Sunday, May 25, 2014

Fairtrade Fails

Another failure of well-intentioned reform has been revealed by recent research.

Sales of Fairtrade-certified products from Uganda and Ethiopia are not benefiting poor farmworkers as profits fail to trickle down to much of the workforce.  A UK government-sponsored study, which investigated the production of flowers, coffee and tea in Ethiopia and Uganda, found that "where Fairtrade flowers were grown, and where there were farmers' groups selling coffee and tea into Fairtrade certified markets, wages were very low". Wages were higher on farms that were larger, commercial and not Fairtrade-certified. Even comparing different small-holder sites, wages were generally lower in the areas dominated by Fairtrade producer organisations.

Christopher Cramer, economics professor at the University of London and one of the report's authors, said: "Wages in other comparable areas and among comparable employers producing the same crops but where there was no Fairtrade certification were usually higher and working conditions better. In our research sites, Fairtrade has not been an effective mechanism for improving the lives of wage workers, the poorest rural people."

They also found evidence of the widespread use of children being paid to work on farms growing produce for Britain's leading ethical label. "When wage workers aged over 14 years were interviewed, a very large proportion of them said they had been working since the age of 10, or even earlier," it said. "What is clear ... is that very significant numbers of young, school-age children are having to work for wages in the production of agricultural export crops, including Fairtrade-certified commodities."

Social projects, paid for partly by the Fairtrade premium, were found not to provide equal benefit to all. The researchers reported that many of the poorest did not have access to facilities. In one Fairtradetea co-operative the modern toilets funded with the premium were exclusively for the use of senior managers. “Fairtrade attempts to support and subsidise co-operative groups of 'smallholder' producers on the remarkably na├»ve assumption that the benefits of this support are distributed evenly amongst the group. This assumption about egalitarian distribution is unwarranted."

Fairtrade, started in Britain 25 years ago by development and consumer groups including Oxfam and the Women's Institute, has grown into one of the world's most trusted ethical schemes, with 1.24 million farmers and workers around the world. Fairtrade products contribute to the funding of schools, health clinics, sanitation and other "social projects" in rural areas. To join the scheme, farmers must agree to meet social, labour and environmental standards. In Britain it is a £1.78bn enterprise backed by governmen, churches and supermarkets.


Ken Schaefer said...

I don't know what to think about this. The Guardian article is sponsored by the Gates Foundation. Could this be propaganda to discredit Fair Trade? Not saying it is. I am just skeptical. Either way until the majority set up a Socialist society Fair trade or not the worker will work as wage slaves.

ajohnstone said...

The actual research had no connection with the Gates Foundation but was a long-term and still ongoing UK government project carried out by University of London. Fuller details here

The defence by fairtrade was that there were additional benefits such as health-cover and overtime rates which commercial companies didn't offer.

But the accompanying article

which the blog didn't quote explains the harsh fact of capitalism
"Wages and working conditions vary significantly across employers. There are many off-the-peg but unconvincing reasons given for paying people shockingly little: it is what the price of coffee allows, you can't pay more when there is an excess supply of people wanting the jobs, and so on. But then it is surprising to find that there are employers who evidently can pay much more."
And again its what Fairtrade admits themselves...its down to scales of economy.

Anonymous said...

Important to check out the Fairtrade response to the research