Does Fairtrade really help?

A new report by The Institute of Economic Affairs has thrown some very cold water on the theory that buying Fair Trade goods helps producers in the poorest countries

As you can imagine by their title the Institute's report is thorough and weighty (and you can read it by clicking here http://www.iea.org.uk/record.jsp?type=release&ID=217)  but the crux of it is as follows

• Fair Trade is not helping the poorest countries "Fair Trade does not focus on the poorest countries. Fair Trade penetration is greater in middle income countries, rather than in poor ones. The top four nations by Fair Trade certified producers in 2007 were Mexico, Colombia, Peru and South Africa. These nations had an average GDP per capita of $4,790 in 2007. The thirteen nations with only one Fair Trade certified producer had average GDP per capita of just $2,807 in 2007.
• There is no information on how much of the premium which is charged for Fair Trade actually gets back to the producer
• The administration fee starts at $1500 which is far too high for the poorest producers to afford
• Fair Trade demand exclusivity which means that other helpful organisations such as the Rainbow Alliance are squeezed out

As a soft toy wholesaler we are continually looking out for more fair trade suppliers so you would think that we would be up in arms about this report but actually we think they have got a point.

We can understand why you need a brand which consumers are able to trust other wise any body could stick "Fair Trade" on their products, charge a premium and have no idea how or where the products are produced. However the admin costs are prohibitive and we do not deal with anyone who has the Fair Trade mark simply beciase they could not produce enough volume to make the admin/marketing cost worth while

We have a very easy way of finding out how much benefit the workers get from the money we pay. We visit them! On 3rd Dec we are going to Bangladesh to visit Samantha Morshed and the workers co-operative and see for ourselves how the Pebble cotton crochet toys benefit their lives.

If we were a Tesco buyer we would not have the time to do this so we would need a recognised brand to do this work for them

So in responce to The Institute of Economic Affairs we would say this. The model for paying workers a fair slice of the money paid for their goods is one which works. How you monitor this is the problem.

Our answer? Buy from small companies who check themselves rather than relying on expensive trade marks