Buying a better world?

26 Jan

Due to a random series of events involving storytelling and poetry last September (long story!) I was invited to do a talk at a “Gathering of Global Minds” event organised by the Saskatchewan Council for International Cooperation. This happened on 23rd January at a very nice cafe bar here in Regina. I was honestly not expecting there to be as many people in the audience as there were, so it was quite scary – especially given the subject matter. “Buying a better world?” Or, more simply, Fairtrade! Again! And they wanted me to critique it! Again! And I was told in advance: “The people coming to the event will range from moderate to radical supporters [of Fairtrade]”. Woopedoo! I was more than a little worried about getting harrassed by the Traidcraft mafia again like last time…..

Anyway, I was sharing the panel with Alicia from a shop called 10,000 Villages that sells artisan, Fairtrade crafts, and Nathan, who’d been working with Fairtrade cocoa farmers in Ghana. It proved to be a really interesting night; our separate talks actually had a lot in common and the audience engaged really well, asked a lot of questions and didn’t take any offence at Nathan and I pointing out some of the problems with the fairtrade system!

My critique was, as normal, mainly based on economics. Alicia’s emotive talk about how Fairtrade helps impoverish communities and empowers women and preserves traditional crafts etc was spot on – the system does do a lot of good and I am not denying that for a minute. Neither can I fault the original intention of the Fairtrade movement. My issues are just with the execution of that idea.

I’ve already posted on this blog about how the Fairtrade minimum price for coffee ($1.36 per pound) was just half the price of coffee on the New York Commodity Exchange in the last few years (which reached a 35 year high of over $3 per pound in 2010) – and whatever the bigger coffee companies claim, it is very naive to think any large importing company would volunteer to pay more than they actually had to for the commodity. Case to point, in 2010 when the commodity exchange price for coffee was at its highest and the fairtrade minimum was less that half that price, Starbucks and McDonalds both suddenly switched their entire coffee range to Fairtrade in the UK. Now call me cynical, but I’m fairly confident that this wasn’t because they’d magically become ethically aware over night. Nevertheless, (also as pointed out on this blog) the Fairtrade Foundation did react eventually, and by August 2011, had altered the rule and now said that buyers should pay the fairtrade price or the normal market price, whichever was higher. . This meant that farmers would get the same higher prices and benefit from the global market, but those in Fairtrade-certified cooperatives would also get the social premium and the benefits of all the Fairtrade community development projects as well. All very well and good, but it was a very long time coming – and I’d argue, too little, too late.

My main concern though, is still with Quality. Regardless of the new rules regarding the Fairtrade price, the demands of capitalism mean that the highest prices will still be paid for the highest quality coffee, regardless of its fairtrade status or lack of. I had workers at the cooperatives in Nicaragua telling me as a statement of fact that coffee which achieves 85 or more points on the cupping scale is sold off as ‘specialty’ coffee for the highest prices, then the crops that fall into the 65-85 points range are sold to Fairtrade buyers for a lower price. This means not only that the fairtrade price is still lower, it also means that stuff sold with the Fairtrade logo could actually be much lower quality than the stuff sold outside of the Fairtrade system. But when we buy it, we can’t tell! The Fairtrade logo tells the consumer nothing about what the coffee tastes like, but too often those who try to shop ethically automatically make the link between “ethically good” and “tastes good” – which may not be the case at all.

I also tried to explain the cupping process and issues with knowledge inequality. In very simplistic terms, cupping coffee is a very skilled job and one that takes years to perfect. The vast majority of these skilled cuppers (who have a huge influence over the price the farmer receives for his crop) are employed by the large roasting and importing companies. They visit the cooperatives, sample the coffee and grade it, (the points system described previously) and then “negotiate” a price for the coffee based on their assessment of its quality. The problem is that it is rare to find the equivalent cupper employed by the cooperative. A cupper from a multinational importing company can go to the cooperative, pronouce the coffee to be only of average quality, and then refuse to pay a high price for it, yet the farmers or the cooperative workers have very little means to argue against that decision. It proves to be a very unequal negotiation, just because the farmers in the producing countries often cannot share in the same understanding of coffee quality and knowledge of cupping that the rich, educated and trained cuppers possess. This situation isn’t likely to change without some serious investment in training at the cooperatives – maybe this is what those coveted Fairtrade social premiums could be used for?

At the end of this talk (all 7 minutes of it) I had to sum up and give my “recommendations”. I know it is a very lame admission but despite all my criticisms, I don’t have many plausible recommendations as alternatives to Fairtrade, and I do still see the need for the concept’s existence. I advocate direct trade – small coffee companies going directly to the point of origin and buying directly from the farmers, and therefore cutting out the middle men. However, this is just not practical on a large scale. So few business can afford those trips on a regular basis and those that can are the multinationals I’d like to get rid of. From an economic viewpoint, I think the Fairtrade minimum price should track just above the global market price, but doing this for every single commodity they certify, in every country they operate I imagine would just be impossible. Of course, it would be far nicer for everyone if Fairtrade didn’t have to exist at all – if ALL trade was fair all of the time. But then, we live in a capitalist world and therefore that isn’t going to happen.

I’ve said it before repeatedly on this blog… as a consumer, be aware of not just what you are buying, but what you are buying in to. And then buy what you like the taste of, and (in as far as possible) what you are comfortable with investing in. Easier said than done, I know!

The audience, all ready and enthused to fire questions at me. (Photo stolen from Jenn Bergen's twitter - thank you!)

The audience, all ready and enthused to fire questions at me.
(Photo stolen from Jenn Bergen’s twitter – thank you!)

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Posted by on January 26, 2013 in Uncategorized


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