Fair Trade: Does it Work

by on May 5, 2008 · 6 comments

This analysis from IPA in Australia suggests not.


This analysis draws on two recent studies of fair trade to conclude that is it just not what it is cracked up to be. One example of the studies findings:

from the US-based Transfair, fair trade advocates conceded that fair trade producers provided lower grade coffee for sale through the fair trade system. Fair trade producers sell their best coffee on the free market when it commands a higher speciality price than fair trade. Producers then keep their lower-grade quality through the fair trade system where they receive a guaranteed price. They do this because there is an oversupply of fair trade coffee and an undersupply of buyers for fair trade coffee.

The IPA analysis concludes, that “new studies demonstrate that the evidence supporting fair trade’s contribution to development for the world’s poor is dubious, at best. The studies also show that fair trade creates a number of problems for fair trade and non-fair trade producers.”





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