| Old McDonald had a farm... |
|
| Written by Tom Clougherty | |
| Tuesday, 09 January 2007 | |
|
I was on More4 News last night discussing McDonald's decision to source every bean of its coffee (in the UK) from farms certified by the Rainforest Alliance. Some might assume that this is another "Fair trade" scheme, based on subsidising a minority of farmers and thus perpetuating the chronic overproduction that causes low prices in the first place. In fact, the Rainforest Alliance is very different from Fairtrade - and is an altogether more commendable organisation. Unlike Fairtrade they do not charge a premium or guarantee a minimum price. Instead the Rainforest Alliance - an independent non-profit organisation - only certifies farms that meet certain social and environmental standards, as well as providing training, advice and improved access to credit. The market alone determines the prices paid to farmers - and if Rainforest Alliance farmers do get paid more it is simply because they are adding value to their product. Importantly, and again unlike Fairtrade, the Rainforest Alliance does not make political assumptions about the organisation of labour. Any can be certified if they meet the required standards. McDonald's announcement is a welcome reminder that big business is not the enemy of world development. Indeed, it can be an extremely positive force. Moreover, their decision shows that government regulation and state intervention are not required to make business "ethical". Markets represent a constant referendum, where people vote with their money - markets thus represent people’s preferences. If consumers demand ethical products then businesses like McDonald's will provide them. Their intention may be to increase profits, but that isn't really the point. My only reservation about this announcement - which I expressed on More4 last night - is that the Rainforest Alliance's focus seems to be on Central and South American countries like Mexico and Brazil. While these countries remain poor by our standards they are fast emerging economies that can fend for themselves in the international marketplace and which are naturally developing higher social and environmental standards as they become wealthier. Africa, where coffee drinking was invented, is not doing so well. If big corporations really want to do something for world poverty, they could do far worse than investing in African produce and African farmers. |