How Fair is "Fairtrade" Coffee?



Four years of micro-analysis in Uganda and Ethiopia led up to April’s publication by the School of Oriental and African Studies (SOAS) at London University: Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda (FTEPR) Final Report. The report, a detailed account of various plantations in both countries, suggests that perhaps “Fairtrade” coffee isn’t so fair after all.

“Fairtrade may ‘work’ but it does not quite do what it says on most of the labels,” the report says. “It aggravates rural inequality and at best may do so by supporting the emergence of rural capitalist producers; and it fails to make a difference, on the data collected, to the welfare of the poorest people involved in the Fairtrade chain, i.e. manual agricultural wage workers.”

The report was unable to find evidence that Fairtrade marketing made any difference to wages or working conditions, and in many cases, found that workers on certified farms were actually paid less and endured working conditions worse than their uncertified counterparts.

Fairtrade may ‘work’ but it does not quite do what it says on most of the labels: it aggravates rural inequality…and it fails to make a difference, on the data collected, to the welfare of the poorest people involved in the Fairtrade chain…

In both countries, the study found the proportion of wage earners with wages less than 60% of the median wage was higher in Fairtrade-certified coffee and flower production.

“The evidence in this research suggests that Fairtrade certification has not succeeded in serving the interests of poor rural people who depend on access to wage employment,” says the report, which shows labourers of Fairtrade farms involved in the study were paid less per day on average and had access to fewer working days per year.

When small-scale farms of both variety were compared, working conditions on certified farms were generally worse in Ethiopia, whereas Uganda was variable, and only marginally better in some aspects. The working conditions included factors like housing, free meals, clean toilets and overtime compensation. Though the study suggested access to loans was more likely on Fairtrade-certified farms, it recognized that that may not be a good thing.

fairtrade foundationThe Fairtrade Foundation, a non-profit organization that licenses Fairtrade goods in the United Kingdom and member of Fairtrade Labelling Organisations International, had much to say about the report. It criticized the proportion of certified to uncertified farms and pointed out the lack of documentation around how much Fairtrade produce was being sold on the certified farms included (and consequently the amount of premium received, not to mention the proportion intended for wages versus community projects). Still, the organization agreed that more can be done to help extremely poor labourers in export-driven agricultural commodities.

“We know that Fairtrade makes a difference to the lives of 1.4 million farmers and workers, and many other studies have backed this up,” said Michael Gidney, CEO of Fairtrade Foundation in response to the report. “When people reach for a product with the FAIRTRADE Mark, they are making a difference in the lives of the people who grew them.  If we want to have an even greater impact, we need more of those customers – and more companies and donors – to back Fairtrade and campaign for trade justice.”

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