My take on fair trade

Fair trade is a concept I want to embrace whole-heartedly. But I have questions, and I have concerns.

Wikipedia defines fair trade as “a trading partnership, based on dialogue, transparency and respect, which 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 - especially in the South. Fair trade organizations (backed by consumers) are engaged actively in supporting producers, awareness raising and in campaigning for changes in the rules and practice of conventional international trade.”

OK, sounds good. Sustainable development, rights of marginalized workers, securing rights, these all sound like good things.

Basically the way that it works is fair trade purchasers work with producers to figure what it actually costs them to produce the commodity in question, and then set that dollar amount as the starting point for sales of the commodity. So it ensures that farmers don’t have to take a loss if there’s a year in which prices drop. If it’s a year in which the commodity is in high demand, they can still make a profit.

This is important for many reasons, but the one situation that immediately comes to mind for me is the suicides of cotton farmers in India, most particularly in the states of Maharashtra and Andhra Pradesh. There were many, very complicated, reasons that farmers began killing themselves, but to oversimplify, it had to do with the costs of farming versus the small income farmers were earning while the global prices for their product was falling. This led to a cycle of debt and despair, in which it was ultimately more profitable for farmers to take their own lives than it was to continue farming, due to government compensation packages that provided cash payments to the survivors of farmers who had taken their own lives.

Clearly, at least to me, determining what the actual cost of production is, and promising to reimburse the farmers at least that amount should global prices plummet, is a good thing. Why should poor farmers all over the world be taking a financial gamble each planting season just to offer us the chance to buy (or not buy) their goods?

Some critics have argued this creates an artificial subsidy for these products. First, this is a non-argument in my book, as long as we’re subsidizing our own agriculture in this country, how can we criticize a voluntary subsidy undertaken by individuals who make the choice to pay that subsidy each and every time they purchase a chocolate bar or a pound of coffee beans?

The second, and in my mind, more compelling response to this argument of an artificial subsidy is that it’s not the fair trade price floor that creates a price distortion, but rather that the current free trade system is, and has been, creating price distortions for years because of the unequal balance of power between the purchasers (global conglomerates like Nestle, for example) and producers.

Some actually criticize fair trade practices for not going far enough to right this distortion of power, arguing that as long as fair trade continues to negotiate within the status quo, for example, by selling to multi-national corporations, no real change will take place. I’m not convinced that this isn’t true.

I am concerned that fair trade organizations, by implementing a power structure that still leaves farmers and small producers in a position of subservience, have the potential to permanently disenfranchise small producers. In effect, power is being shifted from purchasers (seen as evil, multi-national corporations) to the fair trade labeling organizations (which are seen as much more benevolent) but fundamentally, I’m not sure that from the farmer’s perspective, there has been any actual change in the amount of power they wield – they receive a more equitable price for their crops, but to me, it doesn’t seem that they’ve actually been much empowered.

I hope that the steps being taken now are just the beginning of a journey towards new global economic models in which small producers all over the world eventually learn to bargain and negotiate for themselves rather than always working through North American and European based labeling organizations.

It seems to me that the manner in which this relationship has been established works simply to preserve a relationship that is still, at its roots, imperial in nature. Who will stand up and question whether the best thing for farmers in Ghana to produce is cocoa beans, when almost no chocolate is consumed in Ghana? Why is nobody questioning why Guatemalans are producing tons of bananas, but not eating any?

Maybe I want too much too soon. Maybe I should be glad that there are alternatives out there. I think this is closely connected to larger issues of greenwashing though. Buying a brand new set of organic cotton sheets doesn’t help the environment at all if you don’t even NEED new sheets in the first place. The point is, as long as Ghana is producing cocoa beans and Guatemala is producing bananas, yes, they should be paid fairly for their products – but that cannot be the end of the story. We then have to ask ourselves why it is that we get to decide what these countries produce in the first place. Those of us who make an effort to shop for and eat locally produced items whenever possible are, I believe, taking a step in the right direction. If you’re like me, though, you make an exception for items that cannot be purchase locally – like coffee and chocolate.

Another concern that I have also ties in to issues of imperialism. One area with which fair trade standards are concerned is child labor and education. In my ideal world, children would never have to work to feed themselves or their families. They’d play and go to school and enjoy their childhood. Unfortunately, we live in a world far removed from my ideal. The fair trade standards state that in the production of fair trade goods, it is verified that “The participation of children (if any) does not adversely affect their well-being, security, educational requirements and need for play.”

I think the sentiment behind this idea is lovely. What concerns me is who is deciding what the educational needs of a child are when there are real choices involved between a child’s school attendance and a child’s working to buy food for a hungry family, or to buy medicine for a sick family member? It is appalling that these choices have to be made, but that is the world we live in. Until we have addressed some much more fundamental issues like global hunger, health care, and education, it seems patently naïve to assume that a regulatory body located in North America or Europe is at all qualified to weigh real life or death needs against a child’s educational requirements or need for play.

I also find it a bit too idealistic that they state that “fair trade means that women’s work is properly valued and rewarded.” Again, I think it’s lovely that that is what they are working for, but I don’t believe that there is a place in this world where women’s work is REALLY properly valued and rewarded. But I guess that’s another dissertation altogether, so I’ll leave that one alone for now.

Another concern I have is that fair trade producers don’t have to practice fair trade standards for everything they produce, just everything they produce to be sold under the fair trade label. I have fearful visions of women being sent to pick coffee from the non-fair trade coffee plants so that the farmers can get away with paying them less. I guess I really am cynical, but I don’t see the point in enforcing a standard like equal pay for equal work when it only applies to a portion of the total output.

Lest I sound like I hate the idea of fair trade, now that I’ve aired all my reservations, I will say that in the context of what is available on the current market, I will continue to purchase fair trade items. There are very few things in this life which are perfect, and there are a lot of things that are right about fair trade, not least of which is the sentiment behind the idea. In fairness to the spirit that first inspired the creation of the fair trade labeling system, however, I believe we must acknowledge what work we still need to do in pursuit of a more just and equitable world for all its citizens, and then do that work.

Still a bookworm...

So it's June, and along with Green Bean and the others who are Still Bookworms, I've been working on increasing my ecological IQ by reading an ecologically relevant book.

I just finished reading The No-Nonsense Guide to Fair Trade by David Ransom. I almost always buy fair trade when that option is available, but other than knowing that treating people fairly is a good thing, I don’t really know too much about the details of fair trade and what is actually involved. I also have a few questions and concerns about fair trade that I was hoping to have cleared up after reading this little book (stay tuned for more on this tomorrow).

But alas, no such luck. I guess I should have had a clue when there was no waiting list for this title on paperbackswap. Perhaps I’m not all that smart, but what I heard after reading this book was basically “Free trade is bad. WTO is bad. Structural adjustment programs are bad. Almost all big corporations are bad. The northern world takes unfair advantage of the southern world. Fair trade is good.”

What disappointed me about this book were two things. The first is that he sort of assumes that the reader already knows a fair bit about why free trade, structural adjustment programs, and so forth, unfairly benefit developed nations at the expense of countries in the southern part of the world. I’ve done a fair bit of prior reading, though, so I was able to fill in the gaps with my own knowledge.

The second, and perhaps more disappointing issue with the book, though, is that he never actually makes the link between fair trade and the problems created by free trade, and how fair trade will actually fix those problems. This may be in part due to the fact that he never actually defines what fair trade is in any detail.

The book is basically a collection of anecdotes about producers of coffee, cocoa beans, and bananas all over the world, accompanied by descriptions of how poor they are and how the prices set for their commodities by free trade markets are not enough for them to live on.

I left this book with more questions than I started with, and frankly, I wish I’d invested the time elsewhere on a volume that would have actually answered some questions rather than just giving me mini-bios of fair trade farmers around the world.

Thumbs down - but thumbs up for the challenge! Since June's not over yet, I'm still a bookworm, and I'll post a review of the next title as soon as I'm done with it.