Fair Trade

Honduran farmer Dennis Alfredo Cruz shows roasted coffee beans at a Fair Trade event on the sidelines of the World Trade Organization Summit (WTO) in Hong Kong, 16 December 2005.

Consumers who pay extra for coffee or other products with Fairtrade labels may not be helping the lives of the world’s poor, a new study suggests. Researchers from SOAS, University of Londonm spent four years looking at coffee, tea and flower workers in Ethiopia and Uganda. The study finds some at Fairtrade sites earning less than those at workplaces that are not Fairtrade certified.

Fairtrade International, which sets standards, is pushing back, saying the study makes unfair comparisons, though CEO Harriet Lamb does says the study makes valid points about the challenge of making sure Fairtrade money flows all the way through farmers to farm hands.

Christopher Cramer, one of the study’s authors, says Fairtrade does do good. He and his colleagues would like to see consumers get “clearer information about exactly who benefits and how and on the basis of what evidence.”

The conversation the study is provoking about Fairtrade is a reminder for anyone who shops with an eye toward a certain goal, be that supporting local, organic or Fairtrade producers. It’s wise to do a bit of homework to make sure that extra money is doing what is hoped.

Mark Garrison: The study finds some workers at Fairtrade sites earning less than those that aren’t Fairtrade. Economist Christopher Cramer, one of the study’s authors, spoke to our partners at the BBC.

Christopher Cramer: If people think that Fairtrade is in the very best interest of the poorest people, then there are serious problems.

Fairtrade International, which sets standards, is pushing back. CEO Harriet Lamb says the study makes unfair comparisons involving workers on very small plots of land.

Harriet Lamb: It compared the conditions they’re in with those of a plantation run by a multinational in the same area. Now that’s not fair.

Bigger companies can pay better because of their larger scale, though the British researchers say they account for that. They want shoppers to have more information. Cornell economist Arnab Basu studies Fairtrade, but isn’t involved in this research. He says Fairtrade buyers are informed overall, but often don’t know the details.

Arnab Basu: There is a bit of a misperception as to what they’re actually doing and who they’re really helping.

And Lamb at Fairtrade International points out there’s only so much most shoppers can take in.

Lamb: As a busy mother or father going around the supermarket, your kids are screaming and you want to play your part in tackling poverty, there’s really a limit to the amount of information that you can seek out or look for on one small chocolate bar, one small pack of coffee.

Cramer says Fairtrade does do good. And Lamb says his study makes valid points about the challenge of making sure Fairtrade money flows all the way through from farmers to farm hands. I'm Mark Garrison, for Marketplace.

About the author

Mark Garrison is a reporter and substitute host for Marketplace, based in New York.

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