Fairtrade profits rise, but is the small farmer missing out?

More supermarkets are taking up the brand which sounds so ethical and offers attractive profit margins

Once, people laughed at the notion that fair trade could infiltrate the profit-hungry world of retail. Yet new figures from the Fairtrade Foundation will reveal tomorrow that UK consumers take the issue very seriously, spending half a billion pounds on Fairtrade-branded products last year.

However, the rush to fair trade is prompting questions about how "fair" it really is to small farmers in developing nations. The rate of sales growth rocketed during 2007, up 80 per cent on the previous year as companies from Sainsbury's to Virgin Atlantic stepped up their commitment to fairly traded goods. The total value of Fairtrade sales hit £490m, up from £273m in 2006.

Sainsbury's move to stock only Fairtrade bananas meant the supermarket chain almost tripled the value of its Fairtrade sales to £140m. Its tea, coffee, hot chocolate and sugar brands will be next to get the Fairtrade badge, helping to put the Fairtrade Foundation, which licenses the mark to products sold in the UK, on course to quadruple its annual sales to £2bn by 2012.

Speaking ahead of Fairtrade fortnight, which starts today, the Fairtrade Foundation's executive director, Harriet Lamb, said: "People laughed when we first started talking about fair trade [in 1994]. But now it is an increasing part of consumers' shopping habits."

With a recent poll showing that more than half of UK shoppers recognise the Fairtrade logo, even the big brands are waking up to the selling power of the black, green and blue symbol. Tate & Lyle this weekend became the biggest company yet to carry it, promising to make all of its retail range Fairtrade by the end of 2009.

It isn't just Sainsbury's giving Fairtrade products more shelf space: the Co-operative Group has switched all its own-brand hot beverage drinks to Fairtrade; Waitrose only sells Fairtrade bananas and Marks & Spencer is expanding the Fairtrade clothing range to its fashionable Limited Collection.

Cynics claim their devotion to the cause is less than altruistic, however, pointing to the higher profit margins some Fairtrade products enjoy and the fact that the goods provide a useful marketing tool as supermarkets attempt to paint themselves a greener hue.

Tim Harford, author of The Logic of Life, who first highlighted that some chains were profiteering from Fairtrade, said: "At the UK consumer end, some companies have charged a far higher mark-up on Fairtrade products than ever goes to producers. Fairtrade is about a promise for fair value to the producer, not a fair price to the consumer."

Research this month by the consumer group Which? found that Fairtrade products were 9 to 16 per cent more expensive per gram than their non-Fairtrade equivalents. Philip Booth, at the Institute of Economic Affairs, a free-market think tank, said: "How much of that higher price finds its way back to the grower?"

Douglas Holt, L'Oréal professor of marketing at Oxford's Saïd Business School, said the extra amount that Fairtrade producers received was "nice but relatively trivial". He added: "Until you have the whole value chain, especially retailers, buying into Fairtrade and taking lower margins so they can pass on as much profit as possible, Fairtrade can never make more than a marginal difference."

Other critics go further, claiming the Fairtrade system leaves unaccredited farmers worse off. A new report from the Adam Smith Institute criticises the movement's core stipulation: that farmers must belong to co-operatives to get the Fairtrade premium.

Even Tate & Lyle's move will help only those farmers supplying the retail branded side of its business, not its bigger ingredients arm. Claire Melamed, head of trade and corporates at ActionAid, said: "Fairtrade is still essentially a niche product. The challenge is to get all trade conducted according to much fairer principles."

Where it works, though, the fair-trade movement is much feted. For more than 6,000 farmers on the Iriaini tea plantations in Kenya's Central province, Fairtrade has increased their income by about a third, paying for school fees and healthcare costs that for generations have been beyond them.

"Fairtrade is not just about the money. It changes the people's attitude. [It also] creates a better product," said Matthew Nd'enda, the unit manager of the Iriaini plantation. Bridges have been built, leaf collection centres upgraded and a centre for orphaned children has been established.

That's the image UK shoppers will be buying into when they next buy a Fairtrade product.

To have your say on this or any other issue visit www.independent.co.uk/IoSblogs

Start your day with The Independent, sign up for daily news emails
News
The guide, since withdrawn, used illustrations and text to help people understand the court process (Getty)
newsMinistry of Justice gets law 'terribly wrong' in its guide to courts
News
Bobbi Kristina Brown with her mother Whitney Houston in 2011
people
News
Starting the day with a three-egg omelette could make people more charitable, according to new research
scienceFeed someone a big omelette, and they may give twice as much, thanks to a compound in the eggs
News
Top Gun actor Val Kilmer lost his small claims court battle in Van Nuys with the landlord of his Malibu mansion to get back his deposit after wallpapering over the kitchen cabinets
people
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
News
The actress Geraldine McEwan was perhaps best known for playing Agatha Christie's detective, Miss Marple (Rex)
peopleShe won a Bafta in 1991 for her role in Oranges Are Not The Only Fruit
News
newsPatrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
News
Robert Fraser, aka Groovy Bob
peopleA new show honours Robert Fraser, one of the era's forgotten players
Life and Style
Torsten Sherwood's Noook is a simple construction toy for creating mini-architecture
tech
Sport
David Silva celebrates with Sergio Aguero after equalising against Chelsea
footballChelsea 1 Manchester City 1
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Online Media Sales Trainee

£15000 - £30000 per annum: Recruitment Genius: Now our rapidly expanding and A...

Recruitment Genius: Public House Manager / Management Couples

£15000 - £20000 per annum: Recruitment Genius: Are you passionate about great ...

Recruitment Genius: Production Planner

£20000 - £30000 per annum: Recruitment Genius: This fast growing reinforcing s...

Recruitment Genius: General Factory Operatives

£18000 - £35000 per annum: Recruitment Genius: This fast growing reinforcing s...

Day In a Page

As in 1942, Germany must show restraint over Greece

As in 1942, Germany must show restraint over Greece

Mussolini tried to warn his ally of the danger of bringing the country to its knees. So should we, says Patrick Cockburn
Britain's widening poverty gap should be causing outrage at the start of the election campaign

The short stroll that should be our walk of shame

Courting the global elite has failed to benefit Britain, as the vast disparity in wealth on display in the capital shows
Homeless Veterans appeal: The rise of the working poor: when having a job cannot prevent poverty

Homeless Veterans appeal

The rise of the working poor: when having a job cannot prevent poverty
Prince Charles the saviour of the nation? A new book highlights concerns about how political he will be when he eventually becomes king

Prince Charles the saviour of the nation?

A new book highlights concerns about how political he will be when he eventually becomes king
How books can defeat Isis: Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad

How books can defeat Isis

Patrick Cockburn was able to update his agenda-setting 'The Rise of Islamic State' while under attack in Baghdad
Judith Hackitt: The myths of elf 'n' safety

Judith Hackitt: The myths of elf 'n' safety

She may be in charge of minimising our risks of injury, but the chair of the Health and Safety Executive still wants children to be able to hurt themselves
The open loathing between Barack Obama and Benjamin Netanyahu just got worse

The open loathing between Obama and Netanyahu just got worse

The Israeli PM's relationship with the Obama has always been chilly, but going over the President's head on Iran will do him no favours, says Rupert Cornwell
French chefs get 'le huff' as nation slips down global cuisine rankings

French chefs get 'le huff' as nation slips down global cuisine rankings

Fury at British best restaurants survey sees French magazine produce a rival list
Star choreographer Matthew Bourne gives young carers a chance to perform at Sadler's Wells

Young carers to make dance debut

What happened when superstar choreographer Matthew Bourne encouraged 27 teenage carers to think about themselves for once?
Design Council's 70th anniversary: Four of the most intriguing prototypes from Ones to Watch

Design Council's 70th anniversary

Four of the most intriguing prototypes from Ones to Watch
Dame Harriet Walter: The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment

Dame Harriet Walter interview

The actress on learning what it is to age, plastic surgery, and her unease at being honoured by the establishment
Art should not be a slave to the ideas driving it

Art should not be a slave to the ideas driving it

Critics of Tom Stoppard's new play seem to agree that cerebral can never trump character, says DJ Taylor
Bill Granger recipes: Our chef's winter salads will make you feel energised through February

Bill Granger's winter salads

Salads aren't just a bit on the side, says our chef - their crunch, colour and natural goodness are perfect for a midwinter pick-me-up
England vs Wales: Cool head George Ford ready to put out dragon fire

George Ford: Cool head ready to put out dragon fire

No 10’s calmness under pressure will be key for England in Cardiff
Michael Calvin: Time for Old Firm to put aside bigotry and forge new links

Michael Calvin's Last Word

Time for Old Firm to put aside bigotry and forge new links