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22
Jan

Does Fairtrade Benefit The Producers?

   Posted by: admin   in

There doesn’t seem to be any great benefit in the system for the poor peasantry that it’s supposedly designed to help. In fact, it actually seems to make people worse off, not better off. This isn’t I hasten to add, the result of a study done by some hateful neoliberal like myself. No, this is the result from a four year long research program by the impeccably liberal (and veering over into Marxian third world nonsense at times) School of Oriental and African Studies in London.

Their report is here and they’ve an article explaining matters here.

What did surprise us is how wages are typically lower, and on the whole conditions worse, for workers in areas with Fairtrade organisations than for those in other areas.

Careful statistical analysis allowed us to separate out the possible effects of other factors, such as the scale of production. Still, the differences were in most cases, and especially for wages, statistically significant. Explaining why it should be that workers in areas dominated by Fairtrade organisations are so often worse off than workers in other areas is a complex and challenging task. Our full report explores some possible reasons.

It was also surprising to learn that many people do not benefit from the “community” projects supported with funds generated by the “social premium” consumers pay for Fairtrade products. Researchers at London’s School of Oriental and African Studies (Soas) found that many of the poorest are unable to use these facilities. In one Fairtrade tea co-operative the modern toilets funded with the premium were exclusively for the use of senior co-op managers.

There’s two very different things being said here. The first is implicit there, in the way that they talk about the scale of production. Fairtrade is really only open to people working at the level of an individual peasant. Indeed, some of the various schemes insist that mechanisation should not be allowed as one example of the resolutely small scale that they insist everyone work at. And in agriculture (where almost all Fairtrade is) is one of those sectors where there are huge, vast even, economies of scale. This matters, this matters a lot.

The second thing is that about the community projects. Some of that Fairtrade premium is meant to be spent on public goods in those areas. Which is just absolutely great, assuming (as in the case described, it isn’t) that the public good is actually available to those it is supposed to benefit. But even then we come back to the same old problem. They might now be poor peasants with free toilets. But they’re still poor peasants, free toilets or no. And this is something that hateful neoliberals like me have been saying for a long time now. Fairtrade is simply a vastly inefficient method of making the lives of the poorest people in the world better.

All of which leads us to one final difficult question. There is a substantial premium paid for Fairtrade products. If it’s not going to those peasants and the community projects aren’t all that much either, then where is it all going? The answer being that there’s an awful lot of Sebastians and Jocastas being employed on western world middle class wages to run these schemes. And that’s where the money is going. Sure, non Fairtrade products have marketing systems too but which do you think is going to be more efficient? That of Nestle or that of some well meaning and not very driven do-gooders?

 

Jewelry that is made as part of a social-enterprise effort;
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of real benefit to artisan producer group
and community
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This is Fair Trade Jewelry.

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