fairtrade products

Conor Woodman has recently put out a second book Unfair Trade, as a follow up to his 2011 book The Adventure Capitalist (the film version of which I reviewed here). The two books sit together well: the first is a travelogue with the unique twist that Conor is aiming to get back home having made more money than he’s spent. The second is a more circumspect look at how trade in and from developing countries could lift more people out of poverty than it currently does.

I found it to be inspiring but also unsettling. Conor gently shows the greater effectiveness of market-driven means to prosperity as against the simplicity of fairtrade solutions, which is a hard message to accept.

He uses fairtrade coffee as an example. To obtain fairtrade certification, a company need only promise that it will always pay, at a minimum, the fairtrade price of US $2.81/pound. However the market price has been far in excess of that for the last five years ($5.73 at time of writing) – it’s a pretty easy promise to make! In exchange coffee sellers get the aura of fairtrade certification.

Meanwhile, other companies working fairly with developing-world suppliers do not get the branding aura they deserve because they are not certified – three examples being Ethical Addictions, the Rare Tea Company and Olam International‘s work in Cote D’Ivoire. These companies go even further, paying suppliers roughly double the market price because they can connect their goods to users interested in their particular blends. Sounds pretty fair to me, but you’d never know it from the label.

Conor also points out that fairtrade organisations receive income from companies to use their logo and they spend it roughly equal proportions on marketing and administration – the money is all spent in the developed world. Food for thought indeed!

The book is available on Amazon UK, including e-book and audio editions.

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Comments
  1. […] This second film we’ll see takes a different approach altogether. It is about Alta Gracia, a former sweatshop in the Dominican Republic that has been reopened as a workplace that pays its employees a living wage and – and this is the most important bit – connected to a reliable market for ethical apparel. Alas, it’s not enough to rely on people’s goodwill to pay above-market prices, you need to supply them with something unique [see related post]. […]

  2. […] is funded by the companies that obtain its certification (rather like FairTrade). This makes me think it will soldier on through the crisis, notwithstanding the harm that’s […]

  3. […] Legislation could in some situations have the perverse effect of lowering standards. Take financial regulation for example: most people involved with finances are behaving honestly at the outset. Then, in response to the actions of a few individuals, the law steps in to set a certain benchmark. That benchmark will most likely be lower than people’s personal standards, as it sets only a minimum standard of behaviour. The normative effect of the law makes them ask themselves, ‘Why should I bother? Here is a clear signal that I don’t need to take as much care as I have been’. How many times have you heard someone say, defensively “But we were acting within the law”? Examples include rules mandating greater participation of women, carbon emissions treaties, and ‘Fair Trade’ standards (see earlier post). […]

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