How Fair Trade Hurts Everyone

Keep your bleeding heart away from my food

By: Aditya Bindal and Charles Johnson

Posted: 3/13/08

Fair trade is everywhere on campus. Valentine's Day was no exception.

This year, Valentine's Day came with guilt-free, "ethical" chocolate. Yes, our sweet, chocolaty desires have fueled a civil war in the Ivory Coast. So fliers on campus advertised "conflict-free" chocolate. These Valentine's Day candies make trade "ethical."

At the Claremont Colleges, fair trade is nothing new. All of the dining halls boast their fair trade coffee and their local, organic produce. These dietary measures seek to solve all the world's problems at once: global warming, hunger, poverty, civil war-you name it. The buzz words "Locally Grown," "Organic," "Fresh" and of course 'Fair Trade' are bandied about promiscuously. But what exactly do they mean? Should we embrace Fair Trade?

To answer this question, we headed to the bastion of progressivism-the Motley. The Motley, run by Scripps students since 1974, promotes "an ongoing process of empowering change." But just what kind of change?

According to its mission statement, the Motley-an "alternative space," "open and welcoming to all,"-aims to serve its community. To achieve that goal, it supports "fair trade." Even a sticker from Oxfam on the refrigerator encourages customers to "make trade fair." But what's wrong with trade as it is?

Motley Manager Sophie Herron '08 starts by defining free trade for us: "free trade is based on free and unrestricted trade between countries with as low barriers, tariffs and overheads as possible. This means that in countries where the economy is not good, workers are not paid a reasonable wage."

Ms. Herron defends all of the efforts to buy locally grown produce because, well, in her eyes, the local is always better. But coffee and chocolate aren't typically grown in Southern California, so for that you need fair trade.

"Fair trade," Herron explains, "is when trade is fair because the people providing the goods are receiving wages that they can afford to live on and support their community."

A paradox lies at the heart of her definition: buying locally means not buying from poor farmers abroad, whose incomes the Motley hopes to raise. And yet, when the Motley does help pay those workers more for their produce, it helps create surpluses in the market and drive down prices.

Think about a factory worker in Vietnam, the country that produces the most coffee after Brazil. If coffee farmers get paid higher wages, more people will want to produce coffee, including the factory worker. Suddenly, everyone starts making coffee. But if everyone is making coffee because it pays the most, who will grow bananas, teach schoolchildren, or work in the factories? So in effect, the cost per bean plummets as the cost for other goods climbs.

The large coffee companies don't mind. After all, a flooded market is to their advantage. They can have their pick of cheaper beans. Unfortunately Vietnamese farmers, thinking that their coffee prices will soon climb, often don't plant other food on their tiny plots of land. And when those prices don't rise, they might starve since no one can eat the coffee bean.

Fair trade policies can have other disastrous effects as well. For instance, when NGOs demanded a higher price for bananas to help raise the cost of living for the Guatemalan banana producer, banana companies ended up leaving and relocating to Ecuador, where wages were lower.

Why do so many keep demanding more fair trade? For some businesses, the results can be enticing. Because the Organic, Local, Fresh, Fair-Trade buzz has been on the rise lately, businesses that cater to this food trendiness can often make big bucks and say they're promoting "corporate social responsibility" at the same time.

David Janosky, Sodexo General Manager of Dining and Catering Services, endorsed this path soon after his arrival at Pomona in 2001. Sodexo, he explains, was simply "responding to demand." Demand, Pomona students certainly did. The ASPC Senate Progress Report for 2003-2004 (Volume I) planned "negotiations with Dining Services for more organics/fair-trade coffee."

Student governments, particularly Pomona's, have been leading the charge for fair trade products. In 2005, TSL writer Terra Bennett gushed that Pomona students Katie Jones '07 and Stephanie Corey [Year?] deserve "[Pomona's] congratulations" for convincing the dining halls to introduce fair trade coffee.

Although Janosky says the Pomona student government isn't trying to "re-negotiate anything with Sodexo," Environmental Affairs Commissioner Kyle Edgerton '08 believes just the opposite. In November 30, 2007 article about Sodexo choosing local produce, he says that the dining hall changed its policies as soon as ASPC President Elspeth Hilton '08 "put the challenge to Sodexo."

Maybe if Pomona students understood how fair trade hurts the people it is intends to help, they would put the challenge to their own student government.

Yet they would surely face opposition from places like the Motley, where managers decide what policies to pursue. Most businesses, such as Sodexo, respond to customer demands if the costs aren't too prohibitive, but the Motley, a non-profit, uses its platform to promote its politics.

The management, for example, decided to stop selling Vitamin Water and Naked Juice after they were acquired by Coca Cola and Pepsi Co, respectively. These products could no longer be sold on campus since the two giants were obviously not family-owned, local, fresh, organic, or fair. And the fridge at the Motley gets sparser and sparser every year as more and more juices are bought up by supposedly evil corporations.

Students, on the other hand, liked these two products. "We try to take the customer in our community really seriously," says Herron. "They are one of the main things we are thinking really seriously about."

As well they should. After all, the Motley is subsidized by both the federal government and Scripps College. The Motley is under the Scripps tax code, which means that it does not pay any taxes. The Federal Work Study program also helps defray the cost of workers. The Motley employs 52 people, including 12 student managers. Almost 90 percent of its workers are on work study, according to Herron.

It's no comfort to know that both our tax dollars and, indirectly, our tuition dollars are financing establishments willing to lavish extra money for fresh, organic, local, and fair produce. Yet students don't object because the assumption that these policies do good remains unchallenged on campus.

Naturally, ensuring whether or not these policies help people is beyond the Motley's means. As Herron concedes, "We have no way of verifying whether the trade is actually fair."

She's right. It's nearly impossible to monitor these activities, especially with such large degrees of separation between us and the actual producers in the global coffee market.

But those degrees existed long before fair trade and will exist long after it is replaced by something trendier.. And yet, many remain convinced that free trade doesn't work. Where's their evidence? Why replace tried and tested economic models for something that has no concrete evidence?

After all, free trade, not fair trade, liberated millions from poverty in Asia. Fair trade hurts people from Vietnam to Venezuela, from your community to your plate. --Aditya Bindal and Charles Johnson are freshmen at Claremont McKenna College