Little Tart loves it all…most of the time

Is The Cost Of Fair Trade A Fair Trade?

Posted on: August 7, 2007

    espresso-roasted_coffee_beans.jpg  In our contemporary café culture who doesn’t enjoy a cup of Joe? Coffee is the life’s blood of artists, students, thinkers and truck drivers. This paper itself is fueled by copious amounts of coffee, each sip enjoyed to the last drop. But that enjoyment is not without a dark side. Coffee is the US’s second largest import after oil. Worldwide, 25 million small producers rely on coffee for a living. Few locations globally have the conditions necessary to cultivate coffee beans, and fewer still have the optimal high altitude and volcanic soil that a high quality Arabica bean needs to thrive. Many of these locales are in less developed nations and have long been exploited by developed nations and corporate entities. “Namely Proctor & Gamble (Folgers) and Philip Morris (Maxwell House)—[who] acquired the status of virtual colonial master in many coffee producing nations…Company representatives at times had more influence in domestic politics … than many local government officials did…”(Dicum). This system resulted in exploitation, suffering and devastating environmental impact throughout the developing world. In 1988, in response to an economic downshift, and an ever-shrinking livelihood, coffee producers designed the “Fair Trade” movement to ensure a living wage while encouraging agricultural sustainability. This essay seeks to define the movement while it compares two essays with very different interpretations of the Fair Trade movement and its economic future.

    Jeremy Weber’s article “Fair Trade Coffee Enthusiasts Should Confront Reality” discusses the failings of Fair Trade. Weber’s chief complaints are the “misleading representation of Fair Trade [that have] led many socially conscious coffee drinkers to hold unexamined assumptions about the benefits of Fair Trade…” including: living wage assumptions, the tendency for fair trade agencies to blame corporations for their economic difficulties, an attempt to “strong arm the market”(112) by setting minimum prices, the prohibitory costs of certification and an excess of production which out weighs demand. He concludes the article suggesting that “Social Justice goals and efficiency can complement each other” (116) and that Fair Trade proponents should revisit the goals of their endeavor when compared to the realities of the market.

“Justice, sustainability, and the fair trade movement: a case study of coffee production in Chiapas” By Mark and Ian Hudson, used Chiapas, a historically underserved, underemployed and politically volatile region of Mexico, as their case study into the successes of Fair Trade. They begin by describing the region, its history, and economic situation. Following this Hudson (et al) use the actual list of criteria produced by the FairTrade Labeling Organizations International (a leading international association of Fair Trade producers) as measuring posts for Fair Trade achievements in the region. Next, the article touches on the environmental impact of Fair Trade and the various benefits/shortcomings of sun farming, shade farming and organic farming. The authors conclude by explaining their interpretation of the data. They believe it establishes, not only that Chiapas is improving, with the use of Fair Trade theory, but that Fair Trade results in “an unalienated relationship between the direct producer and the land [which] provides [the] basis for a more rational interaction between humans and the environment, and the possibility of sustainability.” (143)

    The most important element in both essays is if Fair Trade fulfills its stated goals. Weber uses the following definition of Fair Trade, provided by FINE (FLO, International Federation for Alternative Trade, Network of European World Shops, and the European Fair Trade Association):

Fair Trade is a trading partnership, based on dialogue, transparency and respect that seeks greater equity in international trade. It contributes to sustainable development by offering better trading conditions to, and securing the rights of, marginalized producers and workers–especially in the South [FINE 2001]. (109)

Hudson (et al) have an even simpler definition: “The system of Fair Trade manages to address issues of social justice and environmental sustainability in an integrated way”(131). In either case the apparent intent of Fair Trade is to provide an economic advantage to its member producers in exchange for a commitment to sustainable agriculture and economic justice. For many people economic justice is created “by encouraging and helping to sustain noncapitalist forms of production…”(Hudson 131). Weber does not see the situation in that manner. He is a traditional capitalist and sees Fair Trade as the opposite of a Free Market. Using economic terminology I didn’t fully understand Weber claims that Fair Trade hurts its producers because they were not participating in a free market where the price was driven by demand, but instead by an artifical floor established by the “Fair Trade” organizations. He cites the opportunities for mis-management within this system and the potential for producer exploitation yet he fails to mention the generations of just these sorts of abuses on the part of corporations. Weber complains that the existence of a price floor will hurt producers, and yet demand for Fair Trade coffee is increasing.

    While still a niche market, making up only an “estimated 0.01% of the total”(Hudson 131) coffee sales globally, Fair Trade coffee saw “sales increas[e] impressively in the 1990s and 2000” (Hudson 131). Even Weber states a “sales increas[e of] 40% from 2004 to 2005…” (109) If this is the case, why is Weber claiming excess production is proof of Fair Trades failings? Everyone agrees that Fair Trade is in its infancy, but with sales profits of 100 million in 2000 and a sales rate that is nearly doubling yearly, it seems fair to assume that in the coming years demands will out strip supply. When that becomes the case, Weber’s concerns about a price floor and price regulation will become moot.

    One of Weber’s claims could be a sticking point. His strongest argument is that “Fair Trade” advocates have misleadingly portrayed their movement to consumers as providing a living wage to its producers. He claims that in fact the Fair Trade agencies ensure a minimum price for the producers’ collaborative and if expenses or costs are not properly managed, the profit margin can be significantly reduced, resulting in sub-“living wage” income. Additionally seasonal laborers are not covered by the umbrella “living wage” concept, and while many Fair Trade organizations advocate a living wage for laborers, research in Peru suggest this is far from the reality. If this were the case, it would indeed be a valid criticism of The Fair Trade movement. Hudson refutes Weber’s accusation, explaining “that fully half of the coffee traded globally is produced by small farmers with fewer than 5 hectares in production…” (Hudson 131) and that “the majority of the organization’s members are small-scale producers of coffee, meaning they are not structurally dependent on hired labor, operating their farms mainly with their own and the family’s labor…” (Hudson 137). This is yet another instance where Weber is assuming that the functions of capitalism must be applied to Fair Trade. Corporations hire laborers to reap the harvest so shareholders and CEOs do not have to. Fair Trade is not so removed from its product, nor is it removed from the environment where not only the product grows, but the growers live.

    Hudson invests much of his text in explaining the advantage of Fair Trade as an environmental movement, but since Weber does not speak to the environmental impact I will not contrast the two except to state that shade grown coffee farms in Chiapas support “180 species of birds, an amount exceeded only by “undisturbed” tropical forest, sun grown plantations support 90% fewer…” (Hudson 139) and the benefits of low impact agriculture are felt locally and globally. Weber’s one mention of environmentalism is to complain that Shade and Organic growing were additional certifications which would cut into the profit margin. Sustainability is not his concern.

    That is Weber’s problem, ultimately. He fails to realize that “Fair Trade” growers are not seeking to participate in capitalism as he defines it — he seems to fundamentally miss this point– they are in fact attempting to create something new and holistic. The fact that his final statement:

“If Fair Trade is dominated by those who see mainstream for-profit companies as intrinsically destructive, the movement will remain a fringe, niche market that supports a few privileged groups…Only with a strong dose of practicality and self-critique can the Fair Trade movement create an effective mechanism for promoting development in coffee-producing communities.” (116)

puts the responsibility to conform with his capitalistic model on the back of subsistence farmers, in some of the poorest regions of the world (while referring to them as a “privileged few”), rather than questioning his own systems responsibility for their poverty, Weber proves the fallacy of his argument. Weber’s argument that Fair Trade hurts growers, seems a misconstruing of the facts when compared with history and Hudson’s examination of the situation. Hudson has a different conclusion, one that feels very right minded to me. He doesn’t see Fair Trade as the savior of subsistence farmers, but rather as a mechanism for subsistence farmers to empower themselves with “an unalienated relationship between the direct producer and the land provid[ing] a basis for more rational interaction between humans and the environment, and the possibility of sustainability” (143). If only we could all apply that principle to our lives, we might find the world a fairer place, and that is something for which I am willing to trade almost anything.

coffeecatucai.jpg

Works Cited

Dicum, Gregory. “Colony in a Cup” Gregory Dicum Writing. Spring 2003 <http://www.dicum.com/clips/index.php?p=4>

Hudson, Mark, and Ian Hudson. “Justice, sustainability, and the fair trade movement: a case study of coffee production in Chiapas.” Social Justice 31.3 (Fall 2004): 130-146. Expanded Academic ASAP. Thomson Gale. College of Alameda, Alameda. 14 July 2007 <http://find.galegroup.com.proxy.alameda.peralta.edu/itx/infomark.do?&contentSet=IAC-Documents&type=retrieve&tabID=T002&prodId=EAIM&docId=A136648921&source=gale&userGroupName=collalamedal&version=1.0&gt;.

Weber, Jeremy. “Fair Trade coffee enthusiasts should confront reality.” The Cato Journal 27.1 (Winter 2007): 109-117. Expanded Academic ASAP. Thomson Gale. College of Alameda, Alameda. 14 July 2007 <http://find.galegroup.com.proxy.alameda.peralta.edu/itx/infomark.do?&contentSet=IAC-Documents&type=retrieve&tabID=T002&prodId=EAIM&docId=A163545140&source=gale&userGroupName=collalamedal&version=1.0&gt;.

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