Free market think tank critiques fair trade

A free market think tank says that it is still unproven if fair trade helps poor farmers more. The Institute of Economic Affairs says that big companies do more for the small farmer than fair trade. The Institute points to fair trade's insistence that farmers avoid using genetically modified seeds as evidence that fair trade does more to appease those in the west than help the farmer.

From the Guardian, writer Simon Bowers details the report and a response from the FairTrade Foundation.

The report specifically attacks the Fairtrade Foundation's refusal to accept child labour and genetically modified technology, suggesting these strictures represent "the whims of western consumers" rather than the needs of farmers.

Consistent with the IEA's broader free-market agenda, the paper claims that open, subsidy-free international trade is the best way of advancing the interests of the world's poorest regions.

"Fairtrade rhetoric is often seen as an unreasonable smear campaign against high-end marketeers and retailers who resist the Fairtrade model," says the report by Dundee University lecturer Sushil Mohan.

"In 2000 activist groups … launched an attack on Starbucks for exploiting farmers. Yet, given its size, Starbucks is likely to have done far more than Fairtrade to improve the lot of coffee growers in the countries from which it purchases."

In response, the Fairtrade Foundation said the report was a "flawed, partial analysis". It added: "It is wrong to suggest Fairtrade does not offer a long-term strategy for development.

"In Mali, Fairtrade cotton farmers are earning 50% more than conventional farmers. Some 95% of the children of Mali's Fairtrade organic farmers go to school because farming communities receive more money. This is more than double the national average in the fourth most deprived nation on earth."