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Journal of Business Ethics

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01-02-2012

Ethical Objections to Fairtrade

Author: Peter Griffiths

Published in: Journal of Business Ethics | Issue 3/2012

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Abstract

The Fairtrade movement is a group of businesses claiming to trade ethically. The claims are evaluated, under a range of criteria derived from the Utilitarian ethic. Firstly, if aid or charity money is diverted from the very poorest people to the quite poor, or the rich, there is an increase in death and destitution. It is shown that little of the extra paid by consumers for Fairtrade reaches farmers, sometimes none. It cannot be shown that it has a positive impact on Fairtrade farmers in general, but evidence suggesting it harms others is presented. Many of the weaknesses are due to an attempt to impose political views on farmers and others. Secondly, the unfair trading criteria require that sellers do not lie about their product, nor withhold information that might alter the decisions of a substantial proportion of buyers. It is argued that the system only can exist because of the failure of the Fairtrade industry to give the facts on what happens to the money and what it can be proved it achieves. This unfair trading compromises the reputation of charities in general. Much of the trading may constitute the criminal offence of Unfair Trading in the EU.

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One UK Sainsbury superstore, in November 2010, had 76 product lines for coffee and 53 product lines for Fairtrade coffee. The most expensive coffee was nearly four times the price of the cheapest, £21.20 per kg, compared with £5.36. Many of the more expensive lines were Fairtrade. Some of the objective characteristics were stated, such as organic, Arabica, produced in Costa Rica, but there was no indication of most of them. Most of them would have been blends of at least half a dozen different qualities and different growths, produced by different suppliers.

One web page says that farmers ‘are often forced to sell to middlemen who pay them half the market price, generally between 30-50c per pound. Fairtrade coffee sells for a minimum of $1.26 per pound.’ (Organic Consumers Association 2007) This comparison is flagrantly dishonest. The Fairtrade price quoted here is the New York price. The other price is the price paid in a village in the middle of Africa. Both the independent middlemen and the Fairtrade middlemen have to pay the costs of assembly, processing, marketing and transport, as well as the export tax, so both pay the farmer much less than the New York price.

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Title: Ethical Objections to Fairtrade
Author: Peter Griffiths
Publication date: 01-02-2012
Publisher: Springer Netherlands
Published in: Journal of Business Ethics / Issue 3/2012
Print ISSN: 0167-4544
Electronic ISSN: 1573-0697
DOI: https://doi.org/10.1007/s10551-011-0972-0

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