• Fair trade

Fair trade

"Fair Trade" is used to describe all generic attempts to make global trade serve poor farmers better, through labelling schemes. The Fair Trade movement comprises a number of organisations that encourage the sale of retail Fair Trade goods for which the producer receives guaranteed Fair Trade terms. This report argues that Fair Trade is unfair. Fair Trade offers only a small number of farmers higher and fixed prices for their goods at the expense of others. The report claims that Fair Trade does not aid economic development, and it only helps landowners.
 
Fairtrade is a foundation belonging to the Fair Trade movement. The report criticises Fairtrade, showing that most farmers helped by Fairtade are in Mexico, a relatively developed country, and not in places like Ethiopia. It also demonstrates that only 10% of the premium consumers pay for Fairtrade actually goes to the producer, while retailers pocket the rest. Some additional critical points about Fairtrade are:

• Fairtrade makes some farmers worse off

• most Fairtrade-certified crops are not in Fairtrade products

• Fairtrade is irrelevant since its market share continues to remain irrelevant to large scale poverty relief

• the Fairtrade system is open to abuse in a number of ways

• belonging to the Fairtrade family introduces farmers to novel risks

• Fairtrade does not bring the majority of participants out of poverty

The report wonders whether a "fixed price" actually is the best way to help poor farmers. And does sustaining farmers on the land sound like a good strategy for economic development in the global south? The report concludes that free trade is the fair trade, indicating that it is the most effective poverty reduction strategy the world has ever seen.

The report argues in favour of free trade. It states that the best way to help the poor of the developing world is to campaign for an end to tariff barriers, both at home and abroad, and to buy more of their goods. It invokes the experiences of India and China, where people are being lifted out of poverty through embracing free markets. It also cites the Hong Kong case, which was very poor before it overtook the UK.

The report lastly notes that the consumer now has a wide variety of ethical alternatives to Fairtrade. The report illustrates 18 cases which represent more effective ways to fight poverty, increase the poor's standard of living and aid economic development.

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