Magazine article New Internationalist

Fair Trade for Sale: David Ransom Thinks Not

Magazine article New Internationalist

Fair Trade for Sale: David Ransom Thinks Not

Article excerpt

The fair trade movement has grown a good deal faster and further than some of us anticipated, and for at least two reasons. The first is the global justice movement, which has given the international tradiner system a critical presence in the public mind that was once hard to envisage. The second is the improved range, quality and availability of labelled 'fairtrade' products, which appear to offer a very scarce commodity indeed: something practical that almost anyone can do to counteract the current system's injustices.

Together they have managed to create a small but growing space 'in and against the market', where unorthodox experiments can operate despite an increasingly unjust and fundamentalist mainstream. They have given each other strength. Separately, however, they pull in opposite directions, the one towards changing the system, the other towards a niche within it. And there are some worrying signs, in Britain and elsewhere, that they might be pulling apart altogether.

'We aspire to grow and therefore we want more funds,' said Penny Newman, the Managing Director of Britain's biggest fair trade coffee company, Cafédirect, announcing its flotation on financial markets last year. 'We are a commercial venture, not a charity,' added Sylvie Barr, Cafédirect's Head of Strategic Development, as if to reassure potential investors, who were being offered control of the company.1

Then came an announcement from the Fairtrade Foundation, which authenticates Britain's 'fairtrade' label. It was being awarded to Tesco, Britain's biggest retailer (and the third-largest in the world), for a new line of flowers from Kenya. 'Tesco is renowned for understanding its customers,' according to Ian Bretman, Commercial Director of the Fairtrade Foundation, in a Tesco press release. This is good news for producers, who will benefit from the additional sales, and good news for consumers, who will see a much greater choice of quality fairtrade products in stores.'2

Good news all round then. Well, maybe. Floating on financial markets is a hazardous business not renowned for its fairness, and Tesco is renowned for a good deal more than 'understanding its customers' - screwing down producers and running everyone else out of town, for instance. Perhaps, then, the mainstream - duly prompted by the fair trade movement - has changed course? A degree of hubris is required to believe this, and the evidence is not encouraging. In 2003 some supermarkets in Britain were accused of overcharging for fair trade products. They were, it was claimed, retaining much of the premium on the price for themselves. Tesco was among the stores reportedly marking up fair trade bananas by as much as one US dollar per kilogram - more than double the premium going to producers.3

These events in Britain were, as ever, foreshadowed in the US. In 2000 TransFair USA provided fair trade certification for Starbucks, saying: 'With every cup of Starbucks Fair Trade coffee, consumers are supporting and empowering farmers and their families.'4 So what, precisely, would they be doing with every other cup of non-fair-trade coffee bought from this very profitable icon of corporate globalization?

This is a very slippery slope indeed. If 'fairtrade' certification can be given to the likes of Tesco and Starbucks, why not also to the likes of, say, Nestlé? This Swiss-based transnational corporation is, among other things - including the persistent marketing of babymilk to mothers who neither need it nor have the means to use it safely - the world's largest single coffee-manufacturing company. So surely, using the same logic as with Tesco or Starbucks, a 'fairtrade' Nestlé coffee brand would be even better news all round.

Well, probably not. You have to know something about how 'free' markets work in order to figure out why. The price of commodities like coffee that corporations buy from producers in the South has been in long-term decline. The reasons for this relate more closely than is generally known to the debt mechanism, which forces bankrupt Southern countries to export whatever basic commodities they can, all at the same time. …

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