Since Fairtrade refuses to give details on what happens to the money, its advocates have been reduced to producing anecdotes, saying that it has been successful in a few instances. There is a clear distinction between anecdote and case study in research, in statistics and in daily life. One can learn a great deal from case studies,. However, one cannot assume that because a case study shows that, for instance, one firm lost money, all others lost money then, lose money now, and will continue to lose money in the future. The data that went into the original model, and the conclusions drawn, are specific to that case study: one cannot say that they represent all the firms in one industry in one country, let alone 5000 Fairtrade suppliers in many industries, many markets and many countries.
The case studies do not in any sense constitute a random sample, and they have no statistical value –researchers choose the more successful Fairtrade cooperatives to study. This means that anecdotal evidence, even when it cites a perfectly good case study, is no more valid than the typical Fairtrade marketing plug, ‘“Fairtrade means more security, a bigger say and a better life for ourselves and our families” Ramond Kimaro, KNCU Tanzania.’
Monday, 1 February 2010
Thursday, 17 December 2009
Brainwashing children on Fairtrade
‘For example, in my own diocese – the Catholic diocese of Arundel and
Brighton - I have been told that not to buy fairtrade products is a sin worse
than theft; that not buying fairtrade products is making a deliberate choice to
take from the poor; and that one should never buy products that appear to
have the virtues of fairtrade but that do not have the official Fairtrade mark:
this is actually stated on the diocesan website. I have also heard an Anglican
clergy fairtrade coordinator describe parishes as being “obstructive” if they did
not seek fairtrade status.’
‘I have very serious reservations about the strategy of catching young minds.
My former secretary once said to me that her Brownie group was having a
competition to see how many cups of Fairtrade coffee they could serve to
family and friends. My own (then six-year-old) son was told in Beavers about
the benefits of Fairtrade coffee compared with coffee produced by nasty
multinationals. My 12 year old was told to design an advert for Fairtrade for
his geography homework. Young people are being used to promote a
trademarked brand. These issues are complex. If the people the Fairtrade
Foundation drag into the net in schools and Guide and Scout groups do not
have the maturity to understand the issues fully then, frankly, they are being
brainwashed.’
Philip Booth,The Economics of Fair Trade: A Christian Perspective
Institute of Economic Affairs Current Controversies Paper
16 July 2008
Wednesday, 16 December 2009
High cost of certification
Tea workers still waiting to reap Fairtrade benefits
Managers at one tea estate in Kenya said that Fairtrade regulations were too expensive or difficult to implement and that some of their workers found them too restrictive. At an estate in India, Fairtade inspectors found problems with the way that the premium was managed and many workers complained that they had seen no benefit.
'Tea workers still waiting to reap Fairtrade benefits
By Parminder Bahra, Poverty and Development Correspondent, The Times
07 January 2009
Managers at one tea estate in Kenya said that Fairtrade regulations were too expensive or difficult to implement and that some of their workers found them too restrictive. At an estate in India, Fairtade inspectors found problems with the way that the premium was managed and many workers complained that they had seen no benefit.
'Tea workers still waiting to reap Fairtrade benefits
By Parminder Bahra, Poverty and Development Correspondent, The Times
07 January 2009
Monday, 7 December 2009
Swedish Report criticizes Fairtrade
Helena Johansson Vad uppnas med rattvisemarkning [Executive Summary and Conclusions in English]
This hard hitting report reaches similar conclusions to other analyses by economists.
It will never have a big effect
“There are several weaknesses though. Above all the Fairtrade minimum price can never be extended to a larger number of poor farmers. It is, and will remain, a niche market for relatively few producers. Hence, the labelling initiative will never have a significant role in combating world poverty . . . the concept cannot be scaled up to large volumes. . .”
It harms other farmers
“Poor farmers who are outside the Fairtrade system may be negatively affected by reduced demand for conventional alternatives, and the pressure brought to bear on the prices of conventional alternatives as a result of a production-stimulating effect of the minimum price.”
Farmers get a lot less than the headline price
“producers rarely sell their whole production as Fairtrade, which means that the average price then becomes lower than the minimum price/ Only 30 percent of the total production [of Fairtrade cooperatives (ed.)] qualifies for the minimum price and social premium.”
Even Fairtrade farmers are disadvantaged
“Income support in the form of a minimum price has its disadvantages. It is production-linked, i.e., the farmers must grow specific crops to be eligible for the Fairtrade certification. It may create lock-in effects since the farmers cannot change crops.”
Wrongly attacking conventional international trade
“It is important that the labelling initiative does not mislead people into thinking that conventional international trade is exploitative and unfair in its nature. Instead conventional trade has a large potential to promote prosperity among poor people. If consumers cut down their purchases of labour intensive goods from developing countries it will have a negative impact on income levels of farmers and employees living in these countries.”
“How large a share of the higher price paid by a consumer does a producer get?”
It’s good for businesses, but what about the farmer?
“When a sum of money is to be transferred from a consumer via a shop, wholesaler, buyer, roastery, and cooperative to finally reach, e.g. a coffee bean grower, there is a risk that others along the way are enriched at the same time as costs are incurred for maintaining the system.”
It’s good for shopkeepers
“There is also a risk that the shopkeeper charges consumers a higher price than justified to cover the costs for the labelling system.”
It encourages corruption
“Finally there is a risk of corruption since the minimum price is paid to the producer organisation, which then distributes the money among the farmers.
Fairtrade increases production cost
“Small volumes mean that the production cost per unit may be higher than conventional production. The combination of costs of certification and control generally raises the production costs of Fairtrade products: costs that burden the farmers and reduce the income effect of the minimum price.”
An inefficent way of helping farmers
“In sum, transfer efficiency is generally low meaning that minimum prices are generally inefficient in supporting incomes.”
A very inefficient way of helping farmers
“The social premium may be used for building schools etc., but it is an inefficient way of transferring money to this type of project. A direct financial contribution or aid would be more efficient, because of the link to production and its negative effects, not to mention the higher cost of Fairtrade labelling itself, would then be avoided. Also, a larger part of the consumers’ donation may reach the recipient since it does not go via a trade link and thus steers clear of the risk of leakage associated with such a link.”
AgriFood Economics Centre, Lund
Helena Johansson 046 222 07 96
Helena.johansson at agrifood.ul.se
Helena Johansson Vad uppnas med rattvisemarkning [Executive Summary and Conclusions in English]
This hard hitting report reaches similar conclusions to other analyses by economists.
It will never have a big effect
“There are several weaknesses though. Above all the Fairtrade minimum price can never be extended to a larger number of poor farmers. It is, and will remain, a niche market for relatively few producers. Hence, the labelling initiative will never have a significant role in combating world poverty . . . the concept cannot be scaled up to large volumes. . .”
It harms other farmers
“Poor farmers who are outside the Fairtrade system may be negatively affected by reduced demand for conventional alternatives, and the pressure brought to bear on the prices of conventional alternatives as a result of a production-stimulating effect of the minimum price.”
Farmers get a lot less than the headline price
“producers rarely sell their whole production as Fairtrade, which means that the average price then becomes lower than the minimum price/ Only 30 percent of the total production [of Fairtrade cooperatives (ed.)] qualifies for the minimum price and social premium.”
Even Fairtrade farmers are disadvantaged
“Income support in the form of a minimum price has its disadvantages. It is production-linked, i.e., the farmers must grow specific crops to be eligible for the Fairtrade certification. It may create lock-in effects since the farmers cannot change crops.”
Wrongly attacking conventional international trade
“It is important that the labelling initiative does not mislead people into thinking that conventional international trade is exploitative and unfair in its nature. Instead conventional trade has a large potential to promote prosperity among poor people. If consumers cut down their purchases of labour intensive goods from developing countries it will have a negative impact on income levels of farmers and employees living in these countries.”
“How large a share of the higher price paid by a consumer does a producer get?”
It’s good for businesses, but what about the farmer?
“When a sum of money is to be transferred from a consumer via a shop, wholesaler, buyer, roastery, and cooperative to finally reach, e.g. a coffee bean grower, there is a risk that others along the way are enriched at the same time as costs are incurred for maintaining the system.”
It’s good for shopkeepers
“There is also a risk that the shopkeeper charges consumers a higher price than justified to cover the costs for the labelling system.”
It encourages corruption
“Finally there is a risk of corruption since the minimum price is paid to the producer organisation, which then distributes the money among the farmers.
Fairtrade increases production cost
“Small volumes mean that the production cost per unit may be higher than conventional production. The combination of costs of certification and control generally raises the production costs of Fairtrade products: costs that burden the farmers and reduce the income effect of the minimum price.”
An inefficent way of helping farmers
“In sum, transfer efficiency is generally low meaning that minimum prices are generally inefficient in supporting incomes.”
A very inefficient way of helping farmers
“The social premium may be used for building schools etc., but it is an inefficient way of transferring money to this type of project. A direct financial contribution or aid would be more efficient, because of the link to production and its negative effects, not to mention the higher cost of Fairtrade labelling itself, would then be avoided. Also, a larger part of the consumers’ donation may reach the recipient since it does not go via a trade link and thus steers clear of the risk of leakage associated with such a link.”
AgriFood Economics Centre, Lund
Helena Johansson 046 222 07 96
Helena.johansson at agrifood.ul.se
Friday, 4 December 2009
French Economist attacks Fairtrade and Max Havelaar
French economist attacks Max Havelaar Foundation, and Fairtrade
The charges against Max Havelaar (the original Fairtrade brand, the one still used in much of Europe) are detailed in a 500-page book, "Les coulisses du commerce equitable" (Behind the scenes of fair trade), by Christian Jacquiau.
According to figures issued by Max Havelaar, €50 million goes to a million producers in the third world. "Here the dream falls apart," said the author. "They therefore each receive just €50 a year – or €4 a month."
But what's even worse, says Jacquiau, is that it's not even clear if the farmers are actually getting the money.
"There are only 54 inspectors around the world, working on a part-time freelance basis to check and control a million producers. These checks do not take place on the ground but in offices, hotel rooms or even by fax," he says.
"The main beneficiary of the trade could well be a large landowner or even a multinational."
Jacquiau also criticises the "partnership" between a champion of fair trade coffee and the 140 McDonald's outlets in Switzerland.
See also Jacquiau’s article in Le Monde Diplomatique September 2007.
If someone has spent a couple of years getting together the evidence, why doesn’t Fairtrade respond? All they have done so far is the usual, saying Fairtrade is a Good Thing, and refuse to discuss the allegations or the evidence. This is not acceptable when they are collecting tens of millions of pounds of public money, and not passing it on to the farmers.
The charges against Max Havelaar (the original Fairtrade brand, the one still used in much of Europe) are detailed in a 500-page book, "Les coulisses du commerce equitable" (Behind the scenes of fair trade), by Christian Jacquiau.
According to figures issued by Max Havelaar, €50 million goes to a million producers in the third world. "Here the dream falls apart," said the author. "They therefore each receive just €50 a year – or €4 a month."
But what's even worse, says Jacquiau, is that it's not even clear if the farmers are actually getting the money.
"There are only 54 inspectors around the world, working on a part-time freelance basis to check and control a million producers. These checks do not take place on the ground but in offices, hotel rooms or even by fax," he says.
"The main beneficiary of the trade could well be a large landowner or even a multinational."
Jacquiau also criticises the "partnership" between a champion of fair trade coffee and the 140 McDonald's outlets in Switzerland.
See also Jacquiau’s article in Le Monde Diplomatique September 2007.
If someone has spent a couple of years getting together the evidence, why doesn’t Fairtrade respond? All they have done so far is the usual, saying Fairtrade is a Good Thing, and refuse to discuss the allegations or the evidence. This is not acceptable when they are collecting tens of millions of pounds of public money, and not passing it on to the farmers.
Wednesday, 2 December 2009
Fairtrade boss criticises system
Fairtrade claims to monitor its system. It claims to monitor everything about its 5000 plus suppliers. And it claims that the monitoring is independent.
However, Paola Ghillani, a former director of Max Havelaar Switzerland (Max Havelaar is the French and Swiss branch of Fairtrade), spent four years as president of the Fair Trade Labelling Organizations (FLO), which draws up international fair trade standards, monitors certification and controls. She points out that products certified as fair trade do not always live up to the tag due to a lack of proper controls among smaller producers. She says Max Havelaar is seriously weak when it comes to checks.
‘I always said that checks should not be carried out by the FLO but by outside organisations. We need professional, neutral and independent inspectors,’ she said. ‘It is a process I was beginning to put in place in Switzerland. But everything came to a halt after I left,’ she added. www swissinfo.ch/eng/front/detail/ Fair_trade_firm_accused_of_foul_play.html?siteSect=105&sid=6936668&cKey=1154502191000
In 1999, after almost 10 years working in multinational companies, she took over as Managing Director of the Max Havelaar Foundation, a fair-trade organization based in Switzerland. During her time with the foundation, she also worked as a Member of the Board of FLO International (Fair Trade Labelling Organizations) and was elected Chair of the FLO’s Board in 2001, a position which she held until 2004.
Paola Ghillani is a Member of the Board of the International Committee of the Red Cross (ICRC). She also sits on the committees of various organizations, including for ethical investment funds.
""Les consommateurs sont prêts à payer plus cher pour des produits équitables"" www tsr.ch/tsr/index.html?siteSect=323201&sid.
However, Paola Ghillani, a former director of Max Havelaar Switzerland (Max Havelaar is the French and Swiss branch of Fairtrade), spent four years as president of the Fair Trade Labelling Organizations (FLO), which draws up international fair trade standards, monitors certification and controls. She points out that products certified as fair trade do not always live up to the tag due to a lack of proper controls among smaller producers. She says Max Havelaar is seriously weak when it comes to checks.
‘I always said that checks should not be carried out by the FLO but by outside organisations. We need professional, neutral and independent inspectors,’ she said. ‘It is a process I was beginning to put in place in Switzerland. But everything came to a halt after I left,’ she added. www swissinfo.ch/eng/front/detail/ Fair_trade_firm_accused_of_foul_play.html?siteSect=105&sid=6936668&cKey=1154502191000
In 1999, after almost 10 years working in multinational companies, she took over as Managing Director of the Max Havelaar Foundation, a fair-trade organization based in Switzerland. During her time with the foundation, she also worked as a Member of the Board of FLO International (Fair Trade Labelling Organizations) and was elected Chair of the FLO’s Board in 2001, a position which she held until 2004.
Paola Ghillani is a Member of the Board of the International Committee of the Red Cross (ICRC). She also sits on the committees of various organizations, including for ethical investment funds.
""Les consommateurs sont prêts à payer plus cher pour des produits équitables"" www tsr.ch/tsr/index.html?siteSect=323201&sid.
Monday, 30 November 2009
Review of Fairtrade
A Review of the impact of Fairtrade over the last ten years. Valerie Nelson and Barry Pound
Fairtrade has published a brief summary at www * fairtrade.org.uk/resources/natural resources institute.aspx. For some reason it is witholding the actual review. Disturbingly, one of the authors says that the “report is awaiting finalization by Fairtrade Foundation who commissioned it” Why were they not both put on the web the moment they were received? What does “finalization” mean?
The review has been written by an anthropologist and an agriculturist. There is no sign of any economic or marketing analysis. There is no sign from the summary that it addressed the hundred questions raised by me and others.
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