Leading article: The benefits of a fairer trading system

Share

Ethical consumers should be celebrating. This year's "Fairtrade Fortnight" has kicked off with an announcement from Tate &Lyle that all its sugar will be designated Fairtrade by next year. This represents the biggest ever Fairtrade switch by a UK company. It follows Sainsbury's promises that all of its bananas are to be Fairtrade and Marks & Spencer's pledge to use more Fairtrade cotton in its clothing ranges.

It has also been revealed that more consumers than ever are buying Fairtrade products. The UK market is now worth almost £500m a year. Sales rocketed during 2007, registering an 80 per cent increase on 2006. We are on course to spend £2bn a year on such products in Britain by 2012.

But with success comes greater scrutiny, and some are suggesting that Fairtrade products are of little benefit to local producers in the developing world. There are also suggestions that the higher price of Fairtrade goods boosts the profits of retailers rather than producers. So what is the truth? No one would dispute that Fairtrade products cost more than the alternatives. This is because Fairtrade demands that farming collectives be paid a stable price, above market rates, to cover the cost of sustainable production, plus a premium to be invested in community projects. This inevitably means retail prices are higher. Pure free-marketers argue that such price-fixing distorts trade.

This is true up to a point. But such distortions are nowhere near as damaging as the tariff barriers in the rich world on developing world produce and the subsidies we pay our own farmers. Fairtrade can hardly be classed alongside the European Union's Common Agricultural Policy or the US Farm Bill as offences against the principle of free trade. And in any case, such Fairtrade distortions are not so different from UK company pension schemes, or other assorted employee benefit systems. It is not unreasonable for UK consumers to demand that farmers in the developing world be awarded similar sorts of protections and benefits as workers over here.

Another complaint about Fairtrade is that it "traps" poor countries in a backward agricultural economy, when they would otherwise be modernising farming techniques or moving into other markets. But this ignores the fact that greater profits from agriculture can provide a springboard into other economic areas. For instance, it is common for Fairtrade co-operatives to build labour-saving infrastructure. And tellingly, Ecuadorean coffee farmers believe Fairtrade will give their children a chance to do something other than grow coffee when they grow up.

In the meantime, Fairtrade brings tangible benefits. In Kenya more than 6,000 farmers on the Iriaini tea plantations in the central province have seen their incomes increase by a third because of Fairtrade, enabling them to pay for school fees and healthcare that would otherwise have been beyond their means. The supplementary payments have also funded a new bridge and the construction of a centre for orphaned children. Elsewhere, farming collectives have benefited from new education facilities and clean water supplies.

It is true that Fairtrade, on its own, will not end poverty in the developing world. A far bigger challenge is to bring down the tariff barriers and subsidy system operated by the rich world. And the system must be carefully scrutinised to ensure that the Fairtrade price mark-ups reach producers and are not skimmed off by retailers. But as a practical way for consumers to demand a fairer deal for farmers in the developing world, the Fairtrade system is an effective scheme, and its rapid growth should indeed be a cause for celebration.

React Now

Latest stories from i100
iJobs Job Widget
iJobs General

Associate Recrutiment Consultant

£18000 - £23000 per annum + Uncapped OTE: SThree: SThree Group have been well ...

Trainee Recruitment Consultant

£18000 - £23000 per annum + OTE: SThree: Real Staffing Group is seeking Traine...

Year 6 Teacher (interventions)

£120 - £140 per day: Randstad Education Leeds: We have an exciting opportunity...

PMLD Teacher

Competitive: Randstad Education Manchester: SEN Teacher urgently required for ...

Day In a Page

Read Next
 

Letter from the Political Editor: Cameron's unexpected tax pledges give the Tories home advantage

Andrew Grice
President Barack Obama walks with U.S. Secret Service agents to Air Force One at Los Angeles International Airport in Los Angeles, Calif., May 8, 2014.  

Obama's Secret Service has become sloppy with its delusions of Hollywood grandeur

David Usborne
Italian couples fake UK divorce scam on an ‘industrial scale’

Welcome to Maidenhead, the divorce capital of... Italy

A look at the the legal tourists who exploited our liberal dissolution rules
Time to stop running: At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity

Time to stop running

At the start of Yom Kippur and with anti-Semitism flourishing, one Jew can no longer ignore his identity
Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

Tom and Jerry cartoons now carry a 'racial prejudice' warning on Amazon

The vintage series has often been criticised for racial stereotyping
An app for the amorous: Could Good2Go end disputes about sexual consent - without being a passion-killer?

An app for the amorous

Could Good2Go end disputes about sexual consent - without being a passion-killer?
Llansanffraid is now Llansantffraid. Welsh town changes its name, but can you spot the difference?

Llansanffraid is now Llansantffraid

Welsh town changes its name, but can you spot the difference?
Charlotte Riley: At the peak of her powers

Charlotte Riley: At the peak of her powers

After a few early missteps with Chekhov, her acting career has taken her to Hollywood. Next up is a role in the BBC’s gangster drama ‘Peaky Blinders’
She's having a laugh: Britain's female comedians have never had it so good

She's having a laugh

Britain's female comedians have never had it so good, says stand-up Natalie Haynes
Sistine Chapel to ‘sing’ with new LED lights designed to bring Michelangelo’s masterpiece out of the shadows

Let there be light

Sistine Chapel to ‘sing’ with new LEDs designed to bring Michelangelo’s masterpiece out of the shadows
Great British Bake Off, semi-final, review: Richard remains the baker to beat

Tensions rise in Bake Off's pastry week

Richard remains the baker to beat as Chetna begins to flake
Paris Fashion Week, spring/summer 2015: Time travel fashion at Louis Vuitton in Paris

A look to the future

It's time travel fashion at Louis Vuitton in Paris
The 10 best bedspreads

The 10 best bedspreads

Before you up the tog count on your duvet, add an extra layer and a room-changing piece to your bed this autumn
Arsenal vs Galatasaray: Five things we learnt from the Emirates

Arsenal vs Galatasaray

Five things we learnt from the Gunners' Champions League victory at the Emirates
Stuart Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

Lancaster’s long-term deal makes sense – a rarity for a decision taken by the RFU

This deal gives England a head-start to prepare for 2019 World Cup, says Chris Hewett
Ebola outbreak: The children orphaned by the virus – then rejected by surviving relatives over fear of infection

The children orphaned by Ebola...

... then rejected by surviving relatives over fear of infection
Pride: Are censors pandering to homophobia?

Are censors pandering to homophobia?

US film censors have ruled 'Pride' unfit for under-16s, though it contains no sex or violence