Let's not forget what Fairtrade is, a branded payment of more than the market price of a product to engage in a transfer to those who sell the product.
Yes people can choose Fairtrade, but with fair trade comes one assertion, one assumption and one deception.
The assertion is fair trade is good for people in developing countries. Paying people more than the market price for something is good for them. This of course encourages them to produce more, putting more pressure on the market price. You see, the market price is a signal of demand compared to supply. Interfering with that means overproduction, further distorting what people produce. It's basic economics, but it is hardly surprising the do-gooding left don't understand that.
The assumption is that free trade is bad. Of course free trade is comparatively rare in agricultural commodities. You can blame the EU first, US second, Japan third and others, but whilst attention is taken away from liberalising trade in agriculture with the Fair Trade trend, it means the gross distortions and subsidies seen in global trade in agricultural commodities continues. These are distortions that increased due to Barack Obama and which the EU shows precious little sign of confronting, largely because of the parasitical French.
The grotesque fraud is Fair Trade diverts attention from trade barriers that impoverish farmers in developing countries, but the economic illiteracy of the left continues to support this nonsense.
So what is the deception? That the premium paid for Fair Trade all goes to the poor farmers. Nonsense. Much of the premium is skimmed off, because Fair Trade products attract people who are less price sensitive, so everyone from retailer back can skim a little more off. It's a nice way of ripping you off under the guise of helping the poor.
You want to know more? Read this IEA report, which exposes Fair trade as being an wholly inappropriate way of helping the poor. Notably 50% of the revenue from Fair Trade levies is spent on the Fair Trade corporate brand itself on self promotion.
"50% of this income was spent on so-called educational activities and most of the remainder was spent on certification, licensing and product development. In fact, the educational activities involve campaigning and promoting the Fairtrade brand through Fairtrade fortnight, promoting Fairtrade schools etc. These are all activities that effectively promote Fairtrade’s own brand....It is most unusual for a charitable foundation whose objectives are to help the poor in under-developed countries to use such a large proportion of its revenues on activities simply designed to increase its own size. It would be surprising if Fairtrade customers were aware of this."
The Adam Smith Institute found that 10% of the Fair Trade premium actually got to the producer.
Indeed. If you want to help people in poorer countries you might do two things:
- Support campaigns for free trade, oppose politicians and lobbyists who oppose it; and
- Donate to charities with sound reputations for high quality development projects. Note, none have the initials UN attached to them.
Meanwhile, Cadbury now sells overpriced poor quality chocolate flavoured candy. I will be even less likely to buy it now.