Boycott Burundi

Maybe so. But somebody’s got to show that we care about sustainable development. At least by drinking fair trade coffee we’ll be doing something, and showing that our hearts are in the right place.

Or so goes the logic of proponents of fair trade products, not just coffee – the first and best-known of the fair trade commodities – but also Third World commodities that compete with those grown in the West, such as oranges and, increasingly, manufactured goods such as clothing, textiles and soccer balls.

The fair trade movement – designed to give Third World farmers a living wage while also protecting the environment – started with the best of intentions; it is now paving the road to hell. Although it purports to be a consumer-driven movement that promotes trade over aid, it is funded by government foreign aid agencies and trade unions bent on keeping Third World goods out of Western markets. Although it claims to have the small farmers’ interest at heart, it acts as a gatekeeper that excludes small farmers from the fair trade club to ensure the movement’s own self-preservation.

In Papua New Guinea, for example, small farmers eagerly joined the fair trade movement’s forerunner, the organic coffee movement, when it first began, because the farmers’ organic beans, after they were certified, fetched a better price. When the fair trade movement piggy-backed on the organic movement, many small farmers also sought fair trade certification.

The fair trade coffee market, which requires that farmers be paid an arbitrary US$1.26 a pound or more for their beans, couldn’t absorb the coffee these farmers could produce. To ration the amount of sustainable coffee entering the market, the fair traders set up a quota system for existing producers and set high certification costs to keep new small farmers, particularly the poorest ones, out of the fair trade business. Now, even certified fair trade coffee producers sell most of their coffee at the lower free market rates – less than 20% of the world’s fair trade crop fetches the fair trade premium.

The fair traders all but ignored African coffee farmers, leaving them out of the certification business. The reason? Virtually all African coffee farmers meet the fair trade criteria by default. They all operate on a small scale, as required, and they don’t overuse chemicals. In fact, because they are so poor, African farmers use fewer chemicals than many certified fair trade producers elsewhere. Had the fair traders simply let the Burundi small farmers into the fair trade marketplace, the administrators running the fair trade industry could have been ruined. Flooding the fair trade market with honest-to-goodness small-farmer-produced Burundi beans would have cost the existing fair trade coffee producers market share, and made them wonder why they paid the fair trade movement millions of dollars in certification fees, let alone jumped through hoops to meet the certification procedures.

As it is, many question the benefits of certification, noting that it heaps needless bureaucratic burdens on simple farmers, along with often crushing fees. These fees – structured to be utterly unaffordable for a poor farmer tilling a small acreage – often force small farmers out of their traditional farming practices and into the novel working relationships that fair trade advocates favour, such as worker co-operatives and other communal or unionized systems recognized by the International Labour Organization. Fair trade advocates have also raised public concerns about secrecy and conflicts of interest among fair traders themselves, who strike some as being hypocrites for criticizing the private sector for murky business dealings. "Questions have been raised about the same umbrella organizations being responsible for Fair Trade standards-setting, auditing and producer support," a fair trade conference was told by an advocate for greater transparency and a separation of roles. "Fair trade sympathizers . . . have expressed frustration with fair trade, which at times may appear like a secret society with links between various organizations. For example, in fair trade bananas, one of the producer organizations is partly owned by an NGO in the Netherlands, which also owns shares in an importer and has close links with Max Havelaar – the Fair Trade monitor – which it was involved in establishing."

Conflicts of interests aside, in the end the fair trade bureaucrats are often the only obvious winners. Their certification system involves consultants and auditors from the point at which the coffee is picked, through to the international distribution channels and into Western countries, where national fair trade organizations pick up the duty by monitoring retailers and others doing business within a country’s borders. In Canada, the organization in charge of overseeing certification is TransFair Canada, a non-profit organization.

"The Transfair Canada Fair Frade Certified Logo guarantees consumers that their coffee, tea, cocoa and sugar originates from FLO [Fairtrade Labeling Organization International] monitored producers in Latin America, Africa and Asia," it states. The "guarantee," in fact, more resembles a consumer hoax. The monitoring it performs – brief inspections by "fair-trade monitors" on prearranged dates – amount to little more than a public relations exercise. As its last audited financial statements attest, in fact, Transfair Canada’s annual budget for monitoring was a mere $5,800, even though it received more than $140,000 from licensees expecting to be monitored, and $93,000 in grants, mostly from unions and the Canadian International Development Agency, a federal government foreign aid agency. Most of TransFair Canada’s real money was spent on its own staff and "marketing and promotion" that touts the importance of rigourous monitoring. Less than one half of one percent of its annual revenues comes from the consumers it claims to serve.

No grounds for celebration on this Fair Trade Day.