A Fair Argument for Fair Trade

Check out Fair Trade Canada’s response below to Larry Solomon’s article in the National Post last week that argued the ineffectiveness of the fair trade system. Read Solomon’s article here.

Fairtrade aims to offer producers a better deal and improved terms of trade. We are constantly working to deepen Fairtrade’s impact on producers and we welcome rigorous research and healthy debate around these issues. Lawrence Solomon’s criticism of the system in his May 14th article “Fair-trade coffee fix”, however, is highly flawed.

Firstly, Mr. Solomon claims that a recent study in northern Nicaragua indicates that Fairtrade coffee may help to impoverish farmers. What he neglects to mention is that the Fairtrade producers studied received higher farm-gate prices than conventional producers and that significant production losses (unrelated to Fairtrade) may have accounted for revenue loss. While the study’s findings may highlight the need for further research, Mr. Solomon‘s suggestion that these results are generalizable is inaccurate, given that the authors conclude that the study results cannot be applied to regions beyond the study area.

Secondly, Mr. Solomon purports that Fairtrade discriminates against the poorest of the world’s coffee farmers, many of whom are in Africa, through high certification fees. While it does cost money to uphold the system’s rigorous certification standards, these costs are split amongst the hundreds or thousands of members that belong to the co-operative. Fairtrade International offers funding for impoverished producers to meet up to 75% of the cost for poorest producers through its Producer Certification Fund. In addition, according to Fairtrade International’s 2008 figures, 60% of Fairtrade individual farmers and workers are, in fact, based in Africa.

Thirdly, Mr. Solomon again criticizes the Fairtrade certification system as being “lax and almost impossible to police.” FLO-Cert, an independent organization that conducts rigorous producer audits, ensures that relevant social and environmental standards are met and that producers receive the Fairtrade guaranteed price and premium. FLO-Cert is ISO 65 certified, and ISO 65 is the leading, internationally recognized quality norm for bodies operating a product certification system.

Finally, there is indeed a reason why many Fairtrade merchants refer to the additional benefits of Fairtrade: Fairtrade is about much more than price.

Beyond a minimum floor price that protects coffee producers from the volatility of world markets, organizations receive an additional sum of money called the Fairtrade premium. This money goes into a communal fund for workers and farmers to use to improve their social, economic and environmental conditions. Smallholder producers, as landowners who choose to join democratically-owned co-operatives, are in the best position to determine how to meet their own needs. As such, these individuals determine how the premium will be spent, investing in, for example, education and healthcare, farm improvements to increase yield and quality, or processing facilities to increase income. In 2009 alone, the Fairtrade system returned €53 Million to producers in Fairtrade premiums.

And there’s much more to Fair Trade, such as access to credit, long term contracts, transparency and accountability, the prohibition of forced and child labour, gender equity and environmental sustainability. Needless to say, Mr. Solomon is wrong in saying that consumers have something to feel guilty about. Globally, consumers spent €3.4 Billion on Fairtrade products in 2009, contributing to a market-based system that benefits more than 1.2 million farmers, workers and their families, and recently joined in celebrating Fair Trade Fortnight and World Fair Trade Day across Canada. We’d call that something to feel great about.

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