How Fair is Fair Trade?

Like many Churches and other organisations, St James recently managed to get awarded FairTrade status having ensured that we make use of fairly traded products such as the coffee and tea we serve after services.

With all the push to encourage more use of fair trade products, it was interesting to see tonight’s edition of the Money Programme, which looked at the whole phenomenon of fair trade, and particularly now that the large supermarket chains prominently stock fair trade goods.

It has to be said that the thrust of the programme was not at the concept of fair trade, but more a fairly heavy implication that the big supermarkets are using it as an opportunity to make more money from consumers. It is worth pointing out – and this was confirmed by the deputy director of the Fairtrade Foundation – that the only thing they guarantee is that the original producer of the produce is getting a fair price. Whilst most people are assuming that the extra money that we pay for fair trade products is going to the third world, it seems that the sums don’t quite add up.

The programme included several contributions from John McCabe, who has been saying for a number of years that supermarkets are overcharging for Fairtrade. The programme used the example of bananas, where they first looked at loose bananas, where the loose Fairtrade bananas, only sold by Waitrose, seemed to reflect pretty closely the difference in the amount the farmers were paid. However the pre-packaged Fairtrade bananas were significantly more expensive, and the supermarkets were unwilling to discuss where the extra money was going.

The programme then looked at coffee, where the average price of a Fairtrade brand was about 50p more than a regular packet – and yet the coffee growers see only a fraction of that. A professional coffee expert appeared and said that there was pretty well no difference between the regular and Fairtrade brands in terms of quality, nor packaging. Again the question was left hanging, where is all the extra money going?

John McCabe sums up the feelings of many people who buy fairtrade:

“What I’d like to see is the whole premium going back to producer, and that being the only difference between non Fairtrade and Fairtrade.â€?

When you think about it, to supermarkets such as Tesco, Fairtrade is almost just another product line, in the same way as they sell the value and Finest lines, organic and healthy eating lines. As with the other lines, it seems to be about marketing – labelling something as Fairtrade appeals to a growing group of consumers, consumers who are willing to pay a little extra to support people in the third world. It saddens me that it seems that big businesses that make millions of pounds profit appear to be charging the prices that people are willing to pay, and it seems generating more profit for themselves, rather than passing on the additional money the consumers have spent to the producers.

This idea that Fairtrade is becoming a marketing ploy has been further enforced by the news that Nestle, still subject to a boycott over their baby milk, and after years of claiming that Fairtrade was bad for the industry, have changed their mind, and are now producing Fairtrade Nescafe. Not surprisingly many people see this as nothing more than a cynical marketing ploy. As the program synopsis concludes:

The problem facing the Fairtrade Foundation is whether they can go mainstream without making too many compromises with big business, and whether core supporters will continue to stick with them.

That is an interesting question to ponder. I’m not buying Fairtrade in an effort to make super rich tycoons richer, I’m buying to help people who before fairtrade were unable to earn enough to live on. I’ve got no problem with the supermarkets making a profit on the goods, but I think it should be the same profit that they make on the non-fairtrade item, anything else would seem to be perverting the whole idea. Having said that, whilst we’re paying more than we maybe should, there is extra money going to those who need it – fairtrade does make a difference, even if big business is trying to make extra from it over here. Certainly I don’t think we should stop buying fairtrade. Instead, I hope that with increasing awareness there will be increasing information about how much of the extra we pay for fairtrade is actually going to those who need it – and how much is going elsewhere.

2 thoughts on “How Fair is Fair Trade?”

  1. I watched that programme (I also used to be acquainted with John McCabe and his family).

    I suppose the programme amy have done some good by highlighting the fact that supermarkets are taking a bigger cut from Fairtrade products than we might expect, if that puts pressure on them to take a smaller cut.

    However, we also have to accept that supermarkets and big brand names are in it to make a profit. Presumably the profit is worked out as a percentage, so the higher the cost of the product, the bigger the cut to the supplier even if the percentage is the same on al products. However, I’m sure “value-added” brands, which Fairtrade is probably classified as, will be expected to provide a higher return for the company.

    It is a shame more of the extra we pay doesn’t go to the original producers in developing countries, but that isn’t the way our economy works. Like you, I don’t think it’s a reason to stop buying Fairtrade, but it does mean people on low incomes who are as keen to support farmers etc in the developing world as you or I will find it much harder to do so and that could be a source of frustration for them.

    Maybe that is all the more reason to buy from outlets other than supermarkets and maybe the Co-op – although the argument I often hear (and repeat) is that buying Fairtrade from supermarkets helps to increase sales of Fairtrade products and makes them much more mainstream.

    Perhaps if we want Fairtrade to be a success we have to accept that it must be adopted and promoted by those whose principles we aren’t entirely happy with. ???

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