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Fair Trade Found to Be Failing Farm Workers and the Poor

Fair trade doesn’t pretend that it is absolutely perfect. But just who is benefiting from its premiums?

by Mary Emily O'Hara
May 28 2014, 12:10pm

Photo via Trophygeek

A recently published four-year study suggests that many of the poorest workers in coffee and other farming industries are even worse off when employed by fair trade cooperatives.

The "Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda" study — which was published Sunday by University of London — focused on small farms in Uganda and Ethiopia and interviewed the lowest-wage freelance farm workers.

It found that even when fair trade premiums helped boost incomes for farm owners — ranging from small families to large plantation estates — the benefits failed to trickle down to workers that make up the majority of the industry’s labor force.

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In some cases, the study found, improvements to working conditions such as modern toilets were reserved only for senior managers, and money that cooperatives designated for schools for the children of workers went to build teacher’s housing instead.

At one school, the farm workers couldn’t afford the fees charged by the school they said was built by fair trade dollars.

Across the board, people hired to work on farms that sold fair trade products were paid less and treated worse.

“We pay extra for the premium which is supposed to support community projects,” said Christoper Cramer, study co-author and professor at University of London’s School of Oriental and African Studies (SOAS). “Often the literature says that premiums are fairly distributed in the community, but our evidence found that not to be true.”

Cramer told VICE News that there’s a misconception about “small holder” farms not using hired labor. Maybe that’s why the certification process for fair trade only has developed standards for permanent workers hired by either fair trade collectives or large-scale factory farms.

“Wage employment is far more important in small holder areas than has been acknowledged. It’s very pervasive,” Cramer said.

“People who depend on wage employment are the very poorest people,” said Cramer, “If your concern is with poverty reduction, this matters.”

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The reasons behind this uncomfortable aspect of agricultural industry are complex.

Harriet Lamb, the CEO of Fair Trade International, told VICE News that headlines following the study have been misleading.

“It’s a fair challenge to interview the temporary farm workers and say, here’s a group that’s left out,” Lamb told VICE News, “But it’s not fair to say fair trade isn’t helping farmers. That’s not true.”

To Lamb, the research on very poor casual farm workers is helpful, but it leaves out a big part of the picture: “Eighty percent of people we work with are small holder farmers, often very poor. In Ethipoia and Uganda, the average size of the small farms are about half or a quarter of a soccer field.”

“One farmer told me that for the first time he didn’t have to share his house with his cattle, he’d been able for the first time to build a separate little lean-to for his cows,” Lamb said of a visit to an Ethiopian fair trade farmer. “And his son was able to go to school for the first time.”

Does Fair Trade Really Help Farmers?
Consumers in the US, and other economically dominant countries, veer toward fair trade labels under the preconception that buying certified products will result in better conditions for long-exploited workers in the third world. The higher prices would seem to ensure that no child labor took place, that laborers were paid the set minimum wage for their country.

Everyone agrees that it’s fantastic when fair trade certification helps that one Ethiopian coffee grower get the cows out of his bedroom, but what happens if he uses the extra money to hire child labor and pay horribly insufficient wages?

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It’s unrealistic to expect the fair trade model to eradicate poverty. But what if it’s simply extending it by creating more exploitative bosses? After all, news articles from as far back as 2006 have reported on shitty conditions for plantation workers who had no idea they were helping to farm fair trade certified products.

The study seems to have captured the attention of the right people. Lamb told VICE News she welcomes the opportunity “to peel the next layer of the onion and look at those casual workers.”

“Fair Trade is a work in progress. We don’t claim for one minute that everything’s perfect, that we’ve solved all problems of injustice and poverty,” said Lamb. “We wish we had, but clearly it’s a long and difficult process. Poverty in trade is a big challenge that we seek solutions to.”

But not everyone thinks the study is helpful.

To Rodney North of US-based fair trade manufacturing cooperative Equal Exchange, the study “compares apples and oranges” and misses the point: “30 years ago Fair Trade was designed for a very specific purpose — to make the commodity markets work for small farmers who were working together in co-operatives.”

“It was to focus on farmers who, if they didn’t get the support, would lose their land and then be forced to work for wages for someone else,” North told VICE News.

Skipping Fair Trade All Together
Some coffee companies have chosen to sidestep fair trade certification entirely.

VICE News spoke with Matt Lounsbury at Portland, Oregon-based Stumptown, a growing name in premium coffee.

Stumptown buyers travel directly to coffee farms and develop long-term relationships with the farmers, a model referred to as Direct Trade.

“Fair trade just ensures that a price is paid for coffee. It doesn’t really ensure that price trickles down to the lowest wage picker on the farm,” Lounsbury said, “A lot of times we’ll build in specific premiums for the pickers. The benefits for us in that situation is that when the pickers are incentivized, you get a better quality of berry and a better coffee.”

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