"Fair Trade" coffee is yet another example of people who may be well-intentioned harming those they seek to help through their ignorance. Free trade and competition have long been, and will long remain, the main drivers of economic growth and higher living standards. Interventionist schemes which deny this are doomed to failure. For those who seek to help the poor in other countries, compassion needs to be combined with knowledge and wisdom.

I agree, Faustino, good intentions are not enough to deliver good results, and in the case of distorting trade with developing countries, often have the opposite effect.

The ideological basis of the model of development that 'fair traders' are trying to foist on developing countries is evident in the conditions they impose - only non-employing farmers organised in collectives get to benefit from higher prices.

There are shades of cultural/economic imperialism in these efforts to manipulate the development path and business choices of poor farmers.

Am I missing something? Tim Wilson quoted figures of coffee being worth US$10 billion per annum on the commodities market, with up to 25 million farmers in the trade.

By my arithmetic that's $US400 per farmer. Per year.

That's $US1.095 per day. In other words, coffee-growing provides the average coffee farmer a daily income equal to the UN's official definition of immiserating poverty.

So you can re-arrange the deckchairs however you like, but unless there's going to be higher prices, or fewer coffee farmers, ain't nobody in the coffee plantations gonna prosper anytime soon...

...how is this really so very different from the colonial plantation days circa 1906? The farmers now own their very own poverty trap? I'm sure that's a comfort to them.

Yes, what this beautiful IPA article fails to note is that free trade assumes a 'level playing field'. Fair trade may favour certain types of interaction of producers with the market, but only because it acknowledges the historical legacy of years of protection from the so called 'developed' countries, and tries to rectify it, rather than insisting on countries opening up their markets to the whims of the global market.

Dingo1, free trade does not assume a level playing field, but it does try to promote one, in the interests of both producers and consumers.

The “fair trade” movement is an ideologically-driven (and to my mind, patronising and presumptuous) attempt to impose a specific anti-development business model on third world countries, supposedly for their own good. It goes much farther down the road of using the global market to subject poor farmers to the whims of westerners than free trade ever would

I've tried fair trade coffees but they are similar or identical in flavor to similar high quality imported coffees.

The fact that our urban liberals consider it more fashionable to agitate agianst foreign wars and send truckloads of cash overseas because someone says its "fairer" is a sad indictment on their attitudes to local issues of poverty, marginalisation etc.

Local causes go begging for money and volunteers, no-one marches in the street for the local impoverished, no-one gives a damn about our problems.........yet mention some war on the other side of the world and they will marshall untold depths of volunteer protest labor etc.

The local poor are the most forgotten folks. Our causes are unfashionable. Urban elites prefer feelgood causes that won't challenge their economic security or access to special benefits such as margin lending deductiosn or negative gearing benefits, or trusts to split tax to build funds for college fees for their pampered progeny.

How do I know all this?? I grew up in that class and am familiar with its way of thinking and attitudes. I since have spent many years behind the 8-ball. If you're local, poor and isolated, no-one gives a stuff but if you're some basket-weaver in latin america, you're a star.

Well, now that chip's off your shoulder, have you anything interesting to say about coffee-growing? Only that's what this article, and this discussion, are supposed to be about, is all. :0)

Based on the stats quoted, we have US$10 billion per annum shared amongst up to 25 million farmers. It seems we have too many coffee-growers and/or too low commodity prices.

But this article proposed no solutions, it was just attacking one of the trial schemes currently out there called "fair trade". But since the author offered only the status quo by way of alternative - $US400 per farmer per year - it's a bit of non-article, really.

Rhian,

I am under the impression that free trade is based on the principles of comparative advantage, which assumes that the outcome of such trade will not be a level playing field as you state, but a situation in which all will gain, only some more than others. Free trade does not promote a level playing field.

Free trade is also an ' ideologically driven' development model. How much choice producers in most countries ( including most 'developed countries') have in regards to dealing with the market, and how much power do these producers have in the market against the more powerful countries, which have and still do protect their own domestic markets, while at the same time pushing other countries to open up theirs?

I personally feel that the fair trade movement does not have all the answers –it is only a stepping stone. But any trade system that promotes a fair and equitable exchange, in which a producer is paid at least enough to cover the costs of production, must be at least preferable to one which is as fickle as the current free trade system.

Please explain exactly how fair trade subjects ‘poor farmers’ to the whims of ‘westerners

Dingo1

The benefits free trade promotes are indeed based on comparative advantage – the idea that both parties gain from trade if their relative costs are different. The “level playing field” is one where sellers compete on the quality and price of their products and consumers are free to buy the products they most want, without the interference of government tariffs, subsidies, quotas etc. There is no expectation that both countries will gain equally in the process, only that both will gain.

“Fair trade” subjects poor farmers to the whims of westerners far more than free trade because it places so many requirements on producers before than can earn the fair trade label – they must be co-operatives not trading as individual businesses, they cannot be employing businesses, for some certificates they must use organic farming methods. For better or worse, to a free trader all coffee beans (of comparable quality) are equal.

My main concern with "fair trade" is that such models may actually work against the development of economic structures and incentives that will help poor countries sustain economic growth. They discourage productivity improvements, innovation, business growth and entrepreneurship

"Based on the stats quoted, we have US$10 billion per annum shared amongst up to 25 million farmers. It seems we have too many coffee-growers and/or too low commodity prices."

Mercurius, you assume that all of those 25 million farmers grow nothing except coffee. This is certainly not the case, especially in the developing world.

It is my understanding that "fair trade" requires collectives to ensure the farmers are paid a "reasonable" price for their product(still low by our standards, but better than the money the "non-fair trade producers" workers(serfs)get), that the collectives do not have children working the farms, and that sustainable(especially with "organic fair trade") farming is pursued, so that the cost of our cheap coffee is not paid for by the environments (and therefore the peoples) of developing countries.

I'm also of the understanding that "fair trade" is entirely voluntary- no organisation is forced to be "fair trade", and no consumer is forced to buy "fair trade".

If this article, and the responses to it, are an effort to educate the consumer (surely a goal of anyone in favour of free trade), then they are to be applauded. I only wonder at why the education is one sided. What are the working conditions, organisational exploitations (cronyism), and environmental costs of other forms of farming?

I realise the article has a specific point to make, but it hasn't really compared many of the goals of "fair trade" with the comparable outcomes of non-fair trade products.

By presenting "fair trade" coffee as a "bourgeois luxury", the author has suggested that a "premium" price is really all we can expect from "fair trade" coffee. Wilson says that "The campaign against free trade in coffee will only work to realign the coffee market in the interests of the select few and against the interests of non-fair trade producers and consumers."

If consumers want to buy a product because it is "fair", or environmentally friendly, or because it looks good, tastes good, is trendy, or is cheap, or is "local", then that is their choice. If that isn't the free market in action, I don't know what is.

Free market "consultants" seem to have an issue with this consumer choice, only when it is not supporting "efficient" big business, that gains efficiency (i.e. low prices) from exploiting labour, the environment, and by misleading advertising and hiding production methods, to maximise market share, even the consumer.

Wibble - I'm all for consumers making choices that reflect their values as well as the things they like to eat/wear etc. Dolphin-friendly tuna, ethical investment funds, free-range eggs, cosmetics not tested on animals – the demand for all of these is a legitimate expression of consumer choice. So long as the consumers of these products don't try for force (rather than persuade) others to use them to, I'm all for them (in fact I choose to use many such products myself).

The difference with “fair trade” is that it is not fairer than other forms of trade and it does not help to improve conditions in poor countries. So it’s conning consumers. And there’s no consumer protection laws to protect us from the false or exaggerated claims of the people who peddle it. It’s the economic equivalent of aromatherapy – nice idea, completely ineffectual.

I wouldn’t ban aromatherapy any more than I’d ban “fair trade” products, but in both cases I applaud anyone who points out that they will not deliver what they claim.

Fair trade coffee like 'organic coffee' is just a marketing excercise aimed at the cappuchino drinking middle class that frequents coffee shops in our capital cities and want the additional buzz that comes out of the feeling that they are about contributing to a 'Fairer trade' and drinking a supposedly healthier coffee.

'Organic' and 'coffee' is a contradiction in terms since any cup of coffee will contain a concentrate of 'natural' pesticides and insecticides that will overwhelm all 'unnatural' and synthetic pesticides by 1000 to 1.

It has been calculated that one cup of coffee contains the equivalent of one years consumption of the traces of synthetic pesticides on our vegetables, cereals , and other food stuffs.

Fortunately the human liver is eminently well suited to detoxify all the nasties you find in coffee so I am happy to drink one cup of coffee a day but pay extra for organic produce is plain silly.