The term ‘fair trade’ and the “Fairtrade” brand have become much more well known in recent years, but maybe less understood. A fair trade between consumer and producer of course represents the holy grail of production, farming and trading best practice, a transformational approach that has the ability to improve the condition of the farmers and workers in poorer producer countries. But the attempt to achieve this through the Fairtrade Organisation and the ideas behind it have also been the subject of much criticism due to the range of controversial issues it raises.
The scheme was originally set up with the idealistic mission of providing “better prices, decent working conditions, local sustainability and fair terms of trade for farmers and workers in the developing world”. Farmers who pay for Fairtrade certification are assured a minimum price for their beans – which can never fall below market level – and a premium on top to invest in their communities.
Before going on, we should point out that Fairtrade is not a system Jones Brothers Coffee supports and for some good reasons. The reality is that many of us consumers pick up items in the supermarket on sight of the Fairtrade symbol. We believe that somehow this means we’re contributing more directly to the farmers and workers in the developing world. But, at Jones Brothers we believe, like many others, that the Fairtrade system could easily be renamed “Unfair-trade”.
Here’s why. Very often, brokers, coffee suppliers and particularly retailers just see Fairtrade items as a reason to raise prices higher to the consumer in order to generate greater profit for themselves. There is no regulatory or enforcing body in place to ensure that a percentage of the additional profits generated are returned to the farmers. Put simply, by buying Fairtrade, the ‘good’ you are doing is often just the lining of the retailers pockets.
Secondly, the Fairtrade system guarantees a minimum price for farmers, but not a minimum quality – so Fairtrade labelled coffee can often be of lower quality. The humble coffee bean is a commodity with prices moving up and down on international markets, and as such market prices can often be above the guaranteed minimum price from Fairtrade, as coffee buyers are buying based on quality at market rates.
This means that Fairtrade coffee continues to occupy a very low percentage of overall traded coffee! This is paricularly acute in a situation of rising market prices, the result for example of drought and lower crop yields in big coffee growing countries like Brazil, the world’s biggest producer and exporter. The Fairtrade system becomes practically null and void when their lower quality coffees are competing on the commodity market at the same price.
So the Fairtrade system very often offers little security to these farmers, who can become locked into the system. Or, the benefits are focussed around just a select few farmers who grow bigger and then are able to unfairly compete against their neighbour.
And Fairtrade certainly doesn’t provide a long term safety net to help poorer farmers earn a better living. Because if prices rise, then volumes for these certified farmers could fall.
Fairtrade has been accused by many as an example of western society feel-good tokenism that holds back modernisation in developing economies.
This topic is huge of course, generating strong opinions on both sides of the argument but at Jones Brothers we feel there are better alternatives that contribute more directly to the long term welfare of farmers and their families.
The next time you find yourself browsing the shelves at the supermarket, think twice before picking out the item with the Fairtrade logo. It might try to swing your moral compass but hopefully, you know now better!
The Bean Team
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