Fairtrade 2.0
Posted on 3 November 2005
One of the things I'm down in everyone's rolodex for is as a leading critic of the Fairtrade scheme. It's brought me a lot of good media hits - like Channel Four News and BBC Breakfast (interviewed by the superb Natasha Kaplinski). But I've increasingly found being a critic of Fairtrade somewhat uncomfortable. After all, if the Globalisation Institute is about anything, it's about enterprise-based solutions to poverty. And that is, surely, what Fairtrade attempts to be. Fairtrade fits in nicely with the GI's meme that it's better to help developing countries by putting the money in at the bottom, rather than at the top through governments.
Let's face it, the Fairtrade scheme - despite its provocative name - is not the opposite of free trade. It can go hand in hand with free trade - after all, it's about consumers being free to choose to be altruistic when buying coffee. Sure, some of Fairtrade's supporters have argued that it should become compulsory, through the World Trade Organization, but the scheme in its current form is entirely compatible with free trade. I'm worried when people like Harriet Lamb, the director of the Fairtrade Foundation, calls for the Fairtrade scheme to somehow be the model for the WTO Doha round, as though mandating prices in the world economy (i.e. Sovietising the world economy) would be good. But I think the Fairtrade Foundation has itself been moderating some of its positions, and the Foundation's Ian Bretman tells me that he was employed as deputy director in order to bring a business perspective to the organisation.
And yet I retain deep reservations about the scheme in its current form. When you examine a scheme like microcredit, it has built-in mechanisms for helping people climb up the economic ladder - mechanisms missing in Fairtrade. The Fairtrade scheme needs to be made less bureaucratic and better at getting the most worthy farmers onboard, there needs to be work to ensure that there are incentives for mechanization and investment, and there needs to be a way of helping people to move onto bigger and better things once they reach a certain living standard. We are practical people here at the GI, so next year we will be releasing a report, Fairtrade 2.0, with a blueprint for how to reform the scheme. Watch this space.