The Fair Trade movement has always had its critics, including myself since the 1980s, who have said that it is just a mechanism by which consumers in the rich world can feel better about themselves. It is a movement based around the consumption patterns of the rich and not the needs of the poor.
Recently the Fair Trade movement has come under more scrutiny as its label licensing system now incorporates big companies such as Cadbury and Starbucks, the fear being that these companies are not interested in justice but are simply exploiting a marketing opportunity. The economic pressure of these companies and the dependence of the Fair Trade movement on income from them is, many claim, a recipe for the dilution of Fair Trade principles. These issues are explored here – “The pros and cons of Fair Trade Coffee”
Along with the fear of selling out to major food companies, critics have suggested that Fair Trade does not have the resources to monitor and regulate their producers, allowing for exploitation of workers to continue by certified Fair Trade producers.
A documentary was recently shown in Australia on SBS entitled “The Bitter Taste of Tea” which explores exploitation in tea estates and concludes that in many cases conditions in Fair Trade estates are equally as exploitative as other plantations. That documentary is on a website – http://digital.films.com/play/LSCQKZ#
The basis of the Fair Trade labelling and licensing system is their guarantee… “Guarantees a better deal for third world producers”. These are the magic words that allows the first world to consume coffee without guilt and allows coffee sellers to promote guilt free coffee to their market. With this in mind, I have examined one of the Fair Trade projects, coffee production in East Timor, to see what impact Fair Trade is having that justifies the warm inner glow of coffee consumers.
According to the Fair Trade association of Australia and New Zealand the Cooperative Café Timor (CCT), which has 23,000 farmer members, exported to Aust and NZ approximately $320,000 worth of Fair Trade Coffee. Divided by 23,000 members, this is an average income of approximately $14 per year, $2 of which goes to community projects.
$14 per year = 7 % of the income of the poorest of the poor (aprox $200 per year)
= 1.4% of the minimum wage (aprox $1000 per year)
= .58% of per capita GDP (aprox $2,400 per year)
The economic benefit identified by the Fair Trade website does not seem to take into account the cost of production to farmers or administrative costs of the CCT which must be deducted from the income to get a true picture of benefit to the farmer.
Fair Trade Aus/NZ promotes the CCT health program as a way that Fair Trade is supporting the farmers. CCT directs part of its Fair Trade premium to a rural primary health care service. Between 2004 and 2008 the CCT Fair Trade premium was $170,351 (average $42, 587 per year), which went towards the health service, a business education program and a consumer goods wholesaling business.
The health program services 115,000 people and provides free health care to coffee farmers.
Although the Health Service is promoted on the Fair Trade website, it is not a Fair Trade project. It is a project of the National Cooperative Business Association (NCBA) in conjunction with the CCT. It is funded by United States Aid, as is the development of coffee producer co-operatives.
It is the NCBA that has been rebuilding the coffee industry and organising for the needs of coffee producers such as health care. The NCBA co-operatives employ 300 full time staff and 3,900 seasonal workers and are the single largest private employer in East Timor.
All Fair Trade seems to have done in East Timor is attach itself to a U.S. aid project with tokenistic and minimal “benefits” in order to justify the Fair Trade label as an advertising gimmick to sell coffee in the rich world.
In the 1980s the World Vision model of child sponsorship came under intense scrutiny. The criticism included the religious and political affiliations of World Vision but the primary criticism was that the program was designed to fulfil the needs of rich sponsors rather than the poor target communities. More and more resources were spent on communicating with sponsors in order to secure their continued payments and less and less spent on real aid on the ground. The focus on children was maintained as the most effective marketing device rather than any real strategy to tackle poverty.
It is time to take a similar critical look at Fair Trade to identify whose interests are really being served – the egos of the rich, the marketing departments of western coffee distributors or the needs of third world communities?