Questioning the 'Fair Trade' Label
The following is based on the assumption that a robust discourse combined with well directed criticism within the 'fair trade' movement is an effective way to strengthen the ideals of 'fair trade'.
I started a company in Cambodia in 1996 in order to help the poor there sell handicrafts and develop new items as well. We now support roughly 350 workers doing mostly piecemeal work, but returning wages well in excess of existing wages. We also exceed every 'fair trade' wage I've seen as well.
Initially I was going to join the 'fair trade' movement, but I had some reservations. Some of the product I sourced I could not control the wage rates and I knew they were low. This product, woven mat material was provided by brokers, and no matter what we suggested, we could never be sure any increased payment would go to these workers. In fact, these brokers did not want us to know where these weavers were located either, because we would have been able to go direct and pay a higher price. A friend had joined the 'fair trade' movement and was certified 'fair trade'. The issue was - he was buying the same mats, the same price where the weavers were making 1/2 the poverty wage.
Such is the state of the 'fair trade' movement. While on the on hand, there is a massive effort to portray the stated intentions of 'fair trade' helping the poor, etc., at the same time, no one wants to tell you too much about where they source. You may go there yourself, pay the workers more or get the same product cheaper. If you pay more, you are competing at the same level as someone who is paying the minimum, or in some cases even less.
In essence, this broker mentality is what keeps wages low.
There is no adequate verification procedure in place to ensure 'fair trade' wages, plus once you are 'certified' (a rather dubious process) now there is no incentive to pay more.
What you have is a movement, not worker directed, but directed by 'fair trade marketeers' who see the selling of 'fair trade' as good business. While they pay lip service to existing problems (this also makes good press), the fact exists that once certified, there is no incentive to pay more. When a low standard is set, the workers can actually lose more money, because the low standard pulls the market down.
My company has developed product only to see it copied by 'fair trade' brokers, 'certified' profit-seeking business people with marketing degrees who bypass development and instead have an item copied cheaply, marked 'fair trade' , marketed by using a label with very little supporting detail, and then they pocket the difference in real costs of development plus the added dubious bonus of being 'fair trade'.
As for the weavers of those mats, as far as I know, only my business has raised qualms with brokers about this product. All the other companies now sourcing this product do so with no problem sporting the 'fair trade' label. My company is actively involved in seeing this rate raised but will the 'fair traders' follow suit?
I have a problem with the ethics involved in this simplistic labelling. My company has lost business because we fail to drink the koolaid of this new 'fair trade' movement, but instead have pushed for real reforms that may actually cost the marketeers money; publish locations where you produce and source all product (NIKE can do this but 'fair traders' cannot?) , develop your own product ideas, publish the rates you pay and how you hope to improve on those rates. These are actions that will empower workers and subject them to real market conditions, and create a fairer playing field.
It also seems that poverty is a condition of 'fair trade'. We can have poor people work for next to nothing, which begs the question 'who is benefitting most?'. With my company our goal is that people should have enough to contribute to their local economy, not just subsist. A budding middle class is what is needed to address social problems that contribute to poverty, ie lack of education, corruption, intimidation. So called 'fair trade' wage guidelines need to address the direction of wages.
In the meantime, people should stop selling the term 'fair trade'. Instead earn that distinction with supporting information. 'Fair trade' is not a measured commodity like rice or beans. It is an easily manipulated concept. How can we demand so much of companies like Walmart, and then just accept that all is good with a product once someone uses the 'fair trade' label?
Tom Yesberger
Baskets of Cambodia
I started a company in Cambodia in 1996 in order to help the poor there sell handicrafts and develop new items as well. We now support roughly 350 workers doing mostly piecemeal work, but returning wages well in excess of existing wages. We also exceed every 'fair trade' wage I've seen as well.
Initially I was going to join the 'fair trade' movement, but I had some reservations. Some of the product I sourced I could not control the wage rates and I knew they were low. This product, woven mat material was provided by brokers, and no matter what we suggested, we could never be sure any increased payment would go to these workers. In fact, these brokers did not want us to know where these weavers were located either, because we would have been able to go direct and pay a higher price. A friend had joined the 'fair trade' movement and was certified 'fair trade'. The issue was - he was buying the same mats, the same price where the weavers were making 1/2 the poverty wage.
Such is the state of the 'fair trade' movement. While on the on hand, there is a massive effort to portray the stated intentions of 'fair trade' helping the poor, etc., at the same time, no one wants to tell you too much about where they source. You may go there yourself, pay the workers more or get the same product cheaper. If you pay more, you are competing at the same level as someone who is paying the minimum, or in some cases even less.
In essence, this broker mentality is what keeps wages low.
There is no adequate verification procedure in place to ensure 'fair trade' wages, plus once you are 'certified' (a rather dubious process) now there is no incentive to pay more.
What you have is a movement, not worker directed, but directed by 'fair trade marketeers' who see the selling of 'fair trade' as good business. While they pay lip service to existing problems (this also makes good press), the fact exists that once certified, there is no incentive to pay more. When a low standard is set, the workers can actually lose more money, because the low standard pulls the market down.
My company has developed product only to see it copied by 'fair trade' brokers, 'certified' profit-seeking business people with marketing degrees who bypass development and instead have an item copied cheaply, marked 'fair trade' , marketed by using a label with very little supporting detail, and then they pocket the difference in real costs of development plus the added dubious bonus of being 'fair trade'.
As for the weavers of those mats, as far as I know, only my business has raised qualms with brokers about this product. All the other companies now sourcing this product do so with no problem sporting the 'fair trade' label. My company is actively involved in seeing this rate raised but will the 'fair traders' follow suit?
I have a problem with the ethics involved in this simplistic labelling. My company has lost business because we fail to drink the koolaid of this new 'fair trade' movement, but instead have pushed for real reforms that may actually cost the marketeers money; publish locations where you produce and source all product (NIKE can do this but 'fair traders' cannot?) , develop your own product ideas, publish the rates you pay and how you hope to improve on those rates. These are actions that will empower workers and subject them to real market conditions, and create a fairer playing field.
It also seems that poverty is a condition of 'fair trade'. We can have poor people work for next to nothing, which begs the question 'who is benefitting most?'. With my company our goal is that people should have enough to contribute to their local economy, not just subsist. A budding middle class is what is needed to address social problems that contribute to poverty, ie lack of education, corruption, intimidation. So called 'fair trade' wage guidelines need to address the direction of wages.
In the meantime, people should stop selling the term 'fair trade'. Instead earn that distinction with supporting information. 'Fair trade' is not a measured commodity like rice or beans. It is an easily manipulated concept. How can we demand so much of companies like Walmart, and then just accept that all is good with a product once someone uses the 'fair trade' label?
Tom Yesberger
Baskets of Cambodia
I'm a fan of Fairtrade because I think it's a good start towards bringing issues to public attention and making changes. However, I very much doubt it's without fault and those who believe in it should stand up and help change these as we progress. Most of the attacks on Fair Trade I've seen are very poor and hold no substance. However the issues Tom raises here are very valid and without the ideological fervour usually found. I wish Tom success and hope ethical trading initatives (including but not limited to Fair Trade) don't just bury there head in the sand to these issues but start to act upon them. I will continue to buy Fair Trade where possible because I have trust in the brand to work towards a more favourable world for all - unlike when you purchase non-fair trade brands where you are atking pure pot luck as to the intentions of the company. But we all are responsible for not accepting Fair Trade with blind faith, and continuing to ask these questions to ensure it progresses in the correct direct.
Reply to this
Chris- Thanks for the note. My only difference is that I do not at this time discriminate on the basis of a product being fair trade or not, but focus instead on transparency. The label can also disguise transparency and in fact there are many cases of where this is so. At the same time, the original intent of fair trade I think is sound. Those who argue purely 'supply side' economics forget that concern for workers' welfare is a factor of the marketplace whether they share this concern or not. It is not 'anti-market'. As consumers we are also in a sense employers- but whether or not there is a label, there are workers involved and any company that promotes transparency is worth consideration. The label, if used properly should act as a door to this transparency. If I merely see the label without transparency, I am probably less inclined to buy and a bit cynical as I feel I am promoting the exploitation of the workers on the ground - who are rarely an active part of the 'fair trade' argument. We are marketing them - without their participation while hiding them at the same time from transparency. This arrangement is too lop- sided in favor of the marketeer. Best- Tom
Reply to this