Fairtrade: a good idea?

Alex Singleton posted a comment saying that Fairtrade is making things worse not better, and linking to his own piece, Is Fairtrade Coffee a Good Idea?

It's interesting. Alex says the reason for such low coffee prices is overproduction, and that giving farmers any encouragement to produce more coffee will make things even worse in the long term. A fair point, but I think it kind of misses the mark in terms of what Fairtrade is about.

As Alex says, "It is easy to show photos and case studies of Fairtrade farmers who have benefitted... But in economics, it is important to look at both the seen and unseen consequences."

I agree. But Alex sees the unseen consequences of Fairtrade as being even lower coffee prices due to increased production, and therefore more farmers needing to get into producing something else (which, for some, can be impossible). And, as Alex points out, "five people and a machine can produce the same [coffee] output in Brazil as five hundred people in Guatemala."

So Fairtrade distorts the market, artificially raising prices for some while driving others into even worse trouble than ever before. Alex makes a pretty good case that buying Fairtrade is actually unethical. That it breaks the golden rules of supply and demand.

I do not agree, however. Fairtrade is a great example of how cool consumerism can be, for all. I get a good product for my money. It's fine quality, produced in a sustainable way, without exploitation of anyone, and without anyone getting horrendously rich either. I like that. As a consumer, I'm prepared to pay for that.

If I hand over my money, I want to know that people - and the Earth - are being treated with respect. I want to know my product is GM-free. I want to know that I'm not unwittingly supporting such "unseen consequences" as: coffee farmers losing money on their crop while I enjoy my caffiene buzz; exploitative middlemen getting rich and fat and lazy; giant companies like Nescafe and Kenco laughing all the way to the bank while people starve; genetic modification; lack of respect for the Earth. I don't want to pay for these things. I also don't want a product that is grown by a machine.

Luckily, there are products I am willing to pay for (vote for, if you like). Those products are the ones certified by the Fairtrade Foundation. I always managed to find the few extra pennies required for some Fairtrade products, even in my most poverty-sticken periods.

Personally, I say no to any form of ecomonics that puts profit before people. That's not what Adam Smith was about, and Darwin (Mr Survival of the Fittest), too, understood the need for humans to take care of each other.

Lastly, I do not understand the suggestion that Fairtrade is encoraging more people to produce coffee. I always thought it was more a case of getting a better deal for those that are already in the business, helping them to have a decent standard of living and encouraging effective, safe, mindful production. Long term, the Fairtrade model can be applied much more widely, including in 'developed' countries like Britain. It's about people getting a fair deal. Having too many coffee farmers in the world could be blamed on many things, but Fairtrade is surely not one of them.

I think the type of analysis Alex is offering is very valuable indeed. Fairtrade is not solving all the world's problems. There are still many, many trade issues that need to be addressed. Progress is slow. But I look forward to exploring more of Alex's blog. Looks like a very enlightening read.