Criticism of Fair Trade

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Criticism of Fair Trade

Noah Enelow lists some discussion points in his brochure "Fair Trade: an Introduction". He states that:

“Fair Trade does not address the root cause of low coffee prices: oversupply. Economist Tim Harford writes, ‘…The numerous brands of fair trade coffee are likely to improve the income of a few coffee producers… But they cannot fix the basic problem: too much coffee is being produced. At the slightest hint that coffee farming will become an attractive profession, it will always be swamped with desperate people who have no alternative. …Only broad-based development … will ever lift the living standards of the very poor.’ (Harford, Undercover Economist, 229)


Rebuttals
-Fair Trade is designed as a complement, not a substitute, for good policy. The system can work in tandem with policies on the international level to address the oversupply of coffee, including agricultural extension services to help farmers diversify their crops away from coffee.
-Harford overestimates how easy it is to get into coffee farming. He writes: ‘High coffee prices will always collapse, until workers in sweatshops become well-paid (workers)… who don’t find the idea of being even a prosperous coffee farmer attractive.’ (Harford, 229) However, he doesn’t present evidence for how many people enter and exit coffee farming each year. Is it so easy for workers to shift from sweatshops to coffee fields?

- Fair Trade is still capitalist: it doesn’t work towards building an alternative to production for profit on the market.


Rebuttals
-Fair Trade encourages democratic producer organization through agricultural co-operatives made up of small growers. It thus offers an alternative to the plantation system of capitalist agribusiness that has dominated commercial farming from Bolivia to Borneo. Thus, while Fair Trade works through the market, it also weakens the system of wage labor, which Marx identified as the locus of exploitation in the capitalist system.
-Fair Trade, through providing increased assets to small farmers, has the capacity to change the class structure in societies such as Peru, Brazil, and Indonesia, which are marred by extreme inequality in land and asset ownership. The resulting increase in small farmers’ political power can usher in a new era of socialist political organization, as the election of Evo Morales in Bolivia has recently shown us. “

 

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