Think tank report on fair trade creates controversy

The recent report saying that fair trade does little to help small farmers is creating quite a stir. The controversy is especially loud in the UK where free trade has flourished. As we linked to yesterday, a free market think tank said that large corporations do more to help small farmers than fair trade businesses can.

From the blog Just Means, writer Sarah Brown has this pro fair trade response to the report.

In a statement responding to the IEA's report, the Fairtrade Foundation points out that as a result of the premium paid to their farmers in Mali 95% of farmers' children go to school.

The truth is that Fairtrade is a consumer-backed movement. Attempts by organisations such as the IEA to discredit it for commercial reasons are malicious, but hopefully will ultimately fail due to the strength of public feeling on this issue.

Consumer-facing businesses need consumer goodwill and their CSR (Corporate Social Responsibility) strategies are partly based around ensuring that happens.

The trouble with such reports comes when they sow the seeds of doubt in the public's mind by subtly misusing data. The IEA report states 'The certification charge [for Fairtrade] starts at £1,570 in the first year' and points out that this is a huge amount of money for a poor farmer. What it fails to mention, however, is that the way Fairtrade works with farmers is via co-operatives, of around 50 farmers each - so just over £30 per person. In addition, the charity points out that it also has a fund to help pay for 75% of the cost of certification for eligible farmers. So Fairtrade turns out to be not quite so unaffordable after all.