Fairtrade (FT) represents itself as a consumer-driven long-term development strategy. It claims to support poor producers in the global south and aims to alleviate them from poverty by certifying their production processes and selling their products to consumers in the global north at a price premium. The FT movement has succeeded in convincing conscientious consumers that its labelled products are the most effective in aiding the poor. However, the extent to which the FT model brings net benefits to the poor is largely unfounded.
The FT model of production and trade does not target the poorest countries and producers globally; instead it supports largely middle-income countries and relatively wealthy small landowners. The FT model is restrictive and inefficient. It certifies producers as eligible according to its own labour, environmental and social values. This predicates a host of demands on the poor and picks among them on the basis of their ability to meet criteria and not on the basis of need. Further, the FT model is flawed as its fixed minimum price distorts product markets and props up unproductive industries in developing economies.
The FT movement is misguided and incapable of achieving its stated goals. Alternative consumer based development initiatives, Aid for Trade strategies and free market mechanisms are more effective in targeting the poor.
Based on these findings the paper makes a number of recommendations to key stakeholders including developed and developing economies, consumers and FT organisations.
The Report can be viewed here.