IS FAIR TRADE GOOD OR BAD FOR DEVELOPING NATIONS?
83Fair Trade and its impact on impoverished nations.
By Edwin C. Mercurio
“When I give food to the poor, they call me a saint.When I ask why the poor have no food, they call me a communist.” Dom Helder Camara
Fair trade advocates told a European Union Conference that fair trade works. “It works for the poor people; it works for consumers. It works as a business model; it works as sustainable development; it works to protect the environment; it works as an idea." reports the Fair Trade Advocacy Newsletter.
But there is growing concern about the theory and practice of the Fair Trade movement. Despite its anti-capitalist rhetoric, it is seen as a revised form of free trade controlled by the G8 and economically dominant countries,which are continually held responsible for global trade injustices.
Fair trade is often presented as a fair way to help banana growers. However, the dominance of corporate power - Del Monte, Chiquita and Dole - leaves poorer farmers and nations with an uncertain future and destroyed ecosystems. Their dominance is built on the exploitation of lands and workers from developing countries.
There are indications that fair trade is used as a cover by transnational corporations to expand their corporate interest. Even more disturbing, according to Matthias Schmeizer of Institute Fusoziale Dreigliederung, is how Nestle (known as 2005’s “least responsible company” worldwide and one of the four big coffee roasters responsible for the coffee crisis which impoverished millions of producers) prides itself of launching a “Fair Trade” brand in Britain.
Consumers are willing to pay more for goods produced in a fair and less exploitative manner. However, questions remain about fair trade and the observance of fair labour practices.
In 2006, British consumers spent more than £290 million (approximately $450 million Canadian) on Fair Trade goods as sales (bearing the distinctive green, black and blue logo) continue to soar.
A report published by Adam Smith Institute claims that “Fair Trade”methods actually sustain uncompetitive farming practices rather than encourage the development of modern techniques or industrialization. In addition, payment structures put in place by the Fair-trade Foundation “unintentionally encourage farms in developing countries to take on labourers only during harvest time.” Seasonal sugar plantation workers in Asia are the most exploited. They toil under harsh labour conditions with low wages, no medical benefits and housed in crowded and filthy living quarters.
As consumer demands grow, ecological balance and food crops for the world’s poor in underdeveloped countries are depleted and replaced by the Fair Trade goods demanded by Western and European consumers. The environmental impact of planting a single crop such as coffee, corn, papaya, cacao, banana and sugarcane on wide swaths of land is economically and environmentally disastrous as well as unsustainable. Any collapse of this “mono-crop” farming method due to overproduction, weather disruptions and pest infestations will bring untold misery to producers and farmers.
One of the worst cultural victims of fair trade are the indigenous peoples. Many cultural heritage and heirlooms of various indigenous peoples around the world are in danger of extinction. Traditional artifacts, musical instruments and ornaments made by tribal peoples from the rainforests for spiritual and cultural ceremonies and rituals are mass produced and converted into commercial items for profit by “Fair Trade” shops in Europe and North America.
Fair Trade aims to help some farmers and producers. In some cases, however, it prevents third world peoples from liberating themselves from the bondage of poverty, dependence, underdevelopment and transnational companies’ exploitation of human and natural resources.
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Thanks Jona,
Welcome to hubpages.
Ed-MNO
Great insight - very educational and exceptionally well written
I like your article because it is straight forward and direct to the fact.
Your article is so informative....
Thanks Hazel,
It is great to know that you like this feature article.
MNO
Thanks to all of you who posted your positive comments.
Welcome to hubpages.
MNO
Please explain how indigenous people making and selling traditional items for fair trade companies prevent them from escaping poverty. You say this happens in 'some cases' - care to explain in what kind of cases? I found your article to be ill-referenced and without a conclusion, so I'm interested in finding out more about your findings.
I worked in a not-for-profit fair trade store called Trade Aid in New Zealand for 2 years and found that fair trade does indeed bring out the most for farmers, artisans and people who came from horrible backgrounds, like child prostituion. Would it be better if all indigenous people worked in factories or offices wearing suits? Would it not be better if groups could raise awareness about their culture to the world through their crafts and gain revenue so that they can send their children to schools, so that when they are older they have the information and skills to sustain their own culture and fight back against multi-nationals and corrupt governments?
Dear Nikki,
That’s a fair comment!
I am glad you took the time to write your interesting comment from New Zealand.
Before I begin, allow me to say that I had worked and lived with six indigenous communities in the Philippines as a lay missionary for over five years. I agree and admire your intentions in helping the least fortunate and most vulnerable sectors of our modern society including the indigenous peoples around the world.
It is unfortunate that honest people with good intentions like yourself felt slighted by my Fair Trade article. As I mentioned in the article, native heirlooms and sacred objects used by indigenous peoples for religious rituals and ceremonies are in great danger of becoming extinct due to their great commercial appeal and mass production. I mentioned this as a dire warning to people from the lowlands and the outside world to respect and help preserve the values native peoples attached to these symbols. Today, only a few of these symbolic and religious items remain.
I am not against indigenous peoples marketing their handicrafts, ornaments and bracelets because I know the meager income can help alleviate poverty and help in native peoples’ survival, their children’s education and other important needs. However, I harbor no illusions that they will escape poverty using this method alone.
While integrating and immersing myself with the indigenous peoples, I have learned a great deal and realized many of my lowland ideas and values have to be re-evaluated and analyzed for me to understand my own people.
Sometimes, good organizations have to distance themselves from big corporations and multinationals to see the distinction between bad business and fair trade practices. In some cases, we all have to find the missing link between those sweet and delicious chocolates and the bitterness and despair felt by children in the Third World nations who are forced by poverty and slave-like conditions in cocoa farms.
With my best regards.
yes I do agree Fair Trade alone will not and never alleviate global poverty. And yes there are businesses who practice or say they practice FT but still cause damage to societies and the environment, either out of ignorance or simple greed. I also agree that not everything should be used for commercial wealth - for example we sold Tibetan prayer flags and singing bowls but sometimes felt unsure if we were not just selling spiritual materials to people who did not understand the importance of these objects (like the lady who told me she was going to use the singing bowl as a jewelry container). Sure, it's great if the money is going towards better living and a future for these people but at what cost? Indigenous cultures and ancient traditions being sold as exotic gimmicks?
Thanks for your reply, I understand better what you were trying to say.
You are most welcome Nikki.
I honestly believe that most participants of Fair Trade are honest and well-meaning people. I often visit FT stores and
appreciate the professionalism of FT staff.
But I hope many Fair Trade participants see my article as a fair warning about being co-opted by multinational corporations. I also appreciate your comment about the importance and significance of indigenous artifacts.
Please read my article "Earth Music" which justifies your concern about indigenous cultures and ancient traditions.
Thanks Nikki.
A lovely article full of both hope and failure. There are times where I dispair of anything of human organization deserving the title fair. Often, with the best of intentions, bad situations are made worse. And often with nefarious intentions potential solutions are perverted. Thanks for informing us and may I say, you handle criticism very tactfully as a true gentleman.
Dear Immartin,
Thanks for taking the time to write while travelling up West.
It is a pleasure to read your articles and comments. Yes, it is fair to say that sometimes potential solutions to a problem can be perverted. In fact, I have heard FT leaders and participants raised their concerns and unhappiness thru CBC interviews and other media about big conglomerates and transnationals identified with child slave labour ( buying raw materials from suppliers who kidnapped and forced at gunpoint children to work in cocoa farms) using Fair Trade logo to market their dairy and chocolate products.
I've heard a number of criticisms of fair trade, including some pretty strong ones originating from companies that are active in the fair trade movement (such as Equal Exchange, which chooses not to place the TransFair label on their products because of some of these concerns). However, I think this page presents a one-sided perspective which comes down too hard on the fair trade movement, and which also fails to present any positive alternatives or solutions to the problems it describes.
Also, this article doesn't even explain what fair trade is or why people support it before it gets into portraying a one-sided criticism of it. It helps to clearly outline what a movement is and what reasons are behind it before attacking it.
Are some of the points you are raising true and valid? Of course. Is fair trade the solution to all problems involving economic justice or human rights issues in developing countries? Of course not. But it's also not the universally evil thing that you portray it as in this page.
I would encourage everyone to seek out multiple perspectives. Fair trade is complex. It's one proposed solution to real problems people and communities face in developing countries. It achieves many good things, and it also fails to achieve many of the things that it sets out to do. If we are to improve fair trade or create something better, we need to understand all different perspectives, pros and cons, and form a balanced viewpoint rather than just taking sides.
This is a brilliant article; you have a great thought process. This is really informative, as we hardly know about these countries.
Thanks for the inspiring comment. This is the first topic I wrote for hubpages so all the excitement and adrenalin rush of writing something for a webpage perhaps made my ideas seem fresh and new.
I'm glad we can question fair trade, while still caring about poor people. Big companies aren't necessarily bad just because they're big. Social responsibility needs to be widespread, not just a coffee-shop specialty.
One issue is worker's rights. In some countries they are non-existant. Everyone deserves proper breaks, safety, food and water.
Another issue is land usage. Are we taking all the land to produce cocoa, while there already isn't even enough food for people?
So we need tough laws to prevent global exploitation. But we also need technology and efficiency, along with education. It's the only way to improve conditions in third-world countries.
There are many pros and cons about Fair Trade, its practice, effects and benefits on poor people and developing countries. While my article touches on the issue of multinational companies and social responsibility it is not my role to judge them based on their global reach and operations. But I do agree that social responsibility needs to be widespread and must be taken seriously.
I agree that workers rights need to be safeguarded and observed. It is true that in some countries they are non- existent. However, workers rights violations also happen in more developed countries, more so, when the workers are not organized and without the benefit of a strong labor union and the protection of a fair collective bargaining agreement. Big conglomerates always exist for profit. They are always happy to use divide and rule tactics to bust labor unions and deny workers just compensation and benefits.
On land usage, I take it that you have observed how greedy big transnational companies are when they are allowed by corrupt local political leaders to expand or grab the lands of poor hapless farmers. Global exploitation by big corporations and agribusiness will always happen when the people or workers are not organized and unionized and their national leaders are corrupt and shortsighted. Yes, all countries need technology and efficiency but not thru colonial oriented education or export oriented technology. There are no easy answers to your questions but I thank you for your thoughtful comments.
Great article, but I don't like the visual effect of narrow paragraphs. I think they should be wider. (sorry!)
Thanks for the suggestion AJL. I will try to reformat the font and make it wider.
Dear Cazort.
Thank you for your very insightful comment . I wrote “Fair Trade – Good or Bad to Poor Nations?” as a fair warning that the Fair Trade movement which earned millions of dollars in worldwide trading is not totally fair. My article is merely a response to what I read in globally distributed magazines and feature articles. If you think that I came down too hard on the fair trade movement, that is your opinion. Although, I do not agree with it, you have the right as well as I do to your opinion.
There are many trade articles and magazines that explain and “outline what a movement is and what reasons are behind it”. Unfortunately, I am not one of those highly paid writers. To make my point clear, I do not disagree with the people who support it. I am more concerned about the big corporations who use the Fair Trade logo to discredit the many good organizations and people behind it and the effects of some fair trade practices.
Thanks for accepting the points I raised as true and valid. I also agree that Fair Trade is not the panacea for third world peoples confronted by human rights violations and economic and social injustices. Yes, I agree that it is not universally evil. But there are worse consequences that may befall many countries if they are not eternally vigilant and allow their environment’s ecological balance and food sources to be destroyed and polluted by mono-crop plantations and profit-hungry transnational companies.
There are times when one has to take sides decisively to make things happen. I have taken the side of the oppressed and the exploited. And there are many of us in this world. I am one among them. Understanding this perspective can give all of us our point of reference in forming a more “balanced viewpoint” and opinion.
We may not agree on everything, but I truly appreciate your comment. Tomorrow, who knows if we might both agree on a certain issue. Remember, ”Everything changes. Nothing stays the same. Enjoy the moment”
really bad article, no argumentration.
Fair trade is about already existing cultures like tea plantations ...
Thanks for the comment. However, please clarify what you really mean by "no argumentration (sic)" and "Fair trade is about already existing cultures like tea plantations..."?
Why do you consider this a "really bad article?" Perhaps, I can learn a lesson or two about writing great articles from what you are about to say or write. Eagerly anticipating your response, manon.
Hello i am a student and i want to learn more about fair trade , i want to know people's opinions about it , that wether fair trade is good or bad , can you please tell me where i can find all that and thank you
Thanks for asking Fayed. A good start is to read the comments and my answers to these comments above which are open and frank discussions of Fair Trade pros and cons.
There are also good research materials from the public libraries.
Also visit the Fair Trade Stores and talk to their professional staff. The internet and international magazines are great sources of information. By doing these things you can start forming your opinion about Fair Trade. Of course, there are no easy answers to every question. We make our own choices in life based on what we see, our personal observation, what we read and experience. Good luck in your search and continuing journey to find the truth, my friend.
You wrote it very well! Fair trade can only be part of the answer. Mostly fair trade aims to deliver products for a better conscience to rich people. The whole answer has to be about giving more people work and wages they can spend their lifes on, send their children to school and establish a healthy environment. In the end the holistic approach has to aim for making these people and societies independent from welfare and transfers.
I like the approach combined with micro credits, helping the people to induce a growing regional economy.
Fair comment. I gather that you are, indeed, very observant of the concepts and practices of Fair Trade.
Very well said and written. Thanks.
thanks.. this article is lovely and very important for me because i have to write essay about fair trade and i was serched and i found this article and really its clear and useful about the subject ..
Thank you for your comment Rezan. Hope my aricle on Fair Trade will be give some useful insights to your essay readers. Best regards, Ed.
hi heheh
jona alfaro 2 years ago
Its an excellent article!!!