How to Improve Fair Trade: #1

1. Producers receive a fair price - a living wage. For commodities, farmers receive a stable, minimum price.

I am concerned that this principle assumes the buyer does not deserve a fair price - a living purchase.  A voluntary trade involves two parties, the producer and the buyer.  Both share in the transaction because they think they will be better off after it takes place.  They both agree on a living price.

Let’s take the example of a coffee farmer.  If a buyer spends less on the goods provided by one farmer, they the buyer has more to spend on the goods of another farmer or on another industry, such as purchasing a mobile phone or clothing.  These other industries also employ low-wage workers in semiconductor and textile manufacturing.  The choice to support one producer would be the choice to favor that producer over others in the same position.

Also, this argument doesn’t acknowledge that people are unique and may value commodities differently.  Where some people might love the latest fads and trendy music and be willing to pay a ton of money to have these items, others consider these items to be trite and unnecessary and wouldn’t spend a dime on them.  The same is true for coffee and other products.

Consider if the price of $100/lb was decided upon as a ‘fair price’ for coffee.  Clearly, a coffee farmer whose beans were once enjoyed by low-income buyers would no longer be able to sell his coffee to these people.  Now, $100/lb is an exaggeration, the real fair ‘fair trade’ price may just be $1 dollar or $2 dollars more than the initial price.  But the same principles hold.  Some low-income buyers will no longer be able to purchase this type of coffee because it will move out of their price range and others will have less money to spend on the goods of other producer’s who might be in a similar low-wage position.

Thus, by the standards set in this first principle, ‘fair trade’ favors certain producers at the cost of others and favors producers over buyers.  This is not fair, nor does it leave fairness to be decided by merit but by favor and privilege.