I had read Mr. Claar’s book awhile back and confess I had pretty much dismissed it for some of the errors that Rodney addresses above. My colleague Michael Sheridan has been tackling the more recent critiques based on his work with CRS on a four country coffee project with thousands of farmers. I commend his observations to you:
http://coffeelands.crs.org/2011/05/what-that-study-means-to-me/

But I am in this space in reference to the claims of smug self-righteousness and slacktivism. I’m writing as an employee of CRS, the official humanitarian agency of the Catholic community in the US, AND as a person of faith (my tradition is Quakerism).

I’ve been involved in Fair Trade for more than a decade both within CRS and without. In many different communities I have witnessed that the Fair Trade movement–with its focus on offering equitable opportunities and developing the common good, not just prices or labels–brings out the best in people. Whether it is on a farm in Nicaragua or a college campus in Ohio, the principles of Fair Trade, with their focus on dignity, stewardship, and empowerment, actually do in many cases transform people’s relationship with each other, with consumption practices, with power dynamics, and with the planet.

Don’t get me wrong, Fair Trade is far from perfect. At times, when I have been confronted with some of the factual realities of the Fair Trade certification system or practices of Fair Trade companies (not just coffee mind you but also crafts, chocolate, fruit, etc) I have had sleepless nights worrying I was promoting an approach that was too far removed from its claims. I also recognized that in an effort to distill Fair Trade’s potential into simple slogans or “elevator speeches” educators like myself contribute to slacktivism if we suggest that buying the right cup of brew will eliminate poverty.

I know that I make my (good) living convincing institutions and individuals that Fair Trade is a way to live in solidarity with the poor, that Fair Trade is a model that can transform the way market-based business is done and that, on the whole, its impacts are positive and supportable. The doubts raised in this blog and other places are deeply relevant to me as a person and as a professional.

Reading the research, talking with the analysts, experiencing the impacts, what I am generally at peace with is that Fair Trade does more GOOD than harm. Recently we posted some testimonials to that effect on You Tube (just search Catholic Relief Services Fair Trade).

Legitimate critiques should be welcomed and should inform the practices of the Fair Trade movement. Nonprofit organizations, businesses, cooperatives, and faith communities need to hold each other accountable. We need to do so in partnership with our brothers and sisters around the world who are, supposedly, at the center of our concern.

We at CRS welcome open debate, productive suggestions, and engagement in our efforts. CRS Fair Trade is working to “build an economy for everyone.” That means every one of us needs to be involved and I’m not sure finger pointing gets us to a better place. We are working to deliver not just on the promises of Fair Trade but on the Gospel call to economic justice. Please join the Fair Trade movement; don’t abandon it.

Yes, we’re the folks who jumpstarted the Fair Trade coffee movement in the US 25 years ago. And so we really ought to weigh in.

Unfortunately, this post, and the book & book review cited, contain more errors, distortions and misunderstandings than I can address here.

So I’ll just tackle some of the issues.

• Victor Claar (the author/free trade advocate at the center of this discussion) has not worked in the coffee trade, and he’s relying on text-book theories of how commodities markets are _supposed_ to work. In contrast we’re actually in the thick of the activity that he’s making guesses about. We’re working with farmers, and their co-operatives, and with many allies at all points of the supply chain. And thanks to the market forces that Mr. Claar adores we have to be on top of our game and know what we’re doing. We know from 25 years of direct experience that the economics and market forces faces farmers does not match his simple notions.

• His critique is also flawed because it is a MACRO-economic analysis of what is a MICRO-economic practice. That is like trying to use monetary policy theory for deciding if you should switch cell phone carriers.

• Two flaws in Claar’s argument is that he assumes that coffee farmers actually have better options available to them “if only do-gooders like Equal Exchange didn’t misguide them with distorted price signals”. And he assumes that it switching crops is a simple, essentially cost-free matter, without significant risks or obstacles.

We work over 20+ co-operatives in 14 countries who together represent many thousands of coffee farmers and can assure you that the real world in rural Guatemala or Ethiopia is vastly different than he implies.

A typical coffee farmer grows up on a mountain or hillside, on a plot his or her family has tended to and invested in for a generation or more. The farm is a day’s walk from the nearest town and maybe a four-day drive from the nearest port. This person has very limited economic choices. He/she cannot simply choose to replace their coffee orchard with a cherry or apple orchard. They cannot follow one season’s price signals and switch to soy beans or strawberries, and then switch back again. And even if they could they lack the commercial and physical infrastructure requisite for the new crop (for ex. a continuous chain of refrigerated trucks, warehouses and ships for perishable fruit and vegetables). And the agricultural and commercial knowledge required to succeed with the new crop is missing too (and don’t hold your breath for armies of technical advisors from the big cities to show up and provide this know-how for free).

With very limited schooling in their community they have little or no access to “professional” career paths. Unfortunately, some of the choices that they DO have before them are to grow drugs, move to the slums around Lima or Nairobi, or migrate illegally to the U.S. or Europe.

The fact is that farmers the world over are usually making prudent decisions in very constrained circumstances. EVEN AT THE TYPICALLY LOW-MARKET PRICES, GROWING COFFEE (or cacao or bananas etc) IS OFTEN THE MOST RATIONAL, UTILITY-MAXIMIZING, RISK-MINIMIZING DECISION AMONG MANY POOR CHOICES AVAILABLE TO THEM.
With Fair Trade we make their hard work a little better compensated, a little less risky and a little more sustainable (both economically and ecologically), and in this way we try to make the transaction a little more just.

And this is a big part of the reason why 10 faith-based organizations partner with, and endorse Equal Exchange’s work, and have worked with us for up to 13 years now. Many of them also work with farmers in developing countries and they know well that conventional markets often work very badly for the very poor. And they have seen – year after year – the positive, sustainable, commercially viable difference Fair Trade makes.

You can see a list of our partners at: http://www.equalexchange.coop/interfaith-program

(You can read a longer version of this pt of view at http://www.yaledailynews.com/news/2011/feb/22/north-a-fair-shake-for-world-farmers/

Respectfully, Rodney North
http://www.EqualExchange.coop

As previously noted, the problem is when larger companies like Wal-Mart, Target and even Starbucks get in on the action and mess up the equilibrium. On a small scale, fair trade should work well because it is based on direct relationships between roasters and villages.

Finally, critics should remember that many of us who purchase fair-trade coffee do so because the coffee is often whole bean, locally roasted and far superior to most grocery store offerings.

I understand the dislike of criticism without solutions, but what’s the point of adhering to a solution that isn’t one, and not wanting to talk about the problem, just because it’s different from the original problem?

Actually, no. Fair trade is, surprisingly enough, a market-based idea, as opposed to a government-based one. As far as I know the state isn’t setting the prices or subsidizing the coffee growers. It’s the consumer who’s making the choice to spend a little extra dough on a pound of coffee.

I don’t know. There are a lot more costs than the beans themselves though. My uneducated guess would be the cost of transporting them.

Tod:

I think this may be a growing problem. The economic right has no solutions, and a few of us are becoming disenchanted with it.

Ultimately, then, “fair trade” isn’t really trade, and it isn’t really fair.