By Douglas Alexander
Fair trade is fundamental to a fair world, a vital route out of poverty for millions of people across the globe. Today (Mon 23) marks the start of Fairtrade Fortnight. It is a reminder that our shopping habits can make a difference, by helping people in the developing world get a fair deal for their products.
Fair trade promotes better prices, decent working conditions, local sustainability, and fair terms of trade for farmers and workers in the developing world. By requiring companies to pay sustainable prices (which must never fall lower than the market price), fair trade enables the poorest, weakest producers to improve their position and have more control over their lives.
Shoppers and businesses across Britain have embraced Fairtrade. Despite the downturn, figures for last year show that the number of households buying Fairtrade foods grew by 1.3 million. More than 70% of UK households are now buying Fairtrade. People are also buying Fairtrade products more often - the average number of shopping trips increased last year as well.
More than 1 in 4 bananas eaten in the UK are now Fairtrade, and more than 1 in 10 cups of coffee and tea drunk are Fairtrade. Over 4,000 products carry the Fairtrade Mark, an independent consumer label which appears on UK products as a guarantee that they have been certified against internationally agreed Fairtrade standards.
But why does this matter? Last year, the rise in food prices pushed as many as 100 million people into extreme poverty. The World Bank estimates that as many as 80 million more people a year, for the next two years, could be forced to live in extreme poverty as a result of the economic downturn.
For these people, having to pay a little more for food means a choice between feeding themselves or feeding their children. They may have no safe water to drink, no schooling and no healthcare. In their world, children die from something as easy to cure as diarrhoea.
Labour has invested almost £12 million in fair and ethical trade initiatives, and we have tripled international aid as a whole since 1997. We are doubling our funding for the expansion of Fairtrade labelling across Europe. By 2010, Labour will have raised the UK’s investment to help poor countries trade to over £400 million a year.
Churches have played an important role in helping to establish Fairtrade in the UK. This year will see more than 5,000 ‘Fairtrade Churches’ promoting Fairtrade in their community through worship, coffee mornings and local events.
As the recent global financial crisis shows, we are now much closer to people around the world than we ever have been. Many of the problems created or made worse by poverty – war and conflict, international crime, the trade in illegal drugs and the spread of diseases like AIDS – affect all of us.
If we do not tackle global poverty, we risk storing up problems for the world’s future. Yet Fairtrade is an example of how we can, through the daily choices we make, help to build a safer, more sustainable and more prosperous world. Fairtrade is today helping to safeguard the futures of over seven million farmers, workers and families in developing countries.
Families across Britain will rightly be taking care over their shopping bills this year. During this Fairtrade Fortnight I would encourage shoppers to also consider the power they have to play a part in changing lives for the better – there has never been a more important time to do so.
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When he says 'better prices' what is he talking about? Lower prices? Higher prices? Lower consumer prices with a subsidy to pay more to producers?
Perhaps Douglas would like to ask his army of clerks in DFID what impacts 'Fair Trade' schemes have on those outside the scheme - and come back with a contribution.
MD
I agree, trade is the vital means for these countries to get their people out of poverty.
However, what are the government doing to create a fair market? EU CAP is a market distortion that puts quotas on these countries selling their products and import tariffs prohibiting them selling them at a fair price.
To make matters worse, thanks the CAP quota system, food, good sustainable food is either destroyed, turned to animal feed or perhaps worse, dumped onto third world markets at very low prices destroying these indigenous farmers and producers.
That is simply immoral.
Labour has done nothing to reform CAP, in fact, it 'negotiated' to give more money in contributions to reinvigorate this crazy scheme and heap more misery on the world's poorest.
So in reality, isn't fairtrade an incremental cost on the failure of government and EU policy?
Us consumers are paying three times.
Once for the actual goods at an inflated prices by tariffs and 'Fairtrade'.
Once for CAP through our taxes.
Once in international development through our taxes.
Surely a better approach would be bring down the trade barriers, free trade wouldn't cost us anything at all and actually create a fairer market for these people to trade their way out of poverty.
This is where the real fixed-market comes into it. Shame on France.
The law of demand says: "More will be demanded from the market at a lower price than a higher price."
The law of supply says: "More will be supplied to the market at a higher price than a lower price."
So how does hiking the price by adding a tariff encourage demand? It also stifles supply because more would be demanded at the lower price (the supply stifled because the tariff is a 'production theft').
So how to create demand despite the tariff - by adding an 'ethically sound' device like Fairtrade perhaps and guilting people into it? A bit of value-add?
How about something really radical, get our producers to make things they are good at, open trade with their third world competitors and let the market find it's true equilibrium. Let it decide who makes the best coffee, produces the best bananas, sugar, etc, etc, etc.....
It's called competitive advantage, some countries are better at doing some things than others. However, if you cannot let this develop, how are these countries going to start to prosper?
The Third World is not a plaything to be preserved in aspic for pet projects by well meaning government to patronise.
Pay and conditions tourism? Well when you earn a day (like many third-world farm workers do) I can see how people would be queuing up to work there.
As for 'smart development', this is not a silly computer game. Economies develop along the lines of Agriculture, Industrialisation, Knowledge economy.
When a country can't even develop its agriculture to trade, what chance for the 'smart development'?
Square-root of zero I reckon. Also, if they have no foreign earnings from exports - how do they pay for 'new products' or the plant to make them?
As for Blair and Chirac. Yes, lots of tough talking soundbites, but a deal was struck and no veto (which Blair could have used) was deployed.
Well done everyone. Millions continue to die.
But at least 'Fairtrade' salves the conscience.
Speaking as a game developer, I can understand your comment about "silly games" but, like Fairtrade, this is only a surface perspective. Game theory encompasses everything and is as serious as a heart attack. Indeed, better design and marketing principles are perspectives on this, and designing a better game (or system) can assist individuals and communities develop shared capital.
Fairtrade is just another brand that keeps the leadership and access to markets to itself. One parallel might be, say, a game publisher who always promote their own branding and control the purse strings. While the publishers "ecosystem" develops it can create some wealth but may be monopolistic and fragile.
How is it going to actually expose the real issue? How is it fair to expect consumers to pay more for something that they could actually buy more of for less if the tariffs were dropped.
This isn't a victimless good cause either. The tariff prevents more being bought and therefore more being supplied, if more isn't supplied, more jobs in that country are not created, wealth isn't created, food isn't bought, medicines can't be bought, more aid is required, people die.
Hiking the price up for 'Fairtrade' in this price conscience age isn't going to do wonders for demand either.
And that's the problem. It's a sticking plaster over the bigger issue that the Labour has it's fingers in its ears shouting 'la-la-la-la' hoping it goes away.
Bring down the trade barriers.
Also a social brand is counter-productive....
Now, imagine, a coffee producer in say Bolivia, makes one of the finest coffees in the world, it's economy is progressing through proper and sound administration.
Now, they don't want to be a Fairtrade coffee, they are happy with their branding, the economy provides all the social goods that Fairtrade does.
So instead, they are not stocked in the supermarket because they aren't Fairtrade or shunned by the 'ethical' shopper that has some money in their pocket.
How does that improve things for the coffee producer in Bolivia?
It doesn't. In fact if it harmed their sales; they'd end up sacking staff.
Fairtrade is just another market distortion.
Why not offer shoppers and third world a good deal and just drop the tariffs? Isn't that a winner all round?
I don't think that the argument for a bandage is a decent argument against a sticking plaster, though...
(I hope this doesn't cause you to re-evaluate your position).
Probably for the swear?
I'm not bugged about it. The generic issue of leadership and markets applies whether you're talking about comments and moderation, or companies and nation states. Wherever you go, there you are.