Marketing Honesty: Is Fair Trade Really a Fair Deal?
Editor’s Note: Sometimes I like to post things to stimulate controversy, and thus I’m running this guest post by Alexis Bonari, critiquing one of the sacred cows of the sustainability movement: fair trade certification.
From my own point of view as a consumer, I look to Fair Trade certification for many products, especially chocolate. I am all-too-aware of the use of child slaves to harvest cacao, particularly in the Ivory Coast, and as a lover of chocolate, I don’t want to be a party to that. Fair Trade labeling is my assurance that the cacao was grown honestly.
I also disagree with Bonari’s two points:
First, there’s nothing, to my mind, inherently evil about mechanized farming, as long as it’s done sustainably. Many Fair Trade products are also organic, and that’s a big step in the right direction. Systemically, of course, we should be looking at how we power our tractors and all the rest of it. And we can all look for ways to increase our “locavore” quotient by consuming products (including food) created locally. But I do believe there is a place for imports in the mix, and in fact, in my book, Guerrilla Marketing Goes Green, the section on “Local as Green” is followed immediately by one called “Global as Green.”
And second, Far Trade (while far from perfect) certainly does provide a wedge against poverty. Farmers in Fair Trade co-ops are demonstrably better off than most who sell through conventional channels and who have no choice but to accept a pathetically low bid. Remember, too, that economic leverage varies a lot from country to country, and differences can be orders of magnitude. There are many parts of the world where an income of $25 or $50 a day puts someone in the upper half of the population, but it may only cost a few cents to cook a meal.
I’ll turn the floor over to Alexis now—but I’d love to know your thoughts. Please add your comment below.
—Shel Horowitz
Marketing Honesty: Is Fair Trade Really a Fair Deal?
By Alexis Bonari
The Fair Trade label has become a marketing boon for many companies. Soon, even Nestlé’s Kit Kat bar will be made from Fair Trade sources.
Essentially, the term Fair Trade refers to the following business model: companies pay craftsmen and farmers in developing countries an increased wage for goods that are traditionally produced in that region. These goods are produced with an eye to minimal environmental impact. Examples of Fair Trade goods are: bananas, honey, cotton, wine, handcrafts, coffee, sugar, and tea. As of 2008, the annual amount of revenue generated by Fair Trade goods amounted to approximately US$4.08 billion worldwide.
While the popularity of Fair Trade goods is almost certainly a byproduct of good intentions on the part of consumers, is there a downside to the Fair Trade industry?
The problem is twofold:
1. Unsustainable Markets
While incentivizing the production of local crops and handcrafts may temporarily short-circuit the cycle of poverty in certain communities, it does nothing to address the problem of supply and demand. First world countries lead the global economic market by producing technology and mass-produced products. India, and other developing countries experiencing economic growth, are educating their people and encouraging them to adopt mechanized means of production and farming.
Fair Trade workers are being incentivized to continue producing the very same products that are keeping them in poverty. A comprehensive solution would encourage education and new business ventures.
2. Perpetuation of a Toxic Cycle
Simply put, Fair Trade policies perpetuate a system that denies the citizens of developing countries control over their own businesses. Under the banner of Fair Trade, foreign companies are offering them pennies on the dollar that a citizen of the US or a member of the EU would make for the same service.
Fair Trade is a case of inaccurate marketing. The consumer is convinced that they’re working toward eradicating poverty in the Third World. In reality, Fair Trade could potentially hurt the very people it intends to help.
Alexis Bonari is a freelance writer and blog junkie. She is a passionate blogger on the topic of education and free college scholarships. In her spare time, she enjoys square-foot gardening, swimming, and avoiding her laptop.
