What's the Point of Fairtrade?

JustShare / Trading Visions panel discussion for Fairtrade Fortnight
Monday 25th February 2008

Panel guests: Kojo Aduhene-Tano and Paul Ayepah (Kuapa Kokoo Fairtrade cooperative, Ghana); Mark Boleat (Consultant); Adam Brett (Tropical Wholefoods); Chris Davis (Fairtrade Foundation); Canon Ed Newell (St Paul's Institute); Professor Paul Palmer (Cass Business School); Sophi Tranchell (Divine Chocolate).

This Fairtrade Fortnight event in association with JustShare had a good audience and also welcomed two Kuapa Kokoo farmers brought over from Ghana by Divine Chocolate.

Sophi Tranchell began by describing Divine's unique structure; it is 45 per cent owned by the Kuapa Kokoo cooperative in Ghana and farmers received their first shareholder dividends of £47,000 in 2007. Moreover, the point of Fairtrade was to challenge the unfair prevailing international trading system and to ensure that farmers received a guaranteed, stable and fair minimum price for their exports.

Kojo Aduhene-Tano and Paul Ayepah described the benefits of Fairtrade for their colleagues in the Kuapa Kokoo cooperative in Ghana. The social premium included in the Fairtrade price had enabled schools and hospitals to be built, the guaranteed cocoa price mean that some diversification of employment had been possible, and the governance structure of the cooperative had encouraged co-working and increasing interest in democracy; some members of Kuapa Kokoo were standing in Ghana's forthcoming elections.

Mark Boleat then questioned the Fairtrade movement's potential to end poverty. He regarded it as a charitable endeavour that could divert attention from more viable solutions, and suggested that it allowed rich consumers to feel that they were saving the world just by buying fairtrade chocolate. Further, it emphasised the co-operative business model which was not always appropriate. Interfering with prices gave the wrong market signals and encouraged more farmers to enter an unsustainable market. Finally, the Fairtrade brand implied, unfairly, that all other forms of trade were unfair.

In response, Chris Davis commented that if international trade were fair, 2 billion people would not currently live in poverty. Fairtrade would not end world poverty overnight, but it was no longer a niche movement; there was an annual turnover of £500m in fairly traded goods and 7 million people in poorer countries benefited from it, with these figures increasing all the time. Equally importantly, buying Fairtrade enabled consumers to send a strong signal to governments, and governments were in a position to do even more to address world poverty.

Adam Brett agreed that the point of Fairtrade was to address the inequalities in international trade; the US government's subsidies to its cotton farmers, for example, and the economies of scale and technology available to large western corporations, meant that small farmers in the developing world could never compete on a level playing field.

Summing up, Paul Palmer noted that Fairtrade gave consumers greater choice and enabled them to express their discontent with the increasing dominance and unfair practices of some larger corporations, but was arguably only dealing with the problem at the edges. Co-operatives might have more scope than generally believed, but there were also environmental impacts to fairtrade. However, if one believed that the world could be changed incrementally, Fairtrade was worth supporting.

Kojo and Paul challenged the audience to ensure that Fairtrade's share of the market continued to grow so that farmers and their families in the developing world would continue to reap the benefits.

After questions from the audience, discussions continued over Fairtrade wine and chocolate.