Response to The Economist (Good Food, 9/12/06)

15 December 2006

The recent article published by The Economist (Good Food, 9/12/06) manages to both praise and condemn ethical shoppers, whilst fundamentally misrepresenting the supply-and-demand basis on which the international Fairtrade system works.

Consumers willingly buy Fairtrade products, knowing that whatever price they pay at the till, the producer organisations have received an agreed and stable price, and money to invest in their own communities. In fact, price differentials for shoppers are rapidly diminishing as economies of scale are derived from this growing market. At the producer end, Fairtrade is not a subsidy but a market responsive mechanism. It does not fix prices at a local level: certified producers still need to contract with buyers prepared to trade under agreed Fairtrade terms, and many continue to sell into both conventional and Fairtrade markets.

The overproduction theories described in the article are unfounded. Producer communities are all too aware of the risks of over-reliance on one commodity, and quick to seize on the new opportunities that involvement in the Fairtrade scheme may open up. Far from increasing production (unless responding to specific additional demands), Fairtrade farmers’ groups frequently invest in developing their market knowledge, in building up their export or processing capability, or in diversification programmes, all of which require investment. Examples include coffee growers developing citrus or macadamia nuts, banana farmers moving into other premium tropical produce, or investment in alternative income-generation projects such as eco-tourism, or in community health and education programmes.

FLO International and its Member Labelling Initiatives play an active role in the promotion of trade justice in both the political and economic spheres. This commitment can be seen in the activities of the Fair Trade Advocacy Office, part-funded by FLO, which lobbies European and International policy-makers for fairer trade rules. FLO has always promoted the need for people to exercise both their political and consumer power. As the Economist rightly concludes, the rise of the ethical shopping movement sends a powerful signal to governments of the public appetite for change on these issues. Equally powerful signs of hope lie in the thousands of small victories being won at local level by producer communities able to invest in processing facilities, better schools, health clinics, clean water, internet access, recycling schemes as a result of selling to Fairtrade markets. As Raymond Kimaro of the Kilimanjaro Native Co-operative Union commented at G8 events this year in Edinburgh: "Pay us a fair price for our coffee, and we will make poverty history for ourselves."



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