Fair Trade - is it really 'fair'?

[homealone]

inspired by Chris T's comment in this thread

http://www.cableforum.co.uk/board/showpost.php?p=727307&postcount=445

got me thinking.

Now NestlÃÃâ€*’© are notorious for aggressive marketing of dried baby formula in areas where clean water supplies are not available, so the idea of them promoting a 'Fair Trade' coffee for purely ethical reasons does not sit well with many people.

In fact, in some peoples eyes I can imagine this undermining the whole ethos of the Fair Trade movement, in that a huge multinational, like NestlÃÃâ€*’©, is perceived as 'jumping on the bandwagon', for cynical, rather than philanthropic, reasons.

So, is 'Fair Trade' a viable method of ensuring a decent income for 3rd world farmers, or just a marketing exercise, where increased prices paid by the consumer are swallowed up in administration, branding, advertising and profit for the retailer - leaving only a small premium for the producer?

[Maggy]

inspired by Chris T's comment in this thread

http://www.cableforum.co.uk/board/showpost.php?p=727307&postcount=445

got me thinking.

Now NestlÃÃâ€*’© are notorious for aggressive marketing of dried baby formula in areas where clean water supplies are not available, so the idea of them promoting a 'Fair Trade' coffee for purely ethical reasons does not sit well with many people.

In fact, in some peoples eyes I can imagine this undermining the whole ethos of the Fair Trade movement, in that a huge multinational, like NestlÃÃâ€*’©, is perceived as 'jumping on the bandwagon', for cynical, rather than philanthropic, reasons.

So, is 'Fair Trade' a viable method of ensuring a decent income for 3rd world farmers, or just a marketing exercise, where increased prices paid by the consumer are swallowed up in administration, branding, advertising and profit for the retailer - leaving only a small premium for the producer?

I think you need to look at the company that is subscribing to the ethos of Fair Trade.I will continue to support those that began the idea such as the Co-Op and the Greens brand of Organic chocolate and those retailers that have stocked these products from the beginning but I do look very hard at new products from the likes of Nestle.

[Chris]

The way I understand it, 'Fair Trade' does increase the amount paid to the producer, but by a fixed amount. It is not a profit-sharing agreement so whether you eventually buy the fair trade product for 80p or £1, the amount the producer will have received is unchanged.

I don't have a problem with this per se, so long as people understand that is how it works. We still have to have a functioning market at our end of the chain, because that's what our entire economy is based on.

My comment about Nestle was prompted by the fact that they have Fair Trade agreements with (IIRC) about 300 producers, while their other coffee brands rely on the output of something like 3,000 producers. I'm quoting those figures off the top of my head; they may be wildly inaccurate but the relative proportion is about right. I object to the Great Satan of consumer retailing trying to rehabilitate its image by apparently 'embracing' fair trade. If they are so keen on it, why aren't they giving all their producers the same deal?

At home, Mrs T and I are only in very early days when it comes to thinking about fair trade and what products we can buy differently, but we are at least thinking about it. We had a very nice fairtrade Chilean white wine with Sunday lunch...

[Nugget]

Personally, I think that, when following its true concept, Fair Trade is one of the best ways of making sure that the growers / farmers / whatever aare getting a good price for their produce. Obviously, there will be administrative costs involved, but these appear to be lower than what you would expect.

The problem, as both Chris and Gaz have said, is when a company like Nestle, that has a reputation like it has, launches a Fair Trade product, people are (with some justification) going to think that Fair Trade doesn't really mean much - if a company as big as this can do it (and we all know what the really big companies are like), how can they prove that fair prices are being paid at source?

IMO, Fair Trade is fantastic is regulated properly which, in the case of companies like Nestle, I would have certain doubts.

[homealone]

I think you need to look at the company that is subscribing to the ethos of Fair Trade.I will continue to support those that began the idea such as the Co-Op and the Greens brand of Organic chocolate and those retailers that have stocked these products from the beginning but I do look very hard at new products from the likes of Nestle.

good point, Incog, I agree with you about the Co-op, they actually do seem to genuinely want to trade responsibly, rather than cash in on a fad. The company I work for sells products to all the major retailers and, from experience, I cannot see the likes of Tesco or Asda (Walmart), doing anything that isn't intended to maximise their profits.

[Nugget]

good point, Incog, I agree with you about the Co-op, they actually do seem to genuinely want to trade responsibly, rather than cash in on a fad. The company I work for sells products to all the major retailers and, from experience, I cannot see the likes of Tesco or Asda (Walmart), doing anything that isn't intended to maximise their profits.

The problem with companies like Asda and Tesco is the sheer size - as you know, a lot of their business is based on the idea of cutting their costs. If a supplier doesn't agree to it, they'll just stop using them and go to someone who will :shrug:

Unfortunately, the only way to stop that is through consumers starting to go back to the local 'High Street' stores - the ones that have all shut because of the huge supermarkets everywhere...

[homealone]

The way I understand it, 'Fair Trade' does increase the amount paid to the producer, but by a fixed amount. It is not a profit-sharing agreement so whether you eventually buy the fair trade product for 80p or £1, the amount the producer will have received is unchanged.

I don't have a problem with this per se, so long as people understand that is how it works. We still have to have a functioning market at our end of the chain, because that's what our entire economy is based on.

My comment about Nestle was prompted by the fact that they have Fair Trade agreements with (IIRC) about 300 producers, while their other coffee brands rely on the output of something like 3,000 producers. I'm quoting those figures off the top of my head; they may be wildly inaccurate but the relative proportion is about right. I object to the Great Satan of consumer retailing trying to rehabilitate its image by apparently 'embracing' fair trade. If they are so keen on it, why aren't they giving all their producers the same deal?

At home, Mrs T and I are only in very early days when it comes to thinking about fair trade and what products we can buy differently, but we are at least thinking about it. We had a very nice fairtrade Chilean white wine with Sunday lunch...

I have to admit to being suspicious that the 'fair' price paid the producer is a high enough proportion of the premium paid by the consumer, and I am worried that if people become disillusioned with the scheme, due to cynical intervention, by the likes of NestlÃÃâ€*’©, it will undermine the genuine participants.

[Stuart]

IMO, Fair Trade is fantastic is regulated properly which, in the case of companies like Nestle, I would have certain doubts.

I am sure I read somewhere that it was actually the actions of Nestle that persuaded the founders of Fairtrade to set it up.

However, for more info on Fairtrade, have a look at http://www.fairtrade.org.uk

[homealone]

The problem with companies like Asda and Tesco is the sheer size - as you know, a lot of their business is based on the idea of cutting their costs. If a supplier doesn't agree to it, they'll just stop using them and go to someone who will :shrug:

Unfortunately, the only way to stop that is through consumers starting to go back to the local 'High Street' stores - the ones that have all shut because of the huge supermarkets everywhere...

exactly, the people who potentially have the best opportunity to actually make a difference are the least likely to do it for altruistic reasons. I wouldn't be surprised if the 'need' for fair trade agreements wasn't caused by these huge companies driving prices down, in the first place.

[Nugget]

I am sure I read somewhere that it was actually the actions of Nestle that persuaded the founders of Fairtrade to set it up.

However, for more info on Fairtrade, have a look at http://www.fairtrade.org.uk

I know it was a company, but I dunno if it was Nestle or not :)

Thinking on, the FairTrade organisation can be rather picky themselves - the company I work for is just in the process of launching a Fair Trade coffee. When the artwork for the label was going through, they told us that the logo was too big, which generated more costs in reducing the size. I could understand if it wasn't big enough, but too big... :shrug:

[homealone]

I am sure I read somewhere that it was actually the actions of Nestle that persuaded the founders of Fairtrade to set it up.

However, for more info on Fairtrade, have a look at http://www.fairtrade.org.uk

NestlÃÃâ€*’© are such huge buyers of coffee & cocoa, it wouldn't surprise me - thanks for the link :tu:

[King Of Fools]

The original point of the "FairTrade" mark was that for a £2 jar of coffee the growers would see about £1 of it rather than the couple of pence they would get selling their coffee to Nescafe!

[etccarmageddon]

If nestle are to join the fair trade movement then they should be compelled to convert all their products to fair trade.

[homealone]

this report

http://www.maketradefair.com/en/index.php?file=wto_latest.htm

and other links, tends to suggest that 'what is in it for me' still seems to be the main motive in international trade.

[andygrif]

The problem with companies like Asda and Tesco is the sheer size - as you know, a lot of their business is based on the idea of cutting their costs. If a supplier doesn't agree to it, they'll just stop using them and go to someone who will :shrug:

Unfortunately, the only way to stop that is through consumers starting to go back to the local 'High Street' stores - the ones that have all shut because of the huge supermarkets everywhere...

I think you've hit the nail on the head on both things there, which is also the same as the organic movement IMHO.

I got talking to a lady who ran a completely Fairtrade market stall at various farmers' markets and although she might be a little biased I got the impression she was telling me the truth. She was telling me that the supermarkets were now driving the 'fair' prices downwards but continuing to sell the products at an inflated price in-store as consumers were willing to pay a little more for something with a conscience.

The same goes for organic - there are many organic farms supplying force grown veggies, poorly kept livestock and animals that have no more space to live in that their non-organic cousins. But we'll pay more for it thinking that it's better for us and better for the animals - and the supermarkets are rubbing their hands with glee.

Whether it's organic or Fairtrade - it's a marketing exercise for the large supermarkets, a way of making more money for, what is in effect, the same product and we're the poor saps who think we're doing the right thing by buying it.

As Nugget says, we need to go back to the High Street, back to our local farmers and growers and to genuine Fairtraders to be sure that we eat the best and don't exploit people in poorer countries as a result.