Fair Trade is a Bitter Brew for Anti-Capitalists

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Remember when buying fair trade meant something revolutionary? These days, purchasing fair trade products is about as subversive as wearing a Rage Against the Machine t-shirt. Heck, you’ll even be able to add “one-of-a-kind handicrafts made by artisans in developing countries” to your online shopping cart on WalMart’s website, according to Huffington Post.

Coffee was one of the first–and most effectively marketed–fair trade products. As I write this, I’m finishing my fourth cup of fair trade coffee this morning–we usually brew two massive pots every day at the Utne Reader office. But fair trade coffee, a certified product meant to supplant the neo-colonial exploitation of farmers in the global South, has done little to impress free trade skeptics and anti-capitalists.

“While it may channel slightly more income into agricultural communities,” writes Ian Hussey for Briarpatch, a feisty, radical Canadian magazine, “it ultimately fails to address the colonial capitalist structures that produce the impoverishment of farmers on an ongoing basis.”

Hussey goes on to bullet-point the moral problems and historical discrepancies that color fair trade economics–including the hemispheric imbalance of international power, ambiguous certification rights, romanticization of the lives of the impoverished, creation of a moral higher ground, and perhaps most important of all, the misperception that buying fair trade is anything but another form of consumerism.

Where Hussey’s screed is brief and boisterous, Sushil Mohan’s Fair Trade Without the Froth, a book published in 2010, is detailed and “dispassionate.” Mohan attempts to determine how beneficial the fair trade movement has been to farmers in underdeveloped countries with a cool, non-ideological, scholarly eye. In the book, Mohan argues against the pot shots lobbed by both fair trade’s supporters and detractors.

One of Mohan’s most interesting lines of research pertains to fair trade supporters’ claim that the monetary markup of certified coffee trickles down to the farmers in Ethiopia and Colombia. As summarized by Karol C. Boudreaux in a review of the book in The Independent Journal:

Unfortunately, the transaction costs associated with the certification process, exporting, marketing, and retailing eat substantially into any benefits producers might receive. Empirical evidence on this point is limited, but it seems that even in the most generous scenario fair-trade producers retain only 25 percent of the price premium; most probably retain significantly less.

“So,” as Boudreaux continues, “contrary to claims, it is not fair trade per se that guarantees producers a steady income; only consumers can do so.”

Swallow that, ethical shoppers.

Sources: Briarpatch, Huffington Post, The Independent Journal

Image by matt.davis, licensed under Creative Commons.

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