How fair is Fairtrade anyway?

There are two different fair trade labels International Fairtrade and the World Fair Trade Organization (WFTO). This post is about International Fairtrade.

Fair trade as a label is meant to be supporter of small producers in developing countries. Or that is how it is promoted to westerners. We buy higher priced products believing that reasonable portion of the price goes to little producer. In theory it’s sounds pretty good. In practice things are not how it is made to look.

Getting this specific Fairtrade label producer has to pay two different payments. Contract Production Projects applying for Fair Trade certification are charged € 538 for the application service. For the application evaluation regarding an exception from the Fairtrade Standards and respective Certification Requirements FLOCERT charges a fee of € 205. After this the producers have to pay a yearly payment that varies depending on the size of the producer, how many people are working and how many different kinds of products they are selling. Here is theoretical example for a small producer:

Small coffee producer:

  • 1 product
  • 25 workers

Basic payment: 1466€

Initial Processing Installation Fee: 420€

Total for first year: 2629€

Additional cost for other products: 184€ per item

If you think about it, this is a big amount of money. It is very unlikely that a small producer can afford it. For example In Tanzania the average monthly salary is under 50€. It’s fair to assume that the actual “small producers” that are producing products under Fairtrade label are in fact rather big producers. So there goes the “I’m supporting small producers in developing countries” idea.

Why this is happening is a question that should be asked. First of all this is very good example of how marketing works when it is done correctly. One can sell anything and everything if they know the answers to questions how, why, when, whom, where and who. This is definitely not the only case.  Everything from food to clothing in everyday life is sold to consumers in ways that, in my opinion, are not transparent and there is something sketchy behind of it.

You would think that in the modern world where information spreads fast, these things would not happen. But let’s be honest here, how many can actually say “ yes I have checked everything behind everything that I have ever bought”. I can bet none. We can access the information, but we are making decisions not to use it or find it. And there is the fact that people do want to believe good about other people. We don’t want to question everything. I think this is a good thing otherwise the future would not be very bright.  As long as there is money involved, as long as people are willing to “help” and as long as we have any kind of hope for the better world of tomorrow there will always be someone who is going to abuse it.

But let’s go back to the Fairtrade.   So if fair trade is not so fair after all when it comes to small producers, what we can buy to support the actual small producers in developing countries? There are other ways you can support the local communities and their products. You have to just know where to buy and what to buy. Knowledge is the key. I’ll tell you later what kind of options you have.

By: Tia Maria