I can just about forgive the major inaccuracy in this recent Sunday Star Times article:
Sunday Star Times Article "Chocolate - The Fair Factor" 04-04-2010
Trade Aid was selling fair trade chocolate in New Zealand a good decade before Scarborough Fair entered the market. Theirs was merely the first fair trade chocolate range aimed squarely at supermarket distribution. But even ours wasn't the first fair trade chocolate found on these shores - a lone rider from the Green and Black's range already bore fair trade certification by that stage.
More importantly and very disappointingly, the article's subsection entitled 'Fair or Flop?' regurgitated inaccurate comments from two of fair trade's most cynical opponents. I'm all for well-informed debate about the merits of various approaches to trade - but this isn't it. Economic theorists such as Tim Harford and Brink Lindsay (both quoted in the article) propose that if we go around paying third world producers enough money to adequately feed their families and put their kids through school, we're only encouraging them to overproduce and to thereby send commodity prices spiralling even lower.
But this isn't how trade works, it's just an oversimplified theory. Blowouts in commodity production occur for rather more complex reasons, such as European subsidisation creating wine lakes, or the IMF pressurizing economies to grow more cash crops in order to finance their debts. Depressingly, through periods of production booms and busts, commodity prices have tracked grindingly downhill for the past century. Clearly other forces are also at play.
For the many third world commodity producers I've met, fairer trading terms are unlikely to spur them into an overproductive cycle. They’re unable to access the capital that would allow them to diversify out of cocoa, coffee, sugar or whatever it is that they produce. They can’t afford the technological improvements that would boost their harvests, and because they’re also unable to rip up their crops for want of alternative cash income options, they're pretty much trapped. While fairer prices might encourage some to increase their production, many would also welcome the economic freedom that savings would allow them and which might help them to reduce their reliance on farming as their main source of income. And most of the next generation growing up on farms from Ethiopia through to Peru won't be able to acquire enough land to sustain an income from farming, anyway.
This is where fairer trade becomes so important to third world producers; they want to offer their kids a healthier and better educated life than they have had, whether they be involved in trade themselves or not. They want to lift themselves out of poverty, and to avoid difficult situations where bonded child labourers get caught up in production as they do in the cocoa fields of western Africa.
By all means let's have reasoned debate about whether or not these are goals we as New Zealand consumers wish to support through their purchases, and whether or not fair trade is the most effective way to support disadvantaged producers to achieve such goals. But at least let's focus on factors that actually influence market behaviour and move past the throwaway comment of agenda-driven theorists.
Sunday Star Times Article "Chocolate - The Fair Factor" 04-04-2010
Trade Aid was selling fair trade chocolate in New Zealand a good decade before Scarborough Fair entered the market. Theirs was merely the first fair trade chocolate range aimed squarely at supermarket distribution. But even ours wasn't the first fair trade chocolate found on these shores - a lone rider from the Green and Black's range already bore fair trade certification by that stage.
More importantly and very disappointingly, the article's subsection entitled 'Fair or Flop?' regurgitated inaccurate comments from two of fair trade's most cynical opponents. I'm all for well-informed debate about the merits of various approaches to trade - but this isn't it. Economic theorists such as Tim Harford and Brink Lindsay (both quoted in the article) propose that if we go around paying third world producers enough money to adequately feed their families and put their kids through school, we're only encouraging them to overproduce and to thereby send commodity prices spiralling even lower.
But this isn't how trade works, it's just an oversimplified theory. Blowouts in commodity production occur for rather more complex reasons, such as European subsidisation creating wine lakes, or the IMF pressurizing economies to grow more cash crops in order to finance their debts. Depressingly, through periods of production booms and busts, commodity prices have tracked grindingly downhill for the past century. Clearly other forces are also at play.
For the many third world commodity producers I've met, fairer trading terms are unlikely to spur them into an overproductive cycle. They’re unable to access the capital that would allow them to diversify out of cocoa, coffee, sugar or whatever it is that they produce. They can’t afford the technological improvements that would boost their harvests, and because they’re also unable to rip up their crops for want of alternative cash income options, they're pretty much trapped. While fairer prices might encourage some to increase their production, many would also welcome the economic freedom that savings would allow them and which might help them to reduce their reliance on farming as their main source of income. And most of the next generation growing up on farms from Ethiopia through to Peru won't be able to acquire enough land to sustain an income from farming, anyway.
This is where fairer trade becomes so important to third world producers; they want to offer their kids a healthier and better educated life than they have had, whether they be involved in trade themselves or not. They want to lift themselves out of poverty, and to avoid difficult situations where bonded child labourers get caught up in production as they do in the cocoa fields of western Africa.
By all means let's have reasoned debate about whether or not these are goals we as New Zealand consumers wish to support through their purchases, and whether or not fair trade is the most effective way to support disadvantaged producers to achieve such goals. But at least let's focus on factors that actually influence market behaviour and move past the throwaway comment of agenda-driven theorists.
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