Are Fairtrade farmers paid worse than other farmers in the same regions?

Question

There have been a few articles recently on the (in)efficiency of fair trade organisation Fairtrade. Here is an example from the Guardian:

Sales of Fairtrade-certified products from Uganda and Ethiopia are not benefiting poor farmworkers as profits fail to trickle down to much of the workforce, says a groundbreaking study.

The Fairtrade Foundation is committed to "better prices, decent working conditions, local sustainability and fair terms of trade for farmers and workers in the developing world". But a UK government-sponsored study, which investigated the production of flowers, coffee and tea in Ethiopia and Uganda, found that "where Fairtrade flowers were grown, and where there were farmers' groups selling coffee and tea into Fairtrade certified markets, wages were very low".

Christopher Cramer, an economics professor at Soas, University of London and one of the report's authors, said: "Wages in other comparable areas and among comparable employers producing the same crops but where there was no Fairtrade certification were usually higher and working conditions better. In our research sites, Fairtrade has not been an effective mechanism for improving the lives of wage workers, the poorest rural people."

Fairtrade disagrees (perhaps not surprisingly), stating that the study got its statistics all wrong, e.g.

In several places [the study] compares wages and working conditions of workers in areas where small-scale Fairtrade-certified tea and coffee farmers were present with those on large-scale plantations in the same regions.

So, my simple question is: next time I by a bunch of Fairtrade bananas in my local store, can I rest assured that I've made life better for a bunch of farmers, or not?

Answer 1

The question doesn't seem quite right: Farmers do better yes, but it's farmworkers that the quote is about.

Here is the relevant Fair Trade, Employment and Poverty Reduction (FTEPR) project reports:

• Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda April 2014

• Appendices

In a straight comparison between workers at Fairtrade Certified and Non-Certified farms, yes, the workers have worse conditions and are paid less.

Let's grab an example of Ethiopian flower sites from the report's appendices:

• Average daily wages male [Certified]: 8.7

• Average daily wages female [Certified]: 9.9

• Average daily wages male [Uncertified]: 14.6

• Average daily wages female [Uncertified]: 14.0

So looking at it that way, the answer is yes. On average, you're better off being a random worker at an uncertified farm than at a Fairtrade certified farm.

Workers at Fairtrade certified farms are also less likely to be part of trade unions, more likely to have their pay delayed, less likely to have clean toilets or showers, less likely to give paid medical care and more likely to suffer physical/sexual abuse or threat at workplace.

But this is misleading! Fairtrade doesn't pick their suppliers randomly. They tend to buy from smaller farms and small businesses in poorer areas. It's like comparing the wages of employees of small startups vs Google. Large efficient companies can be quite good employers because it can be more cost effective to treat employees better.

So Fairtrade's defence also has some basis. Non-Fairtrade Small-Scale perform even worse than Fairtrade Small-Scale farms.

To quote part of the conclusions of the paper:

The reasons for Fairtrade’s failure to make a clear positive difference to wages and conditions, or to the amount of work offered, are fairly clear. They have to do – especially in the production of “smallholder” commodities – with what this research suggests has been in the past a wilful denial of the significance of wage labour and an obsessive concentration on producers/employers and their organisations.

Fairtrade focus on farmers (i.e. small business owners with land), not on workers. It runs into the same problem as trickle-down economics. They assume that if farmers get a better price, then that will trickle down to their employees. That isn't a safe assumption.

The appendix also mentions another certification - MPS-Socially Qualified MPS-SQ farms which appear to do much better for workers on a lot of these measures, as their focus for certification is on employees rather than employers.