Fair Trade, the concept and the organization; a producer’s perspective

9 years ago Ethics0

In a world where the shame of extreme poverty, unacceptably high infant mortality and death due to starvation compete for the headlines with news of inconceivably sophisticated advancements in science and technology, the need for a solution to the inequality that fuels poverty in the ‘South’ is critical. With the failure of aid as an effective tool, trade is the most tangible and realistic. Awareness of that potential is higher than ever before through the work of Fairtrade Foundation. However that tremendous advancement in generally acknowledging the problem and its solution in fair trade – as a concept – is in danger of imploding if Fairtrade – the organization, seeks to exceed its capability and role, by also posturing as the main solution to the problem.

Trying to solve the problem of unfair trade between North and South through the mechanism of Fairtrade is akin to applying a sticking plaster to heal a malignant tumour. The role of Fairtrade in highlighting the fundamentral unequal trade relationship between Less Developed Countries (the South) and those that are Developed (North)has been invaluable. In assuming the role of self appointed guarantor of producers’ rights and welfare however, Fairtrade is exceeding its usefulness. In doing so, it is also undermining its work in bringing the issue onto the agenda, and in fact perpetuating and protecting the unequal system that it has criticized.

Fair trade – as a concept – is the most powerful and feasible agent of change in the present North South dichotomy. However Fairtrade as a brand and as an organization is not genuinely fair trade. Certainly, it adds a veneer of acceptability to the unequal system of trade, and it is incrementally better, but the real solution lies in much more fundamental change.

Central to the concept of fairness in trade is the notion of a producer benefiting from the fruit of his or her labour. The colonial form of production and trade restricted that benefit and that role of the producer to raw material supplier. The unfairness of this was that it completely denied the producer of the most rewarding aspects of his product, which is value addition – the benefits of branding and marketing.

Fairtrade – the organization – is limited in its relevance and irrelevant to the final solution for the inequality in trade in that it reinforces that unequal structure of global trade. It is wonderful for the tea, banana, coffee and other producers to receive a fairer share of the raw material price of their crop, but that perpetuates a system which, since colonial times, has denied producers of the true value of their efforts. It is a question of degree – for the better price for raw material is naturally welcome, and a step in the right direction. For that we laud Fairtrade.

The danger lies though in Fairtrade’s claim – becoming increasingly louder as their revenues grow – to be the only independent guarantee of a better deal for third world producers. It offers welcome relief, but cannot by any stretch of the imagination, be considered to be the final solution it purports to be. That solution lies in much more fundamental change, where the producer brings his or her goods to market, brands and adds value. That would be a genuine guarantee of fair trade, for it would eliminate the middlemen that profit unfairly from the work of the producer, and it would eliminate the necessity for Fairtrade or any other organization to add any form of price premium to guarantee a product’s ‘fairness’.

Dilhan

Dilhan is the younger son of Dilmah Tea Founder Merrill J. Fernando. Together with brother Malik, Dilhan has taken on the passionate commitment of his father, for tea, ethics in business and the concept of business as a matter of human service.