As a couple of good, sociable friends live there I spend a reasonable amount of time in Bristol. It's a great place, but then again I've always loved university towns, packed as they are with lovely young ladies doing bar and coffee shop work to alleviate their student debt. But one downside of Bristol (and I suspect other right-on university towns) is the tendency to embrace any passing social fad. Bristol's current obsession is Fair Trade.
The city is simply drowning in Fair Trade signs (goodness only knows at what environmental cost) which try to convince us that Fair Trade "guarantees a fair deal for third world producers". So keen is Bristol to position itself as the centre of white middle-class guilt that the city is branding itself as 'Fair Trade City'.
Trade is an emotive issue and 'Fair Trade' just sounds so lovely and funky that it's hard to argue against without seeming like a total shit, but here goes using Coffee as an example.
Coffee supplies exceed worldwide demand and market prices for coffee (and the incomes of coffee growers) are falling as a result. Despite the efforts of Starbucks, Café Nero etc. there are only so many lattes one can stomach, demand has peaked and consumers are becoming more discerning in their coffee choices.
The free market's mechanism for encouraging lower production is forcing out of business higher-cost producers who, if they are able, diversify into other crops. As higher cost producers tend to be from relatively developed countries (like Mexico) their chances of diversifying successfully or finding another, admittedly crappy, job in a factory or in the service sector is better than that of their counterparts in less developed countries (like Ethiopia).
Fair Trade has a different solution. Distort the market by paying subsidies to supposed third-world producers, disencentivising them from diversification and market the result to guilty middle class liberals in western countries. Fair enough, you might say, no-one suffers except us westerners who pay a bit extra in a good cause, supporting a destitute coffee grower.
Well, no.
Fair Trade coffee isn't increasing global consumption of coffee and in the zero-sum consumption game that results the purchasers of Fair Trade coffee are buying it at the expense of other brands. No doubt the consumers of Fair Trade coffee console themselves with the thought that 'their' coffee is produced by small scale honest farmers with no alternative means of earning a living, whereas the non-Fair Trade alternative is the product of a large (read 'evil') corporation. Unfortunately for Mr and Mrs Guilt, the facts don't support that assumption.
25% of Fair Trade coffee is Mexican and whilst a Mexican coffee grower is undoubtedly poor by the standards of anyone reading this, he is not poor compared with his Ethiopian counterpart. For the Ethiopian coffee grower farming really is his only choice and, if the market were operating freely, a sensible one as he enjoys a cost advantage. He also incidentally enjoys a quality advantage as most Mexican coffee is Robusta, the crap that's normally used to make instant granules. If it were marketed as ground coffee without the Fair Trade label, it would not sell.
So why aren't there more Ethiopian Fair Traders? A glance at the Fair Trade Foundation website (complete with its personal stories of Fair Trade coffee growers, all of whom are from South or Central America) gives a few hints. We are told that:
"The certification process begins with a written application to FLO from the producer organisation, often with the support of a trading partner. If the application is accepted, the organisation will be physically inspected against Fairtrade standards by a regionally-based FLO inspector. The inspector’s report is then considered by an independent Certification Committee which takes the final decision on whether or not to certify."
Bureaucracy is a pain anywhere but for your average Ethiopian farmer, navigating through a certification process is a non-starter. The barriers between first and third worlds aren't just of the traditional economic kind, information flow and administrative blocks also play a part. Your average Ethiopian coffee grower simply doesn't have access to the time, skills or administrative resources needed to complete a certification process - even assuming he knows that such a process exists, his access to knowledge of that kind is immeasurably inferior to that of his Mexican counterpart.
Don't for one moment think that I'm advocating a simplification of a market distorting process as a way of introducing 'equality' into the Fair Trade jamboree. Opening people's eyes to the unfairness of Fair Trade is a better, lower cost alternative for both the farmer and consumer.
The more I think about so-called Fair Trade, the more I begin to believe that it, like the massive 'organic' movement, is simply a non-tariff barrier promoted by western producers in order to protect their markets from competition in the event that the grossly unfair farming subsidies paid to western farmers get tackled.
The only Fair Trade is Free Trade.
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