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Is Fair Trade Really Fair?

Is Fair Trade Really Fair?

By Hui Cao


The fair trade movement is oriented around the intention of helping provide create a more equitable trading environment and improve sustainability for producers in developing countries. Take fair trade coffee as an example. Consumers have increasingly embraced coffee with a fair trade mark on its cover. According to The Guardian contributor Rebecca Smithers’s statistics, “[i]n the UK, sales grew from £1.5bn to £1.8bn, despite the ongoing impact of the recession on shoppers’ disposable incomes.”

Much credit has been given to this movement. By examining cases in northern Nicaragua, author Karla Utting-chamorro concludes that “fair trade is having some positive impact and is an important element of the ‘coping strategies’ to reduce farmers’ exposure or vulnerability to the conventional international coffee market.”

Plausible doubt is also put forward regarding the extent of sustainable fair trade. Booth points out that research has shown evidence that only 25% of the extra fees that consumers pay for have ended up in the hand of the producers in developing countries. If so, is fair trade really fair to the supposed beneficiaries as well as overly-charged consumers?

I believe that fair trade ethically kidnaps consumers to pay the bill for the production chains. Between the producers, down to consumers at the other end of the production chain, there are many parties profiting in between. But as the fair trade products are introduced to consumers, consumers are encouraged to believe that it is their duty to help struggling producers and bring about positive change by paying more for fair trade products. Consumers show a strong willingness to pay a higher price for that ethical comfort. Yet most consumers are unaware of where the money goes. Consumers would be unlikely to pay higher prices for fair trade products if they discover that only about a quarter of consumers’ payment reaches the producers.

Fault largely lies with large corporations who squeeze poor producers in developing countries. They push down the price of purchasing raw materials while taking get the majority of the profits in each sale. They set an ethical trap for consumers to fall for, winning a good reputation in the process of promoting fair trade goods.

Throughout the process, the poor producers are the true victims. Producing takes a lot of labor and time, and even so, many farmers can barely make ends meet. Though fair trade companies seem to help farmers, they actually impose a lot of product requirements on the farmers. Generally, larger plantations are more likely to qualify as fair trade members. In order to be considered, small private producers have to change many aspects of their production. Even if they are accepted, many producers only earn 25% of what consumers pay for their product, meaning that producers can barely make up for the cost of transforming their methods of production.

Hence, through the analysis above, a conclusion is drawn that the fair trade movement is indeed not fair, both to poor producers and to ethically kidnapped consumers.

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