Author Topic: ECONOMICS: Fair Trade Policy Does More Harm Than Good  (Read 1953 times)

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Offline bijou

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ECONOMICS: Fair Trade Policy Does More Harm Than Good
« on: February 23, 2008, 05:14:02 PM »
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...The Fairtrade Mark – familiar to anyone who shops in Britain's leading supermarkets – guarantees that producers in developing countries receive a fair price for their goods.

Last year, British consumers spent more than £300million on Fairtrade products.

But the report Unfair Trade claims that the organisation's "positive image appears to rely more on public relations than research".

It adds: * Fairtrade helps only a very small number of farmers while leaving the majority worse off. * It favours producers in better-off nations such as Mexico, rather than poor African countries. * It holds back economic development, paying inefficient cooperative farms and discouraging diversification and mechanisation. * Supermarket chains profit more from the higher price of Fairtrade goods than farmers. * Only a fifth of produce grown on Fairtrade-approved farms is actually purchased at its guaranteed fair price.

Tom Clougherty, policy director of the Adam Smith Institute, says: "At best, fair trade is a marketing device that does the poor little good.

"At worst, it may inadvertently be harming some of the planet's most vulnerable people."

Most damning of all, the report claims that Fairtrade is hurting the poorest group of all in the production process of its goods – the casual labourers hired by farmers to pick the bananas, coffee and cotton.

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http://www.dailymail.co.uk/pages/live/articles/news/worldnews.html?in_article_id=517823&in_page_id=1811



Offline bijou

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Re: ECONOMICS: Fair Trade Policy Does More Harm Than Good
« Reply #1 on: February 24, 2008, 03:03:18 AM »
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Halo of Fairtrade casts a shadow on poverty
Last Updated: 12:01am GMT 24/02/2008



"Fairtrade purports to work within the market economy but its rise has been largely based on marketing subsidies and public-sector procurement," says Tom Clougherty, the policy director of the Adam Smith Institute.


Fairtrade fails to tackle poverty, report says

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Despite huge pressures on the public purse, local councils are squandering large sums to become Fairtrade towns and cities, to hector people into buying only Fairtrade. Meanwhile, the Fairtrade Foundation has received £1.5 million from the Department for International Development. This week sees the start of Fairtrade Fortnight, when charities, politicians and teachers will promote the scheme as an undisputed good. With all this effort, what a pity Fairtrade does not work.

Fairtrade's supporters blame the plight of coffee farmers on world prices and ruthless multinationals. But supporters ignore the real causes of poverty among growers. Farmers I interviewed in Kenya told me that the problems they faced were caused by their own government's interference. They have to use milling companies granted regional monopolies, which fleece them. They want to boost productivity by using fertiliser but cannot afford the prices demanded by the fertiliser monopoly. Imported tools would transform their output but are subject to punitive tariffs.

Brazil, conversely, pursued free-market reform and the farmers have mechanised. That has enabled five people and a machine to enjoy the same output as 500 unaided farmers.

Yet the Fairtrade Foundation, the lobby group behind the scheme in Britain, seems oblivious and admits it has no programmes to encourage the use of technology. Even worse, it is giving counterproductive advice to farmers, encouraging them to mix crops in the same field, thereby cutting productivity and making mechanisation more difficult.

 
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http://www.telegraph.co.uk/earth/main.jhtml?xml=/earth/2008/02/24/scifair224.xml



Offline SSG Snuggle Bunny

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Re: ECONOMICS: Fair Trade Policy Does More Harm Than Good
« Reply #2 on: February 24, 2008, 08:13:39 AM »
Very excellent finds, Bijou. Thank-you.
According to the Bible, "know" means "yes."