How Fair is Fair Trade?
We made a fire and I read the NY Times on line this morning, we got up so early it feels like it's already 2 pm but only 10:30. A story detailed the story behind a popular trend: Fair Trade products.
"Fair Trade labels don't list the amount paid to farmers; that sum requires research. The amount can vary depending on the commodity. An analysis using information from TransFair shows that cocoa farmers get 3 cents of the $3.49 spent on a 3.5-ounce chocolate bar labeled "organic fair trade" sold at Target. Farmers receive 24 cents for a one-pound bag of fair trade sugar sold at Whole Foods for $3.79.
The coffee farmer who produced the one-pound bag of coffee purchased by Mr. Terman received $1.26, higher than the commodity rate of $1.10. But whether Mr. Terman paid $10 or $6 for that fair trade coffee, the farmer gets the same $1.26.
"There is no reason why fair trade should cost astronomically more than traditional products," Nicole Chettero, a spokeswoman for TransFair USA, said. "We truly believe that the market will work itself out as Fair Trade certified products move from being a niche market to a mainstream option.
In Europe, where fair trade is more pervasive, some critics complain that retailers have taken advantage of consumers who are not price-sensitive. At one point, Britain's largest chain of coffee shops, Costa Coffee, added 18 cents to the price of a cup of cappuccino brewed from fair trade coffee. Yet the coffee cost the chain just one or two cents extra, according to research by Tim Harford, author of the book "The Undercover Economist." The chain has since reduced its price for the drink.
"Fair Trade labels don't list the amount paid to farmers; that sum requires research. The amount can vary depending on the commodity. An analysis using information from TransFair shows that cocoa farmers get 3 cents of the $3.49 spent on a 3.5-ounce chocolate bar labeled "organic fair trade" sold at Target. Farmers receive 24 cents for a one-pound bag of fair trade sugar sold at Whole Foods for $3.79.
The coffee farmer who produced the one-pound bag of coffee purchased by Mr. Terman received $1.26, higher than the commodity rate of $1.10. But whether Mr. Terman paid $10 or $6 for that fair trade coffee, the farmer gets the same $1.26.
"There is no reason why fair trade should cost astronomically more than traditional products," Nicole Chettero, a spokeswoman for TransFair USA, said. "We truly believe that the market will work itself out as Fair Trade certified products move from being a niche market to a mainstream option.
In Europe, where fair trade is more pervasive, some critics complain that retailers have taken advantage of consumers who are not price-sensitive. At one point, Britain's largest chain of coffee shops, Costa Coffee, added 18 cents to the price of a cup of cappuccino brewed from fair trade coffee. Yet the coffee cost the chain just one or two cents extra, according to research by Tim Harford, author of the book "The Undercover Economist." The chain has since reduced its price for the drink.
posted by Max Hartshorne at 10:56 AM
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