Thursday, November 04, 2010

Free-Market Fundamentalists against FairTrade

It's funny how the news often comes in matched pairs. Today, the BBC apologises to Band Aid for reporting wrongly that Band Aid money was diverted into military use. Today also there is a report from a free-market think group that Fair Trade is not much good.

First, the BBC. Band Aid, and the aid movement generally, took a knock to its reputation from the BBC report which implanted the idea that Band Aid money went to insurgent groups. Clearly the apology, as is the way with these things, had less impact on the public mind than the original report. Restorative justice demands that the BBC should run a few documentaries on the work of Band Aid in order to make reparations. I hope Bob Geldof will press for this.

Now, FairTrade. The report came from the Institute for Economic Affairs. It is their second pop at FairTrade, the first being in 2007. The Guardian report, by Simon Bowers, does go as far as to mention that they are a free-market think tank. But the damage is done by the headlines:
Guardian "Fairtrade Foundation accused of failing coffee farmers". 
Mail: "Unfair trade: Ethical food ‘is not lifting Third World farmers out of poverty’"
Telegraph: "Fair Trade does not help the poorest, report says"

FairTrade carry a rebuttal here. 
Noteworthy is the fact that the$1570 registration cost, widely reported in the newspapers, relates to groups of 50 farmers, not to each individual farmer. 

They also rebut the suggestion that only middle income countries benefit. FairTrade says "We work with raisin farmers in Afghanistan, coffee growers in the Democratic Republic of Congo, Rwanda, Ethiopia and Tanzania and cocoa farmers in Cote d’Ivoire to name just a few."

In fact, the IEA report is not totally critical, much as they would like to be. They say:
  • Fair Trade brings certain benefits to producers, such as guaranteed prices, a social premium and the enforcement of particular labour conditions.
  • Criticisms of Fair Trade are also exaggerated. At its current
    level of penetration it is likely to do little harm in terms of
    distorting markets.
Deep in the report are references to slave labour, (excluded by FairTrade, obvs). They complain about exclusion of child labour: "A prohibition on child labour may be damaging for families – and also for children who may be forced into other dangerous occupations." 

In the end, free-marketeers are ideologues and fundamentalists, steadfast believers in the dogma that the free market delivers the best of all possible worlds, despite all the evidence to the contrary.

What I find interesting is that free-marketeers are often also Christian fundamentalists, who believe in Original Sin. The question for them is this:
How come that sinful men, competing against each other for money, the love of which is the root of all evil, produces the best of all possible worlds?

The damage has been done. The headlines are out there, and the mainstream media will not dig deeper into the issue, because the mainstream media deals in impressions, not facts.


Ethics Girls said...

I also get frustrated with these kind of easy knocks on fairtrade. Having worked in fairtrade for quite awhile, I do think that Fairtrade could do better to defend itself. At the beginning it set off with a simple message that really worked for consumers - a premium price, going to benefit the farmers. So now that is continually how Fairtrade gets knocked, and when you do get into the margins / prices in a simple way then its really difficult to justify the benefits of Fairtrade in a quite & simple way.
I do wonder why no one really bangs home the message of the direct & long term trading relations, the producer developement support to upskil the farmers and that its a system that works with farmer coops & associations. When you meet the farmers, they say its the trading relationships that are number one in the benefits chart for them. Plus the most important thing about Fairtrade is where it starts - its starts with the Farmer - the pricing, the product all begin with the farmers. Conventional trade starts at the other end with the price & profit margin for the brand / company. The difference is significant. If we could move to this kind of debate then Fairtrade stands out for its continual intent to develop and improve. Its never said it has all the answers. Me - i will keep putting these ideas across in the forums, but I do find that I have been doing this for awhile now and we don't seem to be moving on..

DocRichard said...

Hi Girls
Thanks for that. We have to be resigned to this kind of knocking from the free-marketeers, because they feel threatened by anything that smacks 9to them) of a license for corporations to do whatever they bloody well choose. Unfortunately, they hold 9/10ths of the media in the palm of their hands, which means that our neighbours are brainwashed with a steady drip-drip of misinformation.