Fair Trade and Development

Fair Trade is where companies and consumers pay more than the free-market rate for products to ensure that workers receive a decent wage for their products.

Typically this involves consumers in developed countries paying a higher price for agricultural products such as coffee, chocolate and bananas to the workers in developing countries.

The Fair Trade Foundation monitors the production of Fair Trade products, and to qualify for the Fair Trade label workers need to work for a company which ensures several conditions are met including:

  • Workers have decent (safe) working conditions.
  • Workers have the right to join a union and have a say in the process of production.
  • Workers receive a wage that is sufficient to give them a decent quality of life in their country – this usually means enough to pay for the basics and some left over to pay for education for their children, for example.
  • Production is sustainable and not harming the environment

The idea behind Fair Trade is that when workers have decent working conditions and receive enough money to ‘improve’ their lives, this means that trade can work effectively for development.

Fair Trade is very much in line with the principles of People Centred Development.

The Benefits of Fair Trade

The Fair Trade foundation says that 1.6 million farmers across the world are currently benefitting from Fair Trade and there are many, many examples of how Fair Trade is benefitting grass roots farmers in many developing countries.

Fair Trade Coffee…

Coffee is by far the largest Fair Trade export – the video below looks at an example of what I like to think of as ‘extreme Fair Trade’:

It outlines how Fair Trade Coffee importers in Europe work directly with coffee producers in Rwanda, focusing on empowering women into management positions especially.

And they export the coffee on a sailboat, meaning this is zero emission coffee, using a company called Timbercoast.

Fair Trade Cocoa and Chocolate…

Ivory Coast is the world’s largest cocoa exporter, most of it not Fair Trade, but the video below looks at how Fair Trade cocoa works in the country…

Fair Trade Cotton….

The video below outlines the story of Fair Trade Cotton

How Fair Trade can promote development

The main idea behind fair trade is that workers get paid enough to promote social development. The extra money they receive can be used to send their children to school, for example.

Fair Trade does not allow child labour, meaning children should be free to go to school and get an education.

Women and men are treated equally in fair trade projects, so working with fair trade can empower women and tackle traditions of gender inequality.

Finally the sustainability requirements of fair trade means that the process of production won’t undermine the local environment in the long term, promoting sustainable development.

If you’d like to read more about the general advantages of Fair Trade then this is a decent article:10 Ways Fair Trade Helps Advance the Millennium Development Goals

Criticisms and Limitations of Fair Trade as a Strategy for Development

  • The Fair Trade Price Guarantee is a minimum income guarantee – if the market price of, for example, coffee, increases and so the price of the finished coffee increases, there is no guarantee that the workers will receive the higher price.
  • It follows that workers working in regular non fair trade organisations might be better off if there are price spikes in the product they produce.
  • Guaranteeing a minimum income may in fact keep workers trapped in primary product production and discourage them from diversifying into more profitable areas.
  • In the grand scheme of things 1.66 million workers is NOT that many workers – there are BILLIONS of workers in developing countries, even if 10 million workers were benefitting from Fair Trade, that would be less than 1% of the workforce in the developing world!

If you’d like to read more, you might like this article from The Guardian (2017): Fair Trade only Really Benefits Supermarkets.

Relevance to A-level sociology

Fair Trade is an alternative fo Free Trade and is a response to the many criticisms of how trade does not work for development.

What is the Sociological Imagination?

A brief summary of, and elaboration on Anthony Giddens’ take on what the sociological imagination involves… 

Learning to think sociologically means cultivating the sociological imagination.  Studying sociology cannot be just a routine process of acquiring knowledge.  A sociologist is someone who is able to break free from the immediacy of personal circumstances and put things in a wider context.  Sociological work depends on what the American author C. Wright Mills, in a famous phrase, called the sociological imagination (Mills 1970).

The sociological imagination requires us, above all, to ‘think ourselves away’ from the familiar routines of our daily lives in order to look at them anew.  The best way to illustrate what this involves is take a simple act which millions of people do every day, such as drinking a cup of coffee. A sociological investigation of coffee reveals that there are many social processes associated with the act.

First, coffee is not just a refreshing drink but it has symbolic value as part of our day to day social activities. Often the rituals associated with coffee drinking are more important than consuming the drink itself. For example, the morning cup of coffee is, for many people, the central part of their morning routine, an essential part of starting the day, while ‘meeting someone for coffee’ is typically not just about drinking coffee, but forms the basis for socialising and social interaction, which offer a rich vein of subject matter for sociologists to investigate.

Second, coffee contains caffeine, a drug which stimulates certain parts of the brain. As such, people drink coffee to aid concentration, or simply ‘give them a lift’. Coffee is a habit-forming substance, and such many people feel as if they cannot get through a typical day without their daily coffee injections. Coffee, like alcohol in the United Kingdom, is a legal drug, and yet other mind-altering drugs such as cannabis and cocaine are illegal. Other societies have different rules pertaining to mind altering, addictive drugs – and the question of why such rules come about and why they differ from culture to culture is of interest to sociologists.

Third, when we drink a cup of coffee, we are caught up in a complex set of global social and economic interactions which link us to millions of other people in other countries. There is a huge global production chain associated with coffee – it is grown in Asia, Africa and Latin America, typically by quite poor farmers, then bought in bulk by local distributors, and then typically shipped to Europe where it is roasted and ground, and also packaged and branded. If you add on the processes which go in a coffee shop, there are 6 chains from coffee farmer to consumer.

Fourth – historically, the production and consumption of coffee is tied up with the history of colonialism – a period in which European powers invaded Asia, Africa and Latin America and set up colonies which specialised in particular crops (such as tea, coffee, sugar and bananas) for export back to the ‘mother countries’ – the fact that coffee is grown in huge quantities in countries such as Colombia and Indonesia is a legacy of the colonial era.

Fifth – drinking coffee ties us into relations with some of the world’s largest Corporations – such as Nestle and Starbucks – many of these corporations have been accused of exploiting coffee pickers by paying very little for the coffee they buy in order to maximise their profits, thus ‘coffee as usual’ perpetuates global capitalism. Of course, there is now ‘fair trade coffee’, so purchasing coffee involves making ethical choices about whether you go for the cheapest cup or pay extra to give the farmers a chance of a decent wage.

Sixth – there have been recent concerns about the environmental impact of growing coffee – when any product is ‘factory farmed’, it depletes the soil and reduces biodiversity in a local area – not to mention to pollution associated with shipping the product several thousand miles around the globe.

Try cultivating your own sociological imagination: 

Take any product and ask yourself the following in relation to it:

  1. What social rituals are associated with consuming the product?
  2. What norms and rules exist which limit the use of the product or similar product?
  3. How does the product connect you to global economic and social processes?
  4. What is the history of the product?
  5. What Corporations are typically involved in the manufacture and distribution of the product. Are there any ethical concerns about the companies involved, are there any ethical alternatives?
  6. Does the use of the product harm the environment?

Products this might work well with:

  • Footwear – flip flops, trainers, high-heels. 
  • Mobile phones.
  • Chocolate.

Sources use to write this post

Giddens and Sutton (2017) Sociology