Fairtrade is accused of doing less for coffee farmers than Starbucks

Fairtrade's requirements reflect 'whims of western consumers' rather than needs of those in developing world, says report

Multinational companies such as Starbucks, Kraft and Nestlé do more for developing-world coffee farmers than the Fairtrade Foundation, according to a critical report from a free-market thinktank.

Describing Fairtrade as costly, opaque and substantially unproven, the 130-page report commissioned by the Institute of Economic Affairs (IEA) says: "Fairtrade requirements [on farmers] may well reflect the subjective views of western consumers and not the real needs of poor producers."

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."

The IEA's scathing attack comes after the Fairtrade movement enjoyed one of its most successful periods last year, breaking into the mainstream chocolate market for the first time by signing up the Cadbury's Dairy Milk brand. The group also won a pledge from Starbucks in the UK to only use Fairtrade coffee for its espresso-based drinks.

Fairtrade-certified farming co-operatives receive a "social premium" of between 5% and 10% over the open-market price for their crops, as well as a minimum price guarantee should volatile commodity markets drop below a certain level.

However, the IEA argues that western shoppers looking to make ethical choices may well be duped over how much of the additional price paid for Fairtrade goods at the checkout actually reaches Fairtrade farmers.

It points to speculation that retailers and food groups may be preying on consumers' better nature in order to add their own mark-ups on Fairtrade goods.

The report is not the first time the IEA has attacked the Fairtrade movement and the opposition has been led by Philip Booth, the thinktank's editorial and programme director.

A prominent Catholic, Booth has objected to church literature pushing Fairtrade products. "I have been told [via the Catholic diocese of Arundel website] that not to buy Fairtrade products is a sin worse than theft, that not buying Fairtrade products is making a deliberate choice to take from the poor," he said.

From: The Guardian