A very interesting posts behind the workings of Fair-trade.
The unequal distribution of the gains of Fairtrade (FT) derives in a large part from the characteristics of certification. The certification system presents a twofold bias against the poorest developing countries. First, there are considerations related to the costs of certification. These being the same everywhere, they are relatively more expensive for the most disadvantaged countries, all other things being equal. Then, due to its sliding-scale price structure, certification is less costly for large producer organisations than for smaller ones. Finally, the cost of compliance with FT standards (changes in agricultural and administrative practices that often lead to an increase in working hours) is higher for small organisations due to their lower productivity and lower economies of scale.
FT-certified articles tend to be based on products usually exported by Latin American countries. Coffee represents 36% of certification demand. Tea (9.3%), fresh fruit and vegetables (9.1%) and bananas (8%) complete the list of top certified products in 2009. One out of two FT-certified products is either coffee, bananas or cocoa. In terms of export revenue, coffee is also the most sold FT product, at 47%, followed by bananas at 18.8%. Coffee and bananas account for two-thirds of export revenue generated by FT. Yet, Latin America accounts for 263 out of the 317 coffee certifications granted in 2009 (or 83% of certifications) and 70 out of the 71 banana certifications.
Read as well the response from Fairtrade International with as last quote:
Fairtrade is a constantly evolving system doing as much as we can to make trade fairer. We do not claim to be a perfect solution to the many issues in international trade — but we are a part of the solution. As we have grown we have strengthened our certification systems, and are confident in the strength of our Standards as a tool for producers, traders and companies to create more equitable trade relationships and build the capacity of farmers and workers to manage the rigors of international trade.
At the end I do believe it’s good there’s critique and control on even one of the most famous fair working environment organizations and I’m fairly interested in how they take it from here.