

Think over my comments, or not. I just felt another view needed airing. :kiss:

[fakfak]

Corrico,

While I will agree that you raise some valid points that have been overlooked by many here, allow me to take issue with some of what you said (while agreeing with other bits).

First, saying that there is inherent corruption in a system that will hurt some people it's supposedly helping seems to me to be a bit of a non starter. Perhaps I've a bit naive, but it seems to me that that could be said about any system you put into place to deal with any social issue such as this. When practiced fairly, and (to some degree), fairly regulated, free market capitalism is, all things considered, a fairly good way to distribute limited resources. However, even the staunchest defender of said must admit that there are, in such a system, a number of people who are hurt by the vagaries of the system through little to no fault of their own. Hence the appeal of alternative economic ideologies, most especially to many of the poorest and most dispossessed among us. That these systems carry their own set of problems, often worse then those they were intended to stamp out is largely immaterial in all practical sense. Human nature is such that greed, corruption, elitism, etc. will always be present in any system and we are forced to deal with these issues "stop-gap" as best we can. (sorry if this doesn't make clear sense, I'm tired and my brain is working faster then my ability to word thoughts at the moment...)

 

Secondly, while I agree that to some extent protectionist measures do limit competition which in ordinary scenarios will retard growth and hurt the poor in the long run, the ability to experience this kind of growth and the benefits it provides are contingent on a basic level of infrastructure which in many cases is simply not present in the types of nations/economies things like Fairtrade benefit most. To wit: It is indeed better to teach a man how to fish, but it is also necessary to provide him with enough fish to feed him through the learning process. To my understanding, Fairtrade exists not as a permanent solution, but rather to serve as a bridge to enable people to survive while the ultimate (and slow) goal of reform on the governmental/economic level is implemented.

 

On political embargo's etc. We agree. The Cuban government, to use your example, has for years been able to channel their populace's dissatisfaction with governmental issues into hatred of the U.S. led trade embargo, which I believe was your central point.

 

Lastly, regardless of the pure validity of the issues at hand (or lack thereof depending on your perspective), I must contend that it is in fact extremely valid to criticize the biased nature of the group that released this study. The simple fact is, they are directly bankrolled by corporations whose bottom line is directly effected (positively) by the downfall of fairtrade initiatives.

 

Like you said, do with these views what you will, just wanted to contribute my two cents...

[Pseudonym]

You see this is why I don't get involved in politcs. I obviously want to end poverty in the world, I am a ONE supporter. But Make Trade Fair sometimes isn't always the best solution. I completely respect and understand Chris Martin in his involvement in MTF, but there are too many downsides to organizations like these. That's why I put my effort towards supporting AIDS research and relief, fighting starvation by donating food, and just trying to help as many people as possible without hurting anyone else. All the respect in the world for Coldplay and Chris, but I personally like to support charities that I know will directly help as many peole as possible.

[fakfak]

That's a perfectly rational attitude. the only people I personally take issue with are the idiots (and frankly they are IDIOTS) who have the gall to suggest that we shouldn't even TRY to help people, because there may be some problems with any solution.

 

Ask them what they would do and they'll usually spout off something along the lines of "for the market to work, there must be people at the bottom as well as the top" Funny thing is though, the people who say things like this are (by definition) at the relative top of the spectrum. People who are starving could give a d#$% about they GDP index, they just want to eat...

 

As I said in my previous post, fairtrade is far from perfect, but it's really low to critisize people for trying to make things better...

 

(climbs down off soapbox...)

[Pseudonym]

I agree, I think it's great that theyre all trying so hard and I hope it can all work out

[chuck kottke]

Put faith in honest campaigns = Fair Trade Improves

 

Where I come from is seeing root causes - has anyone else seen Jared Diamond's Guns, Germs and Steel? This tells us more than just looking at what seems apparent - it explains the ongoing effects of colonialism on the southern hemisphere, and what we need to do in the "developed" nations to make things better for everyone. I agree with both of you, but I have become acutely aware of the right-wing corporate agenda, and it's attempts to paint a false image of the truth - to distort things for political purposes. If multi-national companies stand to loose profits and control from Fair Trade practices, they will try all avenues to dissuade through negative press (and sometimes pure lies) the general public, in order to further their agendas. Believe me, they do this by publishing false accusations as verbatim truths, and mainly to shift focus away from their questionable practices. Fair Trade is there to improve the lives of those subsistence farmers, and to help keep the Earth's ecological diversity alive as well. Yes, there is a substantial markup, which I find a bit disingenuous, but that's an artifact of limited competition between wholesalers & retailers, which seems to be changing as demand grows, and more organizations enter the marketplace.

Checks and balances, and root causes and cures - I believe, if we put more emphasis on clean elections and limit campaign funding to smaller, affordable contribution amounts, we get representatives that work for the best interests of the whole, and not just those with a favor to get through money (ie - look at Barack Obama's support, for example - lots of small contributions, and he will likely do what's best for everyone then). Hence, restoring honest government restores the referee in the picture, and then trade agreements can be worked to favor the best interests of the people - ultimately finding a better path to reward honest brokers, and reprimand the bad actors economically. Free markets sound great, but I see them as represented by the current US stock market - not enough regulation to make it fair, and the shell games get out of hand, and a lot of average people get hurt. So, make the referee fair and effective, and the process helps everyone, as it should - the best rise in the process.

The secret is to keep the government as honest as possible - a task indeed, but one with great rewards, and then the lives of everyone improves

when the referee does its job, sans the blinders and bribes.

 

Free Trade is anarchy, which allows only the worst to rule; Fair Trade is justice, with a clear conscious guiding the ship of the marketplace away from the rocky shoals.

 

 

[Black Rose]

Supermarket chains profit more from the higher price of Fairtrade goods than farmers.

 

True, the raw cost price from the suppliers to the supermarkets has Fairtrade at a couple pence more expensive than normal, but when supermarkets sell Fairtrade stuff, they charge a larger premium = more profit for the shareholders.

[gloria002]

You see this is why I don't get involved in politcs. I obviously want to end poverty in the world, I am a ONE supporter. But Make Trade Fair sometimes isn't always the best solution. I completely respect and understand Chris Martin in his involvement in MTF, but there are too many downsides to organizations like these. That's why I put my effort towards supporting AIDS research and relief, fighting starvation by donating food, and just trying to help as many people as possible without hurting anyone else. All the respect in the world for Coldplay and Chris, but I personally like to support charities that I know will directly help as many peole as possible.

 

If you're fond of direct aid, allow me to guide you to www.kiva.org

Microfinance. the best thing since sliced bread if anyone asks me :-)

[chuck kottke]

True - direct aid is essential as well. I think though, in the long run, working towards more honest governments everywhere will make the process fair between the hemispheres - at least improve the negotiated treaties, to give those people in need a better chance. It's really good to be involved in reform and education, to work towards more honest government as well - but for the immediate, yes charities that offer direct assistance do the most immediate good. Oxfam is basically the Fair Trade charity - so there's a combination of Fair Trade and on-the-ground direct aid involved..

Yes, the microfinance does a great deal of good too!! Right now, I need to keep my own head above water as well though.. I will give as I can;).

[chuck kottke]

Going around the chains.

 

True, the raw cost price from the suppliers to the supermarkets has Fairtrade at a couple pence more expensive than normal, but when supermarkets sell Fairtrade stuff, they charge a larger premium = more profit for the shareholders.

David, you are so right! But some of my neighbors are still farming, and they're going to go right around the chains - by getting the equipment and making their own certifiable dairy, egg, and produce products. I should get in touch with them, to sell the products through the co-op we have. True - it's the chains that get the lion's share of the profits - but there are ways around their greed.;)

And again, I keep thinking about the importance of honest government - checking the power of chains and giant conglomerates in the food business. We truly need our governments to work on behalf of the citizenry, else we get the problems we have...