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Fair trade matters

Updated Friday, 31st March 2006

Fairtrade is an example of two broader, long-term trends: global governance and social enterprise.

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Who would have thought it – an edition of The Money Programme devoted to Fairtrade. It’s another sign that Fairtrade has come of age. It started in Oxfam shops and church halls 30 years ago. Last year 20% of coffee drunk in the UK was fairly traded.

And this is an international phenomenon. What is it about the Swiss and bananas? Apparently 47% of their bananas were sourced through Fairtrade. The fact that such figures are available – through IFAT – is another indicator of the scale and professionalism of these operations.

Fair trade products on sale in Oxfam Copyrighted  image Icon Copyright: net_efekt under CC-BY-NC-SA licence
Fair trade products on sale in Oxfam

But what’s the point?

How much help does this really provide to poor producers? Are the supermarkets taking advantage of a consumer fad, adding big mark-ups because a certain sort of soft-headed consumer doesn’t think things through? And isn’t Fairtrade still, if not a drop in the ocean of world trade, not much more than a bucketful?

Fair questions - and ones that Fairtrade activists have argued and agonised about more than most. They know the immediate benefits Fairtrade provides to producers – and that on their own such advances are not enough to ‘Make Poverty History’. They also appreciate the reasons why supermarkets may reasonably charge a higher mark-up on Fairtrade products. Clear arguments and explanations of their case are available on the Fairtrade Foundation’s website.

But perhaps arguments about mark-ups, and whether consumers really know what is happening, are failing to see the wood for the trees? They overlook the way Fairtrade is an example of two broader, long-term trends: global governance and social enterprise.

Fairtrade as global governance

The first big trend is global governance, and the part played by civil society organizations within that. This is not ‘world government’, focussed in a single remote institution, as people used to envision it. Governance is different – it is a distributed, multi-level, form of regulation that takes many forms, blending governmental, commercial and independent elements. Certification, of the sort provided by the Fairtrade Foundation, is one such form.

Global governance has grown dramatically over the last ten years, especially in relation to environmental issues (for example, the mark of the Forestry Stewardship Council) and labour practices in developing countries (for example, the SA 8000 standard of Social Accountability International). Simliar schemes are emerging in energy supply. These are usually the result of dialogue between NGOs (non-governmental organisations) and leading multi-national companies. However, governments can and do play an important role in the background, both in providing discreet support and as major purchasers – the UK’s Ethical Trading Initiative is a case in point.

Fairtrade as social enterprise

The second of these trends is the resurgence of social enterprise around the world. Within the UK the range and variety of products and services available from social enterprises is now so great that it is beginning to look like a parallel economy. It’s not just:

  • food
  • crafts
  • clothing

but:

  • banking
  • breakdown services
  • eco-tourism
  • green electricity
  • herbal remedies
  • polymer resins
  • professional services
  • telephone systems

There is a whole swathe of public service contractors from housing and regeneration through health and social care to juvenile offender management. And if you are really dying to be ethical...you can choose a green burial.

"If you think this is just beards and sandals...then you should get out more

Viewed in these terms, the Fairtrade Foundation is an international trading intermediary – just one of several, in fact – within a burgeoning alternative, value-based economy. This has been taking shape, almost under the radar of mainstream society, for at least thirty years. If you think this is just beards and sandals and idealistic amateurs, then you should get out more. Or at least visit some websites.

New economy – new brands

Describing things in this way means grouping together very different initiatives:

  • ‘green’ businesses
  • the trading arms of charities
  • co-operatives
  • community enterprises

Some are purists, holding to tightly defined principles – others are ‘pale green’ or just struggling to avoid the worst practices of their industries. Like any lively family, they squabble and compete for attention, complain about each other – but also know what they have in common.

That diversity is their strength. There isn’t just a single ‘party line’: you chose the one you most identify with. And identity is important nowadays: what sort of people we are or want to be, is no longer a given, as it used to be. We are back with brands: Fairtrade has become a strong brand. It expresses values, it makes a statement, it offers consistency – you can trust it. It is the archetypal brand of this new economy.

Its social change, Jim, but not as we knew it

What is interesting is the effect of these trends on the mainstream economy. The major retailers dare not ignore this shift in customer values – but by embracing it they also reinforce it.

"No political party can afford advertising on that scale"

Tesco’s website boasts that one third of Fairtrade sales in the UK are made through its supermarkets. And all those Fairtrade messages are scattered though their stores up and down the land, effectively challenging the acceptability of so many other products, along with the business processes and trade regimes that deliver them. No political party can afford advertising on that scale.

Big changes do not start with legislation – that happens towards the end of the process. Whether it is slavery or children being sent up chimneys, the change starts when these practices become controversial. The loss of social acceptability is the turning point.

Of course, the vested interests fight rear-guard actions. Think about tobacco companies and smoking; or the purveyors of junk food in the face of Jamie Oliver and Super-Size Me. But the more thoughtful in the business community, quite apart from the bright young things setting out on their careers, know better. Who wants to spend their life working in a dirty and declining industry? You either clean it up or get out.

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