AL_DA_GREAT
amour absinthe révolution
Globalisation is evil, fairtrade or not. If you are buying local however go for fairtrade.
Is Fair Trade good or bad?
- Thread starter Adebisi
- Start date
Perhaps Fair Trade is getting popular because charity has got a bad name. All the objections to it being charity from supporters in this thread is an indication.
If you look at Fair Trade as charity it seems like a relatively successful distribution method that could succeed where traditional charity organizations fails.
However if wealth distribution on a large scale is the goal then good ol' vanilla free trade is probably best. Since both parties benefit on it (compared to no trade), it most likely could happen. The happen part is often forgotten when plans for world wide poverty reduction is drawn up.
If you look at Fair Trade as charity it seems like a relatively successful distribution method that could succeed where traditional charity organizations fails.
However if wealth distribution on a large scale is the goal then good ol' vanilla free trade is probably best. Since both parties benefit on it (compared to no trade), it most likely could happen. The happen part is often forgotten when plans for world wide poverty reduction is drawn up.
Elta
我不会把这种
I knew it since I first entered a Starbucks, because I can read.
Oerdin
Deity
It's a double edged sword.
Formaldehyde
Both Fair And Balanced
Ah. Well there's the difference. I roast, grind, and brew my own coffee instead of paying $3 a cup for it. That way, I can afford to pay the growers another 20 cents a pound.
Formaldehyde
Both Fair And Balanced
Double post...
Well, I take it that the word "fair" itself refers to kind of subjective angle on this thing.
There are countless of examples of people paying more than "market value" or minimum, which aren't understood as charity.
Across the street from Lidl (chain of cheap croceries) milk costs 20-25% more. People buy the more expensive one because they don't want to be thought as poor, or because Lidl has bad reputation as an employer.
In store exactly same kind of products can be placed next to each others, but people buy the more expensive one because of it's label. Or think about Nikes, they are (or were, or are reputedly, I don't know these things so well) produced with child labour and cost more because they are the Nikes. Is it charity to buy them?
And then there's people who want their employes to be happy for example. They might have selfish reasons for that. for example they don't want to hire new people all the time. Are they doing charity? Or if they just want to pay their employes more because they deserve it.
gangleri2001
Garbage day!!!
I've always had a question: who the hell controls that certificate?
innonimatu
the resident Cassandra
- Joined
- Dec 4, 2006
- Messages
- 15,338
"Fair Trade" as described in the OP is a delerict relic. If fails to address the present international trade problems, and arguably never addressed them.
Real fair trade can only be achieved as a policy implemented at a national level, and preferably on a world level.
I'll steal a short overview of real fair trade proposals which we may see implemented, forced by circumstances, fairly soon:
I'm not too hopeful about seeing the income from any such tariff offered to developing countries, though...
The source for this small text, if anyone is interested, can be found here. The whole document may interest some people.
Real fair trade can only be achieved as a policy implemented at a national level, and preferably on a world level.
I'll steal a short overview of real fair trade proposals which we may see implemented, forced by circumstances, fairly soon:
I'm not too hopeful about seeing the income from any such tariff offered to developing countries, though...
The source for this small text, if anyone is interested, can be found here. The whole document may interest some people.
The two terms are not a dichotomy.
Free trade is essentially a neutral mechanism, which is utterly silent on issues of social justice, development and equity. It's not that free trade is BAD, it's that it's utterly INADEQUATE to the problems of many places, and its existance or absence is really really secondary to problems with development and third world agriculture.
Fair trade is, essentially, an effort to guarantee a minimum level of return on production for farmers too small and poor to overcome the inevitable fluctuations of the market. These farmers are locked into particular modes of production, they don't have the ability to even participate in fancy theoretical perfect marketplaces free of distortion and so forth. A guaranteed level of return is a way of helping them cope with market fluctuations beyond what they could otherwise weather.
In the real world of third world agriculture, farmers can't negotiate as proper market participants because they are pure price takers. Prices get set in volatile commodity markets that're mostly influenced by bigger producers, whose variances set prices. The small farmers must merely follow those price trends. Massive power imbalances, massive information imbalances, and massive infrastructure problems (how do you negotiate price in a national or international marketplace when you don't have a friggin road?) all conspire to mean that Free Trade can and does exist without any sort of link to social justice, sustainability, or any of that good stuff.
In the current situation where they have no CHOICE but to sell whatever they produce, at whatever price they get, the solution isn't simply "switch crops to something more advantageous because we love Adam Smith" because 1. a similar situation for ALL crops and 2. switching requires access to capital and information they can't get.
The upshot is that formal markets, competitive markets, barely reach these people and when they do, it's mostly in counterproductive ways. By guaranteeing a minimum, reliable, level of income, you allow things like long-term planning, infrastructure development, education, which fair trade groups help develop. This development benefits everyone in an area, even the non fair-trade farmers, because when a fair trade farmer (using the stability and certainty of his or her guaranteed minimum income) builds a road with his new income, everyone can use it, which makes everybody more able to participate in their local market.
It's not that free trade is bad, it's simply that free trade and fair trade have fundamentally different focuses. Free trade is a theoretical model which works pretty well but can't do everything. Fair trade is not a theory but a bunch of very practical development ideas aimed at overcoming huge market distortions and market failures. Free trade requires a formal market, which requires a minimum level of agency on the part of its participants. Such a market can't reach the small and poor farmers without serious development first (and the overfocus on simply assuming "free trade fixes all" actively undermines this). And fair trade is a viable mechanism for facilitating this development of roads and infrastructure and stuff.
It's also telling to note that rich world farmers all receive significant assistance and subsidy - funny that only poor world farmers are asked to deal with market fluctuations without assistance.
Free trade is essentially a neutral mechanism, which is utterly silent on issues of social justice, development and equity. It's not that free trade is BAD, it's that it's utterly INADEQUATE to the problems of many places, and its existance or absence is really really secondary to problems with development and third world agriculture.
Fair trade is, essentially, an effort to guarantee a minimum level of return on production for farmers too small and poor to overcome the inevitable fluctuations of the market. These farmers are locked into particular modes of production, they don't have the ability to even participate in fancy theoretical perfect marketplaces free of distortion and so forth. A guaranteed level of return is a way of helping them cope with market fluctuations beyond what they could otherwise weather.
In the real world of third world agriculture, farmers can't negotiate as proper market participants because they are pure price takers. Prices get set in volatile commodity markets that're mostly influenced by bigger producers, whose variances set prices. The small farmers must merely follow those price trends. Massive power imbalances, massive information imbalances, and massive infrastructure problems (how do you negotiate price in a national or international marketplace when you don't have a friggin road?) all conspire to mean that Free Trade can and does exist without any sort of link to social justice, sustainability, or any of that good stuff.
In the current situation where they have no CHOICE but to sell whatever they produce, at whatever price they get, the solution isn't simply "switch crops to something more advantageous because we love Adam Smith" because 1. a similar situation for ALL crops and 2. switching requires access to capital and information they can't get.
The upshot is that formal markets, competitive markets, barely reach these people and when they do, it's mostly in counterproductive ways. By guaranteeing a minimum, reliable, level of income, you allow things like long-term planning, infrastructure development, education, which fair trade groups help develop. This development benefits everyone in an area, even the non fair-trade farmers, because when a fair trade farmer (using the stability and certainty of his or her guaranteed minimum income) builds a road with his new income, everyone can use it, which makes everybody more able to participate in their local market.
It's not that free trade is bad, it's simply that free trade and fair trade have fundamentally different focuses. Free trade is a theoretical model which works pretty well but can't do everything. Fair trade is not a theory but a bunch of very practical development ideas aimed at overcoming huge market distortions and market failures. Free trade requires a formal market, which requires a minimum level of agency on the part of its participants. Such a market can't reach the small and poor farmers without serious development first (and the overfocus on simply assuming "free trade fixes all" actively undermines this). And fair trade is a viable mechanism for facilitating this development of roads and infrastructure and stuff.
It's also telling to note that rich world farmers all receive significant assistance and subsidy - funny that only poor world farmers are asked to deal with market fluctuations without assistance.
Integral
Can't you hear it?
Granted, first-world agricultural subsidies aren't optimal either, and indeed contribute to the problem facing third-world farmers. Some of us are asking first-world farmers to embrace the market too.
The only reason that one should buy fairtrade is if they were specifically interested in third-world farming conditions. If one were concerned about aid and development generally, fairtrade is a horribly inefficient way to go about helping the poor.
As an aside, many here are arguing that fairtrade offers a 'fair' or 'just' price for agricultural goods. How exactly does Fairtrade (the organization) determine what qualifies as a 'just' price?
Even then, I think it's massively simplistic to assume that getting rid of direct and indirect subsidies would fix everything. It wouldn't hurt but it would do nothing about the deep structural issues in many countries. Those subsidies helped entrench the advantages of first world farmers and removing them now wouldn't necessarily change those advantages much. They'll still generally have much better access to credit, information, and decent infrastructure. They'll still tend to set the price rather than take it.
Integral
Can't you hear it?
I never suggested that eliminating subsidies would "fix everything". There is no issue in development that can be resolved with a single, sweeping "fix"; that, indeed, might be the great lesson of the failures of the past half-century of development and aid.
There are systemic and, by now, embedded asymmetries between first- and third-world farmers. No one is denying that. The issue here is if fairtrade is the right solution or even a step in the right direction - and the answer to that depends highly on what the perceived goals of the program are. As a tool for development generally, fairtrade is inefficient; as a tool for helping third-world farmers specifically, it might have more merit.
And of course, going back to the previous point, fairtrade itself is hardly an ideal solution and is in no way a complete solution to the imbalances between first- and third-world farmers.
But really, how could a secure income stream allowing longer term planning be a bad thing for development?
I think you're drawing an excessively large distinction between "development" and "helping farmers" in these countries. The vast majority of people in most poor countries work on the land. Given the huge problem of rapid rural-urban migration in many places, anything that increases the security and developmental capacity of rural employment has to be considered a good thing.
Of course you're right it's not a huge solution, but it's never claimed to be anything other than a pragmatic attempt to reduce the worst of the ravages of the current economic system.
I think you're drawing an excessively large distinction between "development" and "helping farmers" in these countries. The vast majority of people in most poor countries work on the land. Given the huge problem of rapid rural-urban migration in many places, anything that increases the security and developmental capacity of rural employment has to be considered a good thing.
Of course you're right it's not a huge solution, but it's never claimed to be anything other than a pragmatic attempt to reduce the worst of the ravages of the current economic system.
I do not know enough about ecconomics to be sure, but I really have a few issues with fair trade. I do wonder if my objections are just, as Atticus said an "attempt to rationalize nonwillingness to pay fair price for goods", but I do not think so. My comments are restricted to coffee, as that is the only thing I spend any money on that I could purchase "Fair Tade".
It seems to me that primary effect of fair trade coffee is to encourage farmers to grow an unecconomicly viable drug rather than diversifiing into other products, that may or may not be more ecconomicly viable, but at least could be eaten if the global markets cannot provide a resnoble profit. In most areas this is regarded as a bad thiing (it is frequently used as an argument against illegal drugs) and I do not get how it is sudenly a good thing when it comes to coffee.
As I understand it, very little of the extra money that one pays for a bag of fair trade coffee is past on to the producer. I would rather buy normall coffeee and give a little more in charity.
I have not found a fair trade coffee that comes close to competting on taste with Lavazza black or gold.
It seems to me that primary effect of fair trade coffee is to encourage farmers to grow an unecconomicly viable drug rather than diversifiing into other products, that may or may not be more ecconomicly viable, but at least could be eaten if the global markets cannot provide a resnoble profit. In most areas this is regarded as a bad thiing (it is frequently used as an argument against illegal drugs) and I do not get how it is sudenly a good thing when it comes to coffee.
As I understand it, very little of the extra money that one pays for a bag of fair trade coffee is past on to the producer. I would rather buy normall coffeee and give a little more in charity.
I have not found a fair trade coffee that comes close to competting on taste with Lavazza black or gold.
