Fairtrade Update

The problem with Fairtrade is that it's nuanced - and at times hard to seperate the economic logic concerning cause-and-effect with the political intentions that underpin it. As I've said many times before, I'm suspicious of Fairtrade. I've just bought some "Good African Coffee", since I was enticed by their rhetoric and intrigued by their alternative model to Fairtrade. Reading through this Guardian article I can't decide whether the Fairtrade movement should see Good African as friends or foe. A recent Economist article points out the diversity of coffee underlining that Fairtrade vs. non-Fairtrade is an articficial, unhelpful distinction:

“It's a matter of finding the right market for each bean,” says Mr Pollock.

Throughout this more evidence on Fairtrade certification is emerging, as Colleen Berndt now has a few working papers based on her fieldwork (with Clark Durant), visit her research page and find out why the rise of Starbucks coincided with the end of Communism.

My biggest concern is that the Fairtrade movement will move onto a new policy proposal before the dust has settled on this issue. The emerging evidence does seem to corroborate the theoretical problems outlined by Fairtrade critics, but I fear that no-one is listening (where they ever?).

This might not ring any bells for British readers, but in 2004 the US media was obsessed with offshoring (recollect John Kerry's comments on "Benedict Arnold's"), making it one of the key Presidential issues. What's happened since? This Philadelphia Enquirier article takes a look...

Listen to Scott Kirwin, who made a return appearance in December to Wired magazine. Things have changed. He shut down his anti-offshoring Web site in 2006 and has since found himself a better job in the software business. "I don't view outsourcing as the big threat it was," he told the magazine. "In the end, America may be stronger for it."

For every worker who loses their job due to globalisation, a condition of their story being told should be a commitment to follow their attempts to find new work. The initial, short term effects are unfortunate but known - it is their lasting prosperity that matters, and our collective amnesia is telling. Similarly for every coffee farmer thrust into the media spotlight due to the advantages of Fairtrade, we should follow their story. I'm neither a journalist nor a specialist, so I won't be able to contribute, but I'd like to challenge those journalists and specialists on Fairtrade, and on the many other aspects of globalisation: follow the story. Give us case studies that aren't (literally) static snapshots, but evolving narratives. Only then can theory and evidence resolve these debates.

Comments

[APL]

AE: "The problem with Fairtrade is that it's nuanced.."

Maybe, but the real problem is that some unspecified third party gets to arbitrate on what is, or is not 'fair'.

[Jack]

Is the coffee any good?

The link to Colleen Berndt's paper appears to be broken.

What makes the Good African scheme more attractive than Fairtrade?

[AJE]

Jack - I don't think I have any legitimacy to make judgements on coffee quality, but it definitely tastes like coffee. Thanks for the info on Colleen's paper, it's no longer public for copyright reasons but i've put a link to her research page which provides a more detialed overview. As for your last question it was pure intrigue - solely the fact that it sounds similar to Fairtrade but is an alternative.

[Colleen Berndt]

Perhaps I can offer some insight as to the quality of Fair Trade coffee. Because of s;luggish demand for FT, the supply far outstrips the demand. The result is producers can only sell a small portion of their harvest at the Fair Trade Premium. Commonly this amount is around 20%. So..how does this constraint affect quality? Perhaps an example will illuminte it best: A producer has two bags of coffee to sell and only one can be sold as Fair Trade. He knows bag A would be worth $1.40 on the open market, and bag B $1.20. Which should he sell as Fair Trade? If he sells A as Fair Trade, he earns $1.26 + $1.20, or $2.46. If he sells B as Fair Trade, he earns $1.40 + $1.26, or $2.66. Therefore, to maximize his income, he will choose to sell his worst beans, bag B, as Fair Trade. If the farmer knows that no matter the quality of the beans in bag B, he can still sell them for $1.26, he may increase his income by reallocating his resources to boost the quality of bag A. For example, he might stop fertilizing one group of plants and concentrate on improving the quality of the others. The result might be that bag A would sell for $1.50 on the open market, while bag B is locked in at the $1.26 price, even though the quality has gone down. His gain would go from $2.66 for his harvest to $2.76.