Fairtrade Fortnight

Starts tomorrow I beleive. And there\’s a report out from the bosses at the ASI to celebrate.

Fairtrade\’s supporters blame the plight of coffee farmers on world prices and ruthless multinationals. But supporters ignore the real causes of poverty among growers. Farmers I interviewed in Kenya told me that the problems they faced were caused by their own government\’s interference. They have to use milling companies granted regional monopolies, which fleece them. They want to boost productivity by using fertiliser but cannot afford the prices demanded by the fertiliser monopoly. Imported tools would transform their output but are subject to punitive tariffs.

Brazil, conversely, pursued free-market reform and the farmers have mechanised. That has enabled five people and a machine to enjoy the same output as 500 unaided farmers.

Yet the Fairtrade Foundation, the lobby group behind the scheme in Britain, seems oblivious and admits it has no programmes to encourage the use of technology. Even worse, it is giving counterproductive advice to farmers, encouraging them to mix crops in the same field, thereby cutting productivity and making mechanisation more difficult.

Despite Fairtrade\’s moral halo, there are other, more ethical forms of coffee available. Most Fairtrade coffee is roasted and packaged in Europe, principally in Belgium and Germany. That is unnecessary and retards development. Farmers working for Costa Rica\’s Café Britt have climbed the economic ladder not just by growing beans but by doing the processing, roasting and packaging and branding themselves.

But Café Britt is not welcome on the Fairtrade scheme. Most Café Britt farmers are self-employed small business people who own the land they farm. That is unacceptable to the ideologues at FLO International, Fairtrade\’s international certifiers, who will accredit farmers only if they give up their small-business status and join together into a co-operative.

There is evidence that Fairtrade is damaging quality, too. Its farmers typically sell in both Fairtrade and open markets. Because the price in the open market is solely determined by quality, they sell their better beans in that market and then dump their poorer beans into the Fairtrade market, where they are guaranteed a good price. That\’s worth considering next time you pop out for an espresso.

(That\’s another boss, Alex Singleton of the GI, writing there).

I\’ve actually heard (rumour, not fact) that Fairtrade actively militates against mechanisation, insisting that only peasant farmers can benefit: a great way of perpetuating poverty down the generations.

15 thoughts on “Fairtrade Fortnight”

  1. “insisting that only peasant farmers can benefit”
    Sadly even this is not true as the very poorest are excluded because they cannot afford the fees.

  2. I always wondered why Fair Trade coffee tasted like mud. Still, these Useful Idiots have provided me with a logo to quickly identify coffee that is horrible and holds people in poverty.

  3. Kay Tie,

    There is some decent fairtrade coffee around. I used to buy it. Cafedirect’s instant is quite good.

    But I’ve been convinced (by arguments from bloggers) to just spend the same money and buy better coffee.

  4. “But I’ve been convinced (by arguments from bloggers) to just spend the same money and buy better coffee.”

    Indeed. It’s been a bit of an eye-opener to realise how political and corrupt the Fair Trade movement is. I shouldn’t be surprised: most charities are at it. The organic movement is up to the usual tricks over food miles, Oxfam behaved foully in its anti-Starbucks campaign (the reason that I disinherited Oxfam), the NSPCC makes life more miserable for children.

    I’ve given up listening to the shrill lobby groups, and stopped giving to charity. My annual charity allocation now goes through kiva.org and is microlent directly to third world people. Since they pay it back, each year I will get to lend out larger and larger amounts of money to more and more people. The money I’ve microloaned to 30 people (so far) is bound to be a lot more effective than simply giving it to some whining Guardianista charity to spend on hiring an expensive kaftan-wearing CEO.

  5. Kay Tie: ha, ha, very well put. Here in Lima the first thing Oxfam, ITDG and all the other fuckers buy is a big office in a nice residential district, then up-to-the-minute computer equipment and shiny Toyota 4x4s that never leave the city. Tossers the lot of ’em.

  6. Is it actually possible to get a decent cup of coffee without oppressing some peasants or have I been misinformed? I was always under the impression it was an important part of the growing process.

  7. “Here in Lima the first thing Oxfam, ITDG and all the other fuckers buy is a big office in a nice residential district”

    One of my loan syndicates lent $350 to a woman in Peru who makes clothes in her own workshop and runs a sweet shop on the side. She’s using the money to expand, and is paying us back over six months. At the end of six months, we get $350 back, she gets a bigger business, more money, and Oxfam will have done squat for her (or, I’m willing to bet, anyone else in her community).

    “Is it actually possible to get a decent cup of coffee without oppressing some peasants or have I been misinformed?”

    If you must feel guilty, then loan some of the $1200 this guy is looking for:

    http://www.kiva.org/app.php?page=businesses&action=about&id=37246

    Then you can feel all nice and warm the next time you drink a cup (unless it’s an Iced Mochaccino).

    Sorry to go on about this. I just think it’s a concrete example of what Tim preaches. And has the side effect of providing concrete anecdotes to get the whining Guardianistas one meets at dinner parties to shut the fuck up.

    Tim adds: I’m note sure I preach: declaim perhaps, but preach sounds all too holy an approach for me. But Kiva, yes, I thoroughly approve of it: although I think they limit how much you can put in at the moment?

  8. Kay Tie & Tim,

    The Kiva site sounds good. Is it charitable? i.e. I donate 1GBP the U.K. Govt tops up 40p?

    Tim adds: No….US based. Might work if you’ve got any US income though….

  9. “The Kiva site sounds good. Is it charitable? i.e. I donate 1GBP the U.K. Govt tops up 40p?”

    I’ve been thinking about setting up a UK charity that lends money to kiva.org, but outsources the management back to each donor, kind of like a SIPP. A wrapper around kiva.org, if you like. That then ought to get Gift Aid plus an 18% reclaim for higher rate payers.

  10. “all the other fuckers buy is a big office in a nice residential district, then up-to-the-minute computer equipment and shiny Toyota 4×4s that never leave the city. Tossers the lot of ‘em.”

    Same procedure the UN followed in East Timor and every other crisis spot where they appear.

  11. Kay Tie: actually your loan syndicate is not the only one of its type here, microfinance is a lively (and apparently successful) subsector in Peru and they do sterling work, by and large, especially with people like the woman you describe.

  12. We are already being forced, through our taxes , to support the toyota brigade. So I place my charitable investments closer to home, where I can see the results. There are plenty of good causes in our own backyards, and you can check the money isn’t going to furnish land cruisers, a swimming pool and bar bills. And the great thing about the RNLI, Sally Army, and Cats Protection League is that they never threaten to put your sorry arse on a TV ad, prattling about all you have achieved for £3 a month.

  13. For all the above please note the response to the ASI article on the fairtrade foundations website.
    As for growing mixed crops I understood this was diversification by the poor farmers to stop them being at the mercy of the price fluctuations of the commodity market when the prices can fall below cost of production. It also provides them with food for themselves and to sell locally to increase their self-reliance. Mixed planting if done properly is a good way of controlling pests without resort to expensive (and in the third world often dubious ) fertilisers.
    I worked for one of the biggest international chemical companies which knowingly sold to the third world pesticides which would be banned in europe.
    I do not know if the corruption mentioned in Kenya is reproduced in the other 50 countries which produce coffee but a blanket boycott of them all seems unreasonable. In fact I have been drinking fairtrade coffee for over 15 years and do not recall any of it coming from Kenyan farmers.
    Microcredit is great if it goes through a good and reputable organisation, but it should not be a substitute for paying a living wage to someone who has produced our goods. It is illogical to exploit very poor people on the one hand to give to someone else who may in fact , as the lady in Lima mentioned above, be actually richer.
    I suggest that those genuinely interested on seeing the impact of fairtrade go on a people to people tour with someone like Traidcraft one of the pioneers of fairtrade foods, or get involved and find out more from local people involved with fairtrade, who deal directly with producers, cutting out middlemen.
    In our town Gossypium, which buys cotton directly from several villages in India can be quizzed on the impact on farmers.
    I know the fairtrade traders in Lewes often struggle to make a decent living and many live simply themselves in order to help create markets for those they deal with abroad.
    Fairtrade is about far more than Kenyan coffee-there are now over 1000 products.
    As regards Oxfam will the gentlemen- Peter Spence?-send me names and places and I will approach Oxfam on my own behalf to see my donations are being used properly.
    Finally is the bad language necessary- why the childish anger- if there is something you have to say back it up with concrete facts and examples.
    Oh and really finally the reason why fair trade is necessary is because there isn’t really a free market, with so many of the rich worlds agricultural products subsidised and dumped on the poor world lowering their prices and the trade barriers that put processing of commodities out of reach for so many of the poor farmers- I suspect the costa rican farmers mentioned are relatively rich to be able to afford the tariffs imposed on their
    processesed coffee. Why not get angry about the inequality of trade? Most fair trade supporters also campaign on this but get little press coverage.
    Respectfully
    M. Adams

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