Fair trade may benefit bosses more than workers

A new report from researchers at The School of Oriental and African Studies of the University of London suggests that one of the basic missions of the fair trade movement is not being achieved, at least when it comes to fair trade coffee from Ethiopia and Uganda. The research found no evidence that Fairtrade has made a positive difference to the wages and working conditions of those employed in the production of the coffee produced for Fairtrade certified export. In some cases the researchers found that those employed in areas where there are Fairtrade producer organisations are significantly worse paid, and treated, than those employed for wages in the production of the same commodities in areas without any Fairtrade certified institutions.

The research team has been careful not to slam fair trade products but it does suggest that fair trade organizations need to pay far more attention to the conditions of those extremely poor rural people – especially women and girls – employed in the production of commodities labelled and sold to ‘ethical consumers’ who expect their purchases to improve the lives of the poor.

The researchers state:

  • Fairtrade has made no positive difference – relative to other forms of employment in the production of the same crops – to wage workers.
  • Systematically, wage workers in the sample in research sites characterised by the presence of Fairtrade certified producer organizations earned less than equivalent workers in research sites without Fairtrade production. A relatively high proportion of wage workers employed in the production of commodities sold to and through Fairtrade certified channels earned less than 60 per cent of the median wage for equivalent work.
  • The reasons for Fairtrade’s failure to make a clear positive difference to wages and conditions, or to the amount of work offered, are fairly clear. They have to do – especially in the production of “smallholder” commodities – with what this research suggests has been in the past a wilful denial of the significance of wage labour and an obsessive concentration [by fair trade organizations] on producers/employers and their organisations.
  • This research suggests that a large number of obstacles remain in implementing improved standards in a way that will benefit rural workers. First and foremost is the need not just for more monitoring and evaluation, but also for better methods. And they have to do – again, especially where Fairtrade certification is awarded to cooperatives – with the espousal of a romantic ideology of how cooperatives operate in poor rural areas. One implication of revealing the obfuscation and even inversion of reality sustained by this ideology is that Fairtrade may well help to make a contribution (though the evidence suggests it is not the most effective contribution) to poverty reduction; but that it does so as an unintended consequence of its promotion of a class of emerging rural capitalists.

On page 122 of the report the authors provide 12 recommendations for changes to fair trade programs that they believe will bring such programs closer to their expressed goals. however, the authors also note:

These recommendations are unlikely to be welcomed by Fairtrade organisations, or by the supermarkets that profit from the important public relations and product differentiation opportunities that certified products provide. It may appear that these recommendations are demanding, unrealistic even. If that is the case, then at a minimum our research suggests that Fairtrade labelling and branding information needs to be changed substantially to reflect the limitations of the claims made and an inability to monitor the wages and working conditions of people employed on the farms of members of small producers organisations. However, it may well be that it proves too costly for Fairtrade organizations, and the producer and retail organizations who trumpet their Fairtrade certification, to implement these recommendations in such a way that a substantive positive difference can be made to the welfare of manual agricultural wage workers. That is one reason why we recommend a broader public attention to, even potentially a reallocation of resources from Fairtrade towards, other types of intervention, to be supported by governments and donor agencies.


The full 129 page report, appendices, and frequently asked questions are available at http://ftepr.org/publications/#publication-563

A response from one of the leading global fair trade organizations, Fairtrade International, which reads to GallonDaily as way too defensive, can be found at http://www.fairtrade.net/single-view+M5a2383b864f.html

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