Submitted to Felix in rep... (06 Dec 2004)
(for any Americans reading this; you probably don't know what a student Union is - don't worry.)
Jamie Brothwell seems very keen that we should all buy fair trade products, to that point of creating a bureaucracy to check that we do. I'm perfectly happy for him to pay any price that the suppliers and growers agree to, including one which is above the market value. But before there is a "campaign for increased consumption of Fairtrade goods" (funded by our infinitely-bounteous Union I suppose) people should be aware of the problems of Fairtrade.
When buying Fairtrade coffee you are charitably giving to certain selected groups of producers. Selected, that is, by the Fair Labeling Organisation which charges $2431 + $607/year + $1 per 110 pounds of coffee sold to be certified as a Fair Trade producer. And if you're a small producer (that is, less than 44,000 pounds of coffee per year - $55,440 per year, by FairTrade base prices) then I'm afraid that the FLO "seldom" certifies groups so small [Simen Sandberg, quoted in The Christian Science Monitor, April 13th]
The problem with the primary FairTrade produce, coffee, is that too much of it is being produced worldwide. In Brazil and Columbia, producers were encouraged to switch from cocaine to coffee. In an effect to rebuild Vietnam, aid went into setting up coffee plantations so that the farmers could be self-sufficient. This lead to over-supply of coffee.
The average coffee production per year increased 28% from 1990 to 2002 [ICO figures], but the values jump wildly - not the sign of a stable market. All this over-supply, of course, caused the price to drop and the less efficient producers to suffer. The inefficient producers in this case were the small, primitive farmers which Fair Trade is supposed to help.
This gives the efficient producers less incentive to cut costs and keeps those farmers forever at the mercy of the charity of those who buy FairTrade and of the FLO, which soon gains the power to select who will and who won't survive.
Instead of this perhaps Jamie should we lobbying for the elimination of EU subsidies such as the Common Agricultural Policy. (Though not through the Union of course, because everyone agree that the Union should limit itself to those issues which affect students as students, don't they?)
The idiotitic effects of the CAP have entered into common usage; "butter mountains", "wine lakes" etc. In 2001, 7m tonnes of sugar was exported [Oxfam, 2002] from the EU, and the EU taxpayer paid a total of $2.1 billion to subsidise this dumping on the world markets.
The development of internal trade (esp within Africa) and the cessation of dumping under-priced goods on the world market is the way to help these farmers. Hitching them to our charity, which is supported only by the publics' wondering attention, is not.