WAUNAKEE, Wis. — Consumers are often led to believe that their purchases of Fair Trade certified goods will help reduce global poverty. One new study conducted by the Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda research team concludes consumers are mistaken to believe so.
How have some consumers come to think Fair Trade products reduce poverty?
According to Fairtrade International’s website, many farm workers in developing countries are stuck in “a cycle of poverty.” For example, a farmer works tirelessly but lives in poverty all the same. He sells coffee beans in the global market, but fluctuations in this commodity’s price, which is set internationally, leave him without any guarantee that market prices will always offset production costs. Indeed, during the past few years, coffee bean prices have been so low that the farmer could not turn a profit. He is stuck in a ‘poverty trap.’
Fairtrade International’s website describes the unfairness of global trade today, stating that countries extol free trade, but protect agrarian business at home with subsidies and import taxes. They also have no government safety nets to help farmers when market prices nosedive, while farmers in developing countries cannot readily access market prices. The list goes on.
To combat these unfair conditions, Fairtrade provides farmers with a price floor for their products. The organization also offers a “Fairtrade Premium,” a payment that can be used for development. With these tools, Fairtrade argues poor farmers experience “improved economic stability” and “access to credit” among many other benefits. The organization’s website cites a review conducted by the Natural Resources Institute that supports Fairtrade’s claims.
Fairtrade states that “by supporting and empowering producers, Fairtrade contributes to reducing global poverty — Goal 1 of the MDGs.”
Fairtrade’s methodology might be sound in theory, but a new study found Fairtrade actually disadvantaged the agricultural workers who are oftentimes the most poor and vulnerable: wage workers. If true, this is particularly striking given Fairtrade’s stated belief that “workers should have decent working conditions and earn fair wages for their labour.”
The study points out how previous research, namely from Fairtrade, ignored the dependence on wage labor in the agricultural industry of many African countries. Fairtrade research instead focused on households where family labor predominates. Yet, this can overlook anywhere from 20 to 75 percent of agricultural wage workers, depending on the industry and location. As a result, earlier viewpoints on how Fairtrade impacted poor farm workers failed to acknowledge an essential group of laborers and, as a result, were incomplete.
The new study improves public understanding of the situation, and the findings are discouraging for Fairtrade supporters. First, the study demonstrates how wage workers have less education, fewer assets and poorer diets than non-farm workers. Fairtrade aims to fix this problem, but the study found Fairtrade certified farms paid wage workers less, offered fewer days of work and provided poorer working conditions than non-Fairtrade certified and foreign-owned uncertified large-scale farms.
For example, only 20 percent of workers in Ugandan Fairtrade coffee production had access to clean toilets, whereas 82 percent in non-Fairtrade certified production had access. And in the Ethiopian flower industry, zero percent of workers on Fairtrade certified farms earned high wages whereas 42 percent of workers on non-Fairtrade certified farms did.
As expected, results varied from industry to industry and location to location. However, the overall picture led researchers to conclude Fairtrade did nothing to improve the wages or working conditions of wage workers. Fairtrade’s claims to reduce global poverty seem dubious as a result.
Consider the testimony of one unidentified farm owner who was interviewed in the study. The man ran a farm that boasted excellent working conditions, according to researchers.
His opinion of Fairtrade?
“The costs of and time wasted with Fairtrade certification were clearly excessive compared to the expected benefits,” the farm owner said.
– Ryan Yanke
Photo: The Guardian