Doubts about Fair Trade

According to The Economist there is a long history of efforts to distinguish products that have been made more ethically than others. In the late 18th century, anti-slavery campaigners urged British consumers to boycott sugar from the West Indies in favour of supplies from India. Today's fair-trade movement took off in the 1960s, mostly in religious organisations that wanted to help the poor, whom they saw as losers in the global trading system. Fair Trade is a really important issue for discussion.

There's been a lot of debate about the future of Fair Trade. The Economist reviews a book that takes a negative viewpoint, arguing that the label is a failure. Ndongo Samba Sylla, a Senegalese development economist argues that things started to go wrong in the mid-1980s when leaders of the movement decided to enter mainstream consumer markets by labelling produce as fair trade if it met certain production rules. Among the problems has been a proliferation of labels and organisations that make a living from certification and licensing use of the labels. There are over 600 labels in Britain alone. This has blurred the definition of what qualifies as fair trade.

Furthermore the author argues that there is little evidence that fair trade has lifted many producers out of poverty. And why the focus on agricultural produce, when a booming fair-trade manufacturing sector potentially would help far more countries? And most of the benefit from fair-trade produce seems to stay where it is consumed. According to Mr Sylla's calculations, for each dollar paid by an American consumer for a fair-trade product, only three cents more are transferred to the country it came from than for the unlabelled alternative.

I'm not totally convinced, and still would like to support the Fair Trade concept – but recognise that we should all try to avoid policies and practices that make us feel good, rather than actually do any good. According to the review, that's also the book's conclusion: so far, the fair-trade labelling movement has been more about easing consciences in rich countries than making serious inroads into poverty in the developing world.