How fair is Fairtrade?

Submitted by Anon on 12 January, 2005 - 5:59

Within No Sweat we debate what is the best way to stop sweatshop labour. One of the biggest debates we have is around the role to be played by FAIRTRADE goods. Here Paul Hampton explains what he sees as the shortcomings and drawbacks of FAIRTRADE. We invite other readers to join the debate

The world needs trade justice, but is the FAIRTRADE label a viable strategy to get it? I don’t think so.

1. FAIRTRADE labelled goods are a niche market.

Sales of products carrying the FAIRTRADE mark are tiny in comparison with total consumer spending. FAIRTRADE coffee has around 3% of the UK coffee market (18% roast and ground). FAIRTRADE bananas account for 4% of the market.

But total UK food sales are around £100 billion a year, so FAIRTRADE food accounts for just 0.1% of sales. Total world trade is $10 trillion dollars — therefore, even if world FAIRTRADE sales are $1 billion (an overestimate), it represents 0.001% of world trade.

FAIRTRADE enables five million farmers to benefit from international trade — but this is less than 0.002% of the world’s farmers.

Figures like these barely dent the market, and only a small number of the world’s two billion small farmers stand to benefit.

2. Big companies use FAIRTRADE as a veneer for respectability.

Big companies are now jumping on the FAIRTRADE bandwagon, either to exploit ethical consumers’ willingness to pay more for FAIRTRADE goods, or by using FAIRTRADE to enhance their image as ethically and socially responsible companies.

Arguably, the big supermarket chains such as Tesco, Starbucks and the Body Shop have co-opted the idea, offering more expensive FAIRTRADE products to guilt-ridden consumers who want to ease their conscience without really tackling root causes.

3. There are narrow limits to what consumers can achieve by ethical purchasing.

This is well explained in George Monbiot’s book, the Age of Consent. Monbiot argues that almost everything we buy has been bought at least once already by the time it reaches us, passing along a vast transmission chain that is difficult to trace, never mind influence.

Ethical purchasing signals “become lost in the general market noise”. Unless it is part of an organised consumer boycott (which is difficult to sustain), there is no guarantee the company will get the message.

FAIRTRADE purchasing does not stop bad practice. Not buying cocoa produced by slaves does not bring the slave trade to an end, nor does it prevent others buying cocoa produced by slave labour. Crucially, the idea works with the logic of the market, rather than against it.

4. FAIRTRADE doesn’t promote workers’ organisation.

The FAIRTRADE standards state that the right of workers to form trade unions and to bargain collectively without fear of victimisation is one of the key standards that have to be met for producer companies to get the FAIRTRADE mark. There are some examples of FAIRTRADE accredited plantations — Ghanaian banana producers, Kenyan rose farmers and Sri Lankan tea growers — where unions are recognised.

However, this is not the case all along the global supply chain.

The COLSIBA banana workers’ union federation in Central America has complained about union busting on plantations that have been FAIRTRADE certified.

Last year COLSIBA pointed to the “systematic violation of workers’ and union rights” by producers that benefit from the mechanism of FAIRTRADE. It says that it has proof that unions do not exist in many of these plantations.

Further along the supply chain, when coffee, tea and cocoa are manufactured and processed ready for sale in the shops, a similar issue emerges.

None of the major FAIRTRADE companies — Cafédirect, Clipper Tea, Green & Blacks and Day Chocolate — have union recognition agreements in the processing and packaging factories they use in the UK. None are unionised themselves — although some individual workers are union members.

And FAIRTRADE does not compare favourably even with some of the nastiest multinationals.

There are some examples of unions organising in Central America in some big multinationals that are not involved in the FAIRTRADE movement.

In 2001 COLSIBA and other unions signed an agreement with Chiquita (formerly United Fruit), one of the largest banana producers in the world and long regarded as one of the worst violators of workers’ rights.

In processing, companies such as Nestlé, Cadburys and Kraft Foods in the UK are unionised and have signed national recognition agreements with unions.

Of course, unionisation does not guarantee fairness — there is still exploitation in these factories and plantations. However, the best guarantee of “fairness” is when goods are “made by union labour”. Union organisation is the best way for workers to improve their living standards.

And workers have the power of numbers, the power of organisation, because, although workers certainly can’t buy everything, the working class does produce pretty much everything.

There are probably more than one billion workers in the world today (that figure might be as high as two billion).

There are more than 150 million trade unionists, and struggles every day for more workplace organisation.

This means that, instead of putting all our eggs in the Fairtrade basket, to end sweatshop labour we are better off concentrating our efforts on making solidarity with workers.

People in Britain should spend their money as they wish, but they should know that it won’t drastically change the world. To do that we have to tackle the multinationals, the governments and the multilateral institutions that currently run the world.

Concretely, that means helping workers get organised across the globe.

FAIRTRADE is at best a well-meaning dead-end and at worst a diversion from the real task of organising workers.

This website uses cookies, you can find out more and set your preferences here.
By continuing to use this website, you agree to our Privacy Policy and Terms & Conditions.