Addicted to caffeine? Like economic justice?
Tufts claims to have been selling both, in a cup, for over 11 years. Go to Dewick or Carmichael and you will probably see the black and white fair trade logo in the coffee section. The Tower Café, the Rez and Oxfam sell exclusively fair-trade certified coffee.
But is this a good idea? The Economist calls fair trade "an inefficient way to get money to poor producers." The Cato Institute, a Washington think tank, has referred to fair trade as a "well intentioned, interventionist schemen ... doomed to end in failure." Does buying fair-trade coffee cause more harm than good?
Sudeep: Fair-trade coffee is a misguided attempt at achieving social justice. Selling only fair-trade coffee in certain cafés can be destructive to both coffee producers and consumers. The reason that coffee farmers are facing low wages is the excessive production of coffee.
With comparatively little demand, competition pushes coffee prices down. If we are to improve conditions for the millions of coffee producers around the world, we must tackle this problem directly. Fair trade, by providing high wages in an already barren sector, will only increase the problem by drawing more farmers to coffee farming. As a result, there will be more people unable to sell their coffee. Wages for non fair-trade farmers will hit rock bottom.
Fair-trade certification organizations only certify small worker cooperatives. This can often be a damaging value judgment. By placing a premium on one method of production, fair-trade organizations are discouraging farmers from researching and investing in more productive technologies.
Fair trade is also an inefficient way to get money to the poor. Not all of the fair-trade premium is passed onto the farmers; some of it is used to pay the large administrative costs associated with certification and regulation. Direct charity or more focused development work could ultimately be a better way to increase the livelihood of the needy.
Peter: Fair-trade is not an ignorant attempt at charity. It uses market-based mechanisms to justify better wages for oppressed coffee producers. Fair-trade farmers get fair-trade wages only if there are buyers willing to pay them. Many fair-trade producers also operate in the conventional market. As a result, there is no excess supply, and resources are used efficiently.
Fair trade could be the first step in replacing conspicuous consumerism with conscious consumerism. You often hear politicians and others saying that every day we "vote with our dollars." Fair trade is a logical extension of this idea.
The low wages in the coffee market are not the sole result of excess supply. The coffee market is not perfectly competitive. There are many coffee intermediaries (such as Kraft or Nestlé) who have considerable negotiating power over the poor, unorganized coffee producers they buy from.
Moreover, extra money from fair trade is spent on education and infrastructure. These benefit both the fair trade and conventional producers. Over time, there is a sustainable development in the communities and an increase in the wellbeing and skills of the coffee producers. This is justifiable by itself. Human beings deserve access to education, healthcare and proper infrastructure. Fair-trade coffee can provide all this and more.
Sudeep Bhatia is a junior majoring in philosophy; Peter Radosevich is a junior majoring in political science. They can be reached at Sudeep.Bhatia@tufts.edu and Peter.Radosevich@tufts.edu, respectively.
