Cost of coffee.indd - RISC

federations of producers, co-operatives, family units, workshops for disabled people, state
organisations, private companies, and range in size from 20 to 200,000.
◆ A lot of the marketing and campaign materials produced by fair trade organisations focus
on the benefits of fair trade for family-sized producers. In fact, a large proportion of fairly
traded agricultural products are grown on commercial plantations by waged labourers. So
long as these enterprises respect basic International Labour Organisation (ILO) standards
and local government-set minimum wages, they qualify for fair trade status.
◆ These wage rates are often only sufficient to meet the most basic needs. For many fair trade
producers, including family units, life remains extremely hard. Although their income levels
are higher and more stable, their life choices are still limited, with difficult decisions to be
made between spending on health, education, housing etc. The edge may have been taken
off poverty, but their hard work does not earn a lifestyle remotely comparable to that of
consumers.
◆ Children often play an active economic role in farming communities and they make a vital
contribution at key stages such as harvesting. On a family farm this need not be detrimental
to children’s well being, if their health and education is not impaired. However, on
commercial plantations there is much greater danger of exploitation as children are treated
as a cheaper form of labour.
◆ Fair trade is dominated by North. Despite the involvement of producers’ representatives in
decision making, labelling organisations dominate process of setting criteria, monitoring,
marketing etc – they have more power because they are closer to the consumer and can
choose which producers to work with.
◆ Farmers still take most of the risks – the price of crop failure due to weather or pests, is not
shared by consumers or processors. Under current arrangments no additional premium is
given to cover extra time and cost involved in more sustainable production,
eg environmental protection or organic methods.
◆ In itself fair trade is not sufficient to create a more equitable world trading system because
power is held by transnational corporations (TNCs) in the North, supported by their
governments and international bodies such as the World Trade Organisation (WTO).
◆ TNCs are commited to increasing profits and maintaining shareholder value – sometimes,
as in case of Enron, resorting to false accounting to inflate their share price. This is
reinforced by the system of rewarding senior executives with stock options which means
their personal wealth is tied to share price.
◆ Some TNCs now embrace the idea of ‘corporate citizenship’ and include social and ethical
auditing, and environmental impact, in their mission statements. However, critics accuse
many TNCs of ‘greenwash’ – hyping their involvement in social and environmental projects
as a public relations exercise which masks their continued drive for the ‘bottom line’.
◆ A truly just trading system can only develop when there is a radical shift in the balance of
power so Southern countries can develop their economies to suit the needs of their own
people rather than the interests of Northern banks, TNCs and consumers.
◆ The current system of fair trade is a stage in the process of forcing such a shift. It is an
example of trading where profit is not the only ‘bottom line’, and the desire of consumers
for ‘value for money’ is balanced with the wish of producers to be free of poverty. It also
provides a means of increasing consumer awareness and creating a climate of opinion in
favour of change.
follow-up
◆ Hand out Actionpage: Pros & cons which summarises the benefits and limitations of fair
trade.
◆ Play the board game Coffee Culture. This explores some of the trading issues that effect
coffee producers in Nicaragua and illustrates the benefits of fair trade. It has been silk
screen printed onto a wipeable tablecloth and is designed as both an educational and
promotional tool for schools and youth groups, as well as café and restaurants that support
fair trade. It is entirely self-explanatory and comes with counters and dice, contained in an
attractive cloth bag. Available from RISC: admin@risc.org.uk.
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