IS FAIR TRADE GOOD OR BAD FOR DEVELOPING NATIONS?
Fair Trade and its impact on impoverished nations.
By Edwin C. Mercurio
“When I give food to the poor, they call me a saint.When I ask why the poor have no food, they call me a communist.” Dom Helder Camara
Fair trade advocates told a European Union Conference that fair trade works. “It works for the poor people; it works for consumers. It works as a business model; it works as sustainable development; it works to protect the environment; it works as an idea." reports the Fair Trade Advocacy Newsletter.
But there is growing concern about the theory and practice of the Fair Trade movement. Despite its anti-capitalist rhetoric, it is seen as a revised form of free trade controlled by the G8 and economically dominant countries,which are continually held responsible for global trade injustices.
Fair trade is often presented as a fair way to help banana growers. However, the dominance of corporate power - Del Monte, Chiquita and Dole - leaves poorer farmers and nations with an uncertain future and destroyed ecosystems. Their dominance is built on the exploitation of lands and workers from developing countries.
There are indications that fair trade is used as a cover by transnational corporations to expand their corporate interest. Even more disturbing, according to Matthias Schmeizer of Institute Fusoziale Dreigliederung, is how Nestle (known as 2005’s “least responsible company” worldwide and one of the four big coffee roasters responsible for the coffee crisis which impoverished millions of producers) prides itself of launching a “Fair Trade” brand in Britain.
Consumers are willing to pay more for goods produced in a fair and less exploitative manner. However, questions remain about fair trade and the observance of fair labour practices.
In 2006, British consumers spent more than £290 million (approximately $450 million Canadian) on Fair Trade goods as sales (bearing the distinctive green, black and blue logo) continue to soar.
A report published by Adam Smith Institute claims that “Fair Trade”methods actually sustain uncompetitive farming practices rather than encourage the development of modern techniques or industrialization. In addition, payment structures put in place by the Fair-trade Foundation “unintentionally encourage farms in developing countries to take on labourers only during harvest time.” Seasonal sugar plantation workers in Asia are the most exploited. They toil under harsh labour conditions with low wages, no medical benefits and housed in crowded and filthy living quarters.
As consumer demands grow, ecological balance and food crops for the world’s poor in underdeveloped countries are depleted and replaced by the Fair Trade goods demanded by Western and European consumers. The environmental impact of planting a single crop such as coffee, corn, papaya, cacao, banana and sugarcane on wide swaths of land is economically and environmentally disastrous as well as unsustainable. Any collapse of this “mono-crop” farming method due to overproduction, weather disruptions and pest infestations will bring untold misery to producers and farmers.
One of the worst cultural victims of fair trade are the indigenous peoples. Many cultural heritage and heirlooms of various indigenous peoples around the world are in danger of extinction. Traditional artifacts, musical instruments and ornaments made by tribal peoples from the rainforests for spiritual and cultural ceremonies and rituals are mass produced and converted into commercial items for profit by “Fair Trade” shops in Europe and North America.
Fair Trade aims to help some farmers and producers. In some cases, however, it prevents third world peoples from liberating themselves from the bondage of poverty, dependence, underdevelopment and transnational companies’ exploitation of human and natural resources.