John Madeley
Trade: time to think the unthinkable?
The Reading Branch of the United Nations Association,
21st January 2004
In November last year, a news item was seen on the internet - “Dividend boost
for coffee growers”. After several years of prices so low that most coffee
growers could not cover their cost of production, there was at last a break. The
Co-op has decided to use only fair-trade coffee in its own-label products. The
switch would mean an extra £750,000 a year for growers, it said.
But the stunner came in the last sentence. “A Co-op brand of instant coffee will
sell for £1.39 a jar compared to £1.63 for the equivalent from Nescafe”, it
read.
It was one of those of first-man-on-the-moon Neil Armstrong moments - one small
step for fair-trade, one giant leap for the fair-trade system.
For some 40 years now the fair-trade system has bumped steadily along, its
products often costing more but purchased avidly by those who could afford them.
It was worth the extra, they believed, because the grower received a decent
return - in the case of coffee the fair-trade price is currently twice the price
that applies in the mainstream market.
Now, for the first time, a widely-used product will be on sale in supermarkets
for less than traditional brands. A fair-trade product not only gives the grower
a fairer return, it now gives the shopper a lower price. It’s the product for
those who buy on price. A huge breakthrough.
This boost for the fair-trade, alternative trade system, comes at a time when
the mainstream trading system is in deep mire. At the World Trade Organisation
ministerial meeting in Doha in 2001, the WTO’s member countries launched the
Doha development agenda. This is supposed to give developing countries a better
deal in world trade, especially in agriculture.
Developing country agriculture, vital for food security, rural livelihoods and
poverty reduction, is being crippled by the dumping of surplus cereals, sugar,
dairy produce and other foods from Western countries, surpluses caused by their
huge farm subsidies. Millions have lost their livelihoods because of this
dumping.
But, since 2001, the United States and the European Union have shown contempt
for the Doha agenda. Despite fierce campaigning and the solid arguments of
concerned NGOs, the United States introduced a new Farm Bill in 2002 and the EU
made sham reforms in the Common Agriculture Policy this June, both of which
could make dumping worse.
At the last WTO ministerial in Cancun, the US and EU showed no signs of
listening to the concerns of the poor. The injustice goes on, with the
mainstream trading system continuing to benefit the rich, while maintaining the
poor in poverty.
Is it time to think the unthinkable? Could the fair-trade system replace the
mainstream system? Until recently, fair-trade seemed like a niche market -
helping a few people, a symbol of what trade could be like, but no more. This is
now changing. The stranglehold that the US and EU are exercising on changes in
the mainstream system moves the alternative to centre-stage.
“I have seen dozens of fair-trade projects at work in the South, and in every
single one of them the benefits were not in question, merely why there wasn’t
more of it and what could be done to make it bigger. Though fair-trade may be an
infant among giants, the future lies with the infant, not the giant”, writes
David Ranson, co-editor of “New Internationalist”, in a book “The No-Nonsense
Guide to fair-trade”.
“Fair-trade is the food of the future”, says Harriet Lamb, director of the
Fairtrade Foundation which awards the Fairtrade Mark to products that satisfy
fair-trade criteria; ‘’arguments that fair-trade can never be more than a niche
market have been disproved”.
To qualify for the Fairtrade Mark, producer groups have to be organised
co-operatively and democratically. Fairtrade Mark foods are now sold in 17
countries through 235 traders and 452 companies, and sourced from 360 producer
groups in 36 countries, representing 4.5 million growers and their families.
Sales of Fairtrade Mark products in the UK rose from £53 million in 2001 to £63
million in 2002 and are set to reach £90 million in 2003. UK shoppers are now
spending almost £3 a second on fair-trade products. Fair-trade coffee alone has
over 5 per cent of the UK market and almost a million coffee growers are
benefiting.
For the fair-trade system to replace the mainstream system, it has to go beyond
food and beverages to embrace a much wider range of products. The signs are
encouraging. Fairtrade mark footballs are available, cut flowers may get the
mark in the first half of 2004. Fair-trade
household
goods,
furniture, carpets and clothes are now available.
The infant is growing up fast. And the public wants more of these goods. Recent
surveys suggest the majority of people in the UK would prefer to buy Fairtrade
Mark products.
The infant offers a real alternative to the mainstream trading system where
transnational corporations do most of the trading. A number of NGOs are
campaigning for controls on TNCs. The fair-trade system means moving the ball
away from unaccountable corporations, and giving it instead to democratically
organised producer groups.
In 2000, world leaders agreed a number of millennium development goals - on
poverty reduction and issues such as education, literacy, health and child
mortality. One of the aims is to halve, by 2015, the proportion of people living
on less than a dollar a day.
The mainstream trading system is failing to make a contribution to these
millennium goals. On the other hand, every time a shopper buys a fair-trade
product, she or he is helping in a tiny way to improve someone’s well-being.
The infant looks a great deal healthier than the parent. The poor cannot wait
for crumbs from the tables of the EU and the US. And while the environmental
cost of trade is likely to be increasingly questioned, due to the vast amounts
of fuel needed for flying goods around the world, more of the goods that are
traded could be fairly traded.