How fair is Fair Trade and does it sell more coffee than regular label coffee?
We got two students to debate their opposing opinions. Here’s what they have to say.
FOR FAIR TRADE COFFEE
WORDS | Ben Nour
Call me an optimist, but I genuinely believe that the majority of consumers,
given the choice, will purchase products that are ethically beneficial.
As the most widely recognised ethical label, the influence of fair trade
cannot be understated, and there is a wealth of information that attests to the
fact that consumers are choosing Fairtrade-certified products more often each
Coffee is one of the most traded commodities in the world, but
unfortunately, over the past decade, prices paid to farmers have dropped
dramatically, affecting over 25 million farmers worldwide. Purchasing fair
trade labelled coffee guarantees that coffee farmers receive a minimum price of
AUD $3.80 per kilo, compared to the local price of about AUD 65 cents.
But does the fair trade label actually sell coffee? According to the statistics,
it does. A 2011 research report released by the Massachusetts Institute of
Technology, found that the majority of consumers surveyed preferred ethically
certified products over non-certified alternatives, and were willing to pay a
price premium for such products. They further found that the fair trade label
has a substantially more positive effect on sales, and that two of the most
popular bulk coffees sold in stores, rose by almost ten per cent when they were
labelled as fair trade.
Australia is one of the world’s fastest growing markets for fair trade
certified products. Australian consumers spent more than $191 million on
Fairtrade products in 2012, while Fairtrade’s average growth rate over the
past five years has been above 50 per cent. Specifically, retail sales of fair trade
labelled coffee in Australia stood at $5 million in 2005 – ten years later it had
grown to over $50 million. This impressive growth can be accounted to a global
growing awareness, and the popularity of fair trade certified products.
AGAINST FAIR TRADE COFFEE
WORDS | Fergus Halliday
It is reasonably accurate to say that we, university students, love our coffee.
Whether you trek down to the food court to get your caffeine fix or pick it
up on the way to a lecture, we all face the same decision of choosing between
our usual brew, or paying a little bit extra for a fair trade beverage. While we
aren’t exactly overflowing with cash, surely we can justify that little bit extra to
do some good in the world, right?
There’s a crucial misunderstanding among people as to how fair trade
works. Fair trade is neither cheap nor more efficient than ordinary production
models. While fair trade companies are often grouped with charities, they are a
business first, and foremost. In fact, the money that they make from Fair trade
products, rarely finds its way back to the third world countries they originate
from. When you consider that the premium added to the price is almost
entirely unregulated, it should come as no surprise that there have been several
recorded cases of corruption and kickbacks in the Fair trade industry.
On top of that, there isn’t even an economic argument to be made for fair
trade. There has been awfully little in terms of follow-up studies showing that
it helps to improve the economic prospects of third world countries. Instead,
a number of studies have shown that it has actually increased the level of
inequality due to its rigid wage conditions, which are counterproductive to
natural economic growth.
The raw, emotional manipulation that surrounds the marketing of fair
trade products is, itself, a bit unethical. I doubt a commercial entity could get
away with the kind of guilt tripping that fair trade companies partake in. Fair
trade companies are only economically competitive through the way they prey
on consumers desires to do good, and a general misunderstanding of where
their money goes.
So, although fair trade businesses might try to masquerade as charities, at
the end of the day, they are just another business looking to make a profit.
Have your say below!