by Krullix

Created on: October 03, 2008

Over the last few decades there has been an increase in supermarket items labelled with a Fair Trade logo. These products are usually a little more expensive and I have often wondered whether purchasing these goods really makes a difference. Moreover, I have often pondered whether Fair Trade is actually fair, so I decided to do a little research.

For the people who can afford to pay the premium prices for those goods, Fair Trade means that a fair price goes straight to the producer, who deals directly with the wholesaler, cutting out various middlemen. In simplistic terms, the idea of Fair Trade is a good one. A farmer produces coffee, for example, and through the Fair Trade system can now deal directly with the wholesaler, often cutting out local buyers, exporters and shippers, and keep more of the profits for themselves. On the face of it, for impoverished farmers, this is a good thing.

However, like so many other ideas, such as carbon off-setting and bio-fuels, the big corporations have jumped on the back of Fair Trade, which has now become a multi-million pound industry. Critics of Fair Trade say that the middlemen who were cut out of the trade process have simply been replaced by organisations which sell the rights to use Fair Trade logos and act ....well, as middlemen. Other critics say the price of Fair Trade goods in the supermarkets is too high, which therefore defeats the object because the consumer base for Fair Trade goods is then limited to those with the budget to afford them. Too many pounds, dollars or euros would appear to be ending up in the pockets of retailers and the new middlemen.

The trouble with the Fair Trade label is that it doesn't tell you the amount which is paid to farmers and these figures are hard to come by. A report in the New York Times examined figures provided by TransFair, the company which controls Fair Trade certification in the US. Using one example of figures from 2006, the report stated that a cocoa farmer received just 3 cents of the $3.49 spent on a 3.5 ounce chocolate bar, sold at one well known American retailer. But different commodities bring with them different terms, and the same report showed that farmers producing sugar can receive 24 cents for every one-pound bag of sugar sold at $3.79. A coffee farmer would have received $1.26 for a bag of Fair Trade coffee sold at $10.00. The usual market rate outside the Fair Trade scheme at the time was $1.10 but even if the bags of coffee, sugar or bars of chocolate were

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