How Fair is Fair Trade?

By Colm O’Neill

In the three decades since their produce first entered supermarkets, the name Fair Trade has become synonymous with good working conditions and a fair market rate. Yet, despite this positive reputation, there still exists much debate as to whether Fair Trade is really as ethical as it at first appears. According to the 2015-2016 Fair Trade International Report, the economic impact of a Fair Trade Certification on the farmers and growers whose produce is sold under the banner, comes to less than $0.04 per person per day. With this knowledge, the question must be asked: How fair is Fair Trade?

One major concern surrounding Fair Trade, is that they often engage with companies that behave unethically. Fair Trade cannot guarantee that producer organizations will be able to sell all their Fair Trade Certified products under agreed conditions, which includes minimum pricing and premiums. Figures provided by Fair Trade International for the period of 2013-2014 show that only 28% of Fair Trade coffee produced during this time frame was actually sold in Fair Trade Markets.

The reasons for this failure to meet Fair Trade standards are many, and are often obscured by a lack of transparency in the global market. One primary factor is that large cooperatives control the Fair Trade premium, rather than the farmers themselves. This means that rather than cutting out the middle-man and offering farmers a more direct compensation for their work, Fair Trade still facilitates a level of bureaucracy that maintains an uneven distribution of revenue.

Beyond the ambiguities of revenue distribution, the very concept of Fair Trade as we know it is open to criticisms of serving as a smokescreen, while failing to truly address market inequalities. The price point that separates Fair Trade produce from the rest of the market is often significant enough that lower-income households cannot afford to budget for it. This means that Fair Trade cannot reach mass markets in a way that
would really effect wide-scale change, and instead serves as a token gesture to alleviate the guilt of middle-class consumers.

Fair Trade is a concept worth embracing, but first it must prioritize effective and transparent means of production and distribution. What Fair Trade aims to achieve is admirable, but what it could potentially achieve is far greater. By addressing the flaws in their business practices, Fair Trade can challenge the conventions that dictate the unfair and uneven distribution of revenue in global markets, and become a much more powerful force for good in the world.