Don't buy Fair Trade its not Fair

Winty · 26-03-2010 05:50PM #1

Everywhere you look you now see “Fair Trade” coffee, chocolate, fruit they even sell Fair Trade in Leinster House as the only available coffee.

The liberal amongst us say that we should always look for the Fair Trade logo as it helps poor farmers in poor countries; well that’s wrong and I will prove why.

Picture the scene

Two small islands in the Caribbean ocean with one farmer on each island growing Bananas.

Each box of Bananas is sold to an agent for $100 a box.
The agent then sells to Tesco.

Each farmer has a small income but his children have food and can go to school, they are not rich but they survive.

Irish people start asking Tesco for Fair Trade Bananas, Tesco think great we can get a bit of extra cash for the 20% of people who want to pay a bit more.
Tesco calls fair trade and they put him in contact with the agent in the Caribbean.

The agent goes to 1 of the farmers and gets him signed up to the Fair Trade Scheme; he is over the moon because he now gets paid $110 per box. With the extra money he is not rich but only a tiny bit better off.

Meanwhile Tesco don’t need as many “normal” bananas in its shops in Ireland because 20% of the customers want the “Fair Trade” one.

Now farmer number 2 who is not in the “Fair Trade” scheme has seen his money fall to $80 per box. He is really in trouble and with the drop in money needs the kids to stay and home and work and not go to school.

So at the start both farmers were making a small amount of money but they were surviving. Now one is a tidy bit better of, where the other is now living on the edge.

Is “Fair Trade” Fair.

minidazzler · 26-03-2010 05:55PM

If it wasn't made by vietnamese children in sweatshops, I'm not gonna wear it, simple as.

ScumLord · 26-03-2010 05:55PM

Where is the man from Del Monte when you need him? I think Tescos killed him and evil rained over the land.

nucking futs · 26-03-2010 05:56PM

Are there any facts behind that or is it just a theory?

elgriff · 26-03-2010 05:57PM

Why is farmer one only earning 10% more, i presume its because you allowed a cut for the agent. You did however forget to mention that as well as farmer 1s prices going up, so is the amount of boxes he sells. so for farmer 1, he sells 20% more than before at 10% higher the price. I think that is worth mentioning. I also think you have simplified it way too much.

ToniTuddle · 26-03-2010 05:57PM

Fair Trade is too expensive for a young student like myself!

Aldi for meeeeeee

Helix · 26-03-2010 05:58PM

minidazzler wrote: »

If it wasn't made by vietnamese children in sweatshops, I'm not gonna wear it, simple as.

exactly

vietnamese children need work too

easyeason3 · 26-03-2010 05:59PM

If all the worlds problems were fixed then you would have nothing to complain about.
So not only is Tesco allegedly making more profit but they are also providing you with a story to start a thread on for a whinge.

orourkeda · 26-03-2010 05:59PM

minidazzler wrote: »

If it wasn't made by vietnamese children in sweatshops, I'm not gonna wear it, simple as.

couldnt agree more. if its good enough for Tiger Woods its good enough for me

admiralofthefleet · 26-03-2010 06:00PM

the price of the stuff isnt 'fair'

Winty · 26-03-2010 06:00PM

nucking futs wrote: »

Are there any facts behind that or is it just a theory?

This is my simple theory, I will work more on the fine details but its based on facts I have read.

Alot of people in the industry see Fair Trade as a joke

Winty · 26-03-2010 06:01PM

easyeason3 wrote: »

a story to start a thread on for a whinge.

Not a whinge, an open forum

nucking futs · 26-03-2010 06:03PM

Winty wrote: »

This is my simple theory, I will work more on the fine details but its based on facts I have read.

Alot of people in the industry see Fair Trade as a joke

Does not compute. If it's based on facts then it isn't a theory.

Winty · 26-03-2010 06:05PM

nucking futs wrote: »

Does not compute. If it's based on facts then it isn't a theory.

The 2 islands may not be real, so some is theory, but the fact that some win and some loose is true, ask anyone

CreepingDeath · 26-03-2010 06:05PM

If we raise the third world countries out of poverty, they're only going to turn around and compete with us with the advantage of lower wage levels.

Look at India, how many call centres and software development jobs have been lost to there ?

easyeason3 · 26-03-2010 06:05PM

Winty wrote: »

Not a whinge, an open forum

Ah go on you whingebag

It's a Friday evening, the sun is shining so go out & enjoy it & stop worrying about bananas.
Jaysus if we get the summer that's being predicted we could be able to grow our own bananas so don't worry about the farmer in the carribean, you could be looking to undercut him on price yet!

Winty · 26-03-2010 06:06PM

CreepingDeath wrote: »

Look at India, how many call centres and software development jobs have been lost to there ?

We need people to be poor or we wont be rich

Winty · 26-03-2010 06:07PM

easyeason3 wrote: »

Ah go on you whingebag
It's a Friday evening, the sun is shining so go out & enjoy it & stop worrying about bananas.
Jaysus if we get the summer that's being predicted we could be able to grow our own bananas so don't worry about the farmer in the carribean, you could be looking to undercut him on price yet!

Fair enough but not Fair trade

landsleaving · 26-03-2010 06:07PM

Why would one farmer suddenly make enough to satisfy tesco's demands if he became the 'fair trade' farmer, when before both of them produced for tesco previously, which means demand required 2 farmers? Surely in that situation tesco would pay the extra to both, continue sourcing from both and charge the excess to the consumer.

Your argument is flawed.

minidazzler · 26-03-2010 06:09PM

CreepingDeath wrote: »

If we raise the third world countries out of poverty, they're only going to turn around and compete with us with the advantage of lower wage levels.

Look at India, how many call centres and software development jobs have been lost to there ?

47?

opinion guy · 26-03-2010 06:10PM

Winty wrote: »

This is my simple theory, I will work more on the fine details but its based on facts I have read.

Alot of people in the industry see Fair Trade as a joke

Where did you get your figures? Why does farmer 2's price drop to 80%? You just pulled that out of your ass along with the rest of your theory.

seanybiker · 26-03-2010 06:11PM

Sure me man selling his for 80 will be selling to 80% of people and his family will be happy cos they can spend more time together while the 110 fella is only selling to 20% of people and spending his extra tenner in the pub because there is nobody to talk to at home.

Winty · 26-03-2010 06:11PM

landsleaving wrote: »

Why would one farmer suddenly make enough to satisfy tesco's demands if he became the 'fair trade' farmer, when before both of them produced for tesco previously, which means demand required 2 farmers? Surely in that situation tesco would pay the extra to both, continue sourcing from both and charge the excess to the consumer.

Your argument is flawed.

No its not, read it again, Tesco only need 20% fair trade, my argument is perfect

Winty · 26-03-2010 06:12PM

opinion guy wrote: »

Where did you get your figures? Why does farmer 2's price drop to 80%? You just pulled that out of your ass along with the rest of your theory.

The UN Bananna Office

opinion guy · 26-03-2010 06:16PM

Winty wrote: »

The UN Bananna Office

Oh so you're confirming you pulled the figures out of your ass then ?

landsleaving · 26-03-2010 06:19PM

Winty wrote: »

No its not, read it again, Tesco only need 20% fair trade, my argument is perfect

The amount of banans needed remains the same. It's irrelevant the exact amount, but lets assume a 50/50 split in prouction. Farmer 1, who is now selling fairtrade, continues making 50% of the banans, of which 20% (of the 100) are fairtrade, so he makes x amount more. The other farmer continues selling 50% of his 'normal' banana. But why would his price need to drop? There are no less bananas being prouduced, so no price drop per box is necessary. One farmer is simply lucky enough to make a little more on some of his bananas.

And now the word banana has lost all meaning.

But your argument remains flawed.

Winty · 26-03-2010 06:33PM

landsleaving wrote: »

The other farmer continues selling 50% of his 'normal' banana. But why would his price need to drop? There are no less bananas being prouduced, so no price drop per box is necessary.
But your argument remains flawed.

If 20% of people want a Fair Trade banana then normal banana sales will fall 20% so the farmer of normal banana will sell 20% less and because demand has fallen Tesco will pay a lower price

Supply and Demand

simple

BizzyC · 26-03-2010 06:34PM

Yes it is fair. Your example is completely speculative and shows very little understanding of the fair trade system.

Fair trade do not source the goods themselves, the award the mark to companies who provide a fair deal to the producer. So in your example above, Tesco would have to provide both farmers with your $110 figure in order for them to put a fair trade logo on their bananas.

Ruu_Old · 26-03-2010 06:37PM

ScumLord wrote: »

Where is the man from Del Monte when you need him? I think Tescos killed him and evil rained over the land.

He was offered a big bag of money from Tesco and said "Yes".

Winty · 26-03-2010 06:37PM

BizzyC wrote: »

Yes it is fair. Your example is completely speculative and shows very little understanding of the fair trade system.

Fair trade do not source the goods themselves, the award the mark to companies who provide a fair deal to the producer. So in your example above, Tesco would have to provide both farmers with your $110 figure in order for them to put a fair trade logo on their bananas.

No you missed the point, Tesco would not want all the bananas to be Fair Trade as its not in a big demand, so only one farmer is needed to produce Fair Trade so the other one looses out as Tesco will reduce his price because as it will be selling less

landsleaving · 26-03-2010 06:40PM

Winty wrote: »

If 20% of people want a Fair Trade banana then normal banana sales will fall 20% so the farmer of normal banana will sell 20% less and because demand has fallen Tesco will pay a lower price

Supply and Demand

simple

The demand is the same. The farmer of the normal bananas will sell the same amount... at the same price because the bananas are the same. It's just a different sticker. They're not magic or anything.

If tesco bought 100 banana boxes, they'd just stick a sticker on 20%. There is no reduction in demand whatsoever. The farmers will produce the same amount, one farmer will just make a little more money. How does demand fall. 80 + 20% is still 100% of bananas, which is what was being produced previously.

Don't buy Fair Trade its not Fair

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