Is fairtrade fair?

Fairtrade initiatives, theory and practice

 Fairtrade initiatives and their proponents claim that the main objective of their philosophy is the creation of a trading partnership that helps and protects the small farmers and producers, as opposed to the principles of the free market where monetary profit is  the end itself¹. To achieve its objectives, fairtrade is using several rules and regulations; a fixed price of produce, a price premium to benefit producers². Also a strict certification procedure that includes standards such as better working conditions and environmental support based on corporate social responsibility³.

Meanwhile criticism of the rules and regulations of fairtrade also exist, as well as concerns for the core ideology behind them. On the subject of certification critics claim that fair trade is being unfair by having standards that fail its own principles (i.e. helping the poorest)⁴. Further more, case studies imply a problematic approach to technology and agricultural development and their benefits to the producer, that lies within the fairtrade model⁵. Other case studies report that rules concerning labour regulations are unjust to the workers as they promote unfair benefits cuts in favour of part-time labour⁴.  Apart from the deconstruction of fairtrade regulations, critics also assert the existence of corruption within the system with several cases that suggest  misappropriation of the price premium⁶.

Fairtrade has also being criticised for its economic model with many supporting that it fails to take into consideration major macroeconomic principles having catastrophic consequences to the market⁷. Finally, the marketing of fairtrade goods to consumers, has been deemed by opponents as controversial, creating a 'guilty concience'⁸ .

Concluding, fairtrade has a great concept to battle poverty and injustice in the third-world, however its implementation and operation, showcases many problems, some of them of fundamental nature.

In my opinion; a great idea yet problematic in practice.

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1. World Fair Trade Organisation, ‘What is fair-trade?’  http://www.wfto.com/index.php?option=com_content&task=view&id=1&Itemid=13
2. Fair Trade Labelling Organisations International, ‘What is fairtrade?’ http://www.fairtrade.net/what_is_fairtrade.html
3. Fair Trade Labelling Organisations International, ‘Benefits of fairtrade’ http://www.fairtrade.net/benefits_of_fairtrade.html
4. M Sidwell, Unfair Trade (Adam Smith Institute, London 2008)

      http://www.adamsmith.org/blog/international/unfair-trade/

5. ‘Mugged: Poverty in your coffee cup’, Oxfam International, 2002 p.18

       http://www.maketradefair.com/assets/english/mugged.pdf

6. P Bahra, ‘Tea workers still waiting to reap Fairtrade benefits;  Premium paid for ethical goods may not be passed on, reports Parminder Bahra’ [2009] London Times http://www.timesonline.co.uk/tol/news/uk/article5429888.ece http://www.lexisnexis.com/uk/nexis/docview/getDocForCuiReq?lni=4V8W-X8W0-TX5B-909P&csi=10939&oc=00240&perma=true
7.  D Henderson, ‘Fair Trade is Counterproductive and Unfair’ (2008) Economic Affairs 6  http://onlinelibrary.wiley.com/doi/10.1111/j.1468-0270.2008.00847.x/full (can be accessed through NORA)
8. K Deconinck, ‘Free marketeers attack Fairtrade principle’ (London 16 March 2004) < http://news.bbc.co.uk/1/hi/business/3542517.stm 

ps. my life lesson out of this?...we as consumers should try and look for what is going on behind the facade, cause some times things are not as good as they seem to be.