Leading article: The benefits of a fairer trading system


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

Ashdown Group: Data Scientist - London - £50,000 + bonus

£35000 - £50000 per annum + generous bonus: Ashdown Group: Business Analytics ...

Ashdown Group: IT Project Coordinator (Software Development) - Kingston

£45000 - £50000 per annum: Ashdown Group: IT Project Coordinator (Software Dev...

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Read Next
Nicola Sturgeon and her former boss Alex Salmond  

I voted Yes in the referendum – but that doesn't mean I'm going to vote for the Tory-esque SNP

Alasdair Clark

If I were Prime Minister: I'd shrink the gap between the highest and lowest paid

Marina Warner
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power