Balancing Acts – Fair Trade: Don’t Forget

by  Tom Beutel

tom b

So I will always remind you of these things,

even though you know them and are firmly established in the truth you now have.

2 Peter 1:12 (NIV)

October is almost here and that signals the beginning of the parade of holidays with goodies, presents, and family times. October is also designated as Fair Trade month. Every few years I decide that it’s time again to focus on fair trade in my Peace Signs article. Probably many of those reading are well aware of fair trade and are involved in supporting fair trade in one way or another.

But, as the apostle Peter wrote to his readers centuries ago, “I will always remind you of these things,

even though you know them.” It is easy to get into a rut or to let our passion for a cause cool. But, fair trade is something we should make an effort to remember because it is one way, a relatively easy way, that each of us can promote justice by simply making different choices.

Fair trade is an alternative economic model. Textbook free trade is based strictly on the simplistic law of supply and demand. One party produces goods. Another party consumes those goods. If the amount of goods produced is less than that desired by the consumers, the price for the goods rises. The idea is that the higher price will reduce the demand since some will not be willing to pay the higher price. When the price rises, this, in theory, also entices new producers into the market, producers hoping to “capitalize” on the higher prices. When this happens the price goes down again. In this somewhat indirect way producers and consumers negotiate a “fair” price for the goods.

There are many problems with this concept. It may be that new producers cannot easily enter the market to produce goods. If oil prices are too high it is not easy for a new producer to produce oil. To do so requires exploration, drilling, transporting, refining, etc.

Even with goods such as coffee or fruits it is not an easy thing to become a new producer. One has to have land on which to grow crops, plant trees, wait for them to grow, then harvest, transport, process, and distribute their goods.

In a traditional free trade market, some of the difficulties are solved by specialists – transportation companies, processing companies, marketing companies and sales companies. While this reduces some of the difficulties for the producers, it also reduces how much the producer can get for their product. The consumer is still only willing to pay a certain price and all of the “middle men” will take their cut of the sales price.

For small producers what is left over may not be enough to live on. These small producers incur costs of production, need to live day to day, and often need to pay for their childrens’ education. And when demand slackens or there is overproduction, the end price drops, leaving even less for the small producer.

This, in a nutshell, is the situation for producers of goods such as coffee, the second most traded commodity in the world (second only to oil). Because most coffee is grown by small farmers in developing countries, the vagaries of the free market often spell hardship for producers. And, of course, consumers – generally you and I – always want the lowest possible price.

Fair trade seeks to solve this problem by guaranteeing a minimum price for goods such as coffee, providing low-cost loans to producers, facilitating formation of co-ops, and making long-term commitments to producers. This means that the price to consumers is likely higher than the free market might otherwise support. This is where fair trade becomes an issue of justice. We as consumers need to be willing to pay more to guarantee that small farmers can stay in business and have a decent life.

Quite a few year ago when I introduced this idea in a church, one person said, “So, you’re saying that I should pay more for coffee so that someone I don’t know on the other side of the world can have a better life?” That’s it exactly! Fair trade is fair because those who are willing to pay more do so to help meet the needs of those who are less well off. Certainly a people that frequent high-end coffee establishments for premium coffee, lattes, and other “fancy” beverages, can well afford to pay more for coffee they use at home.

So, what can each of us do? There a many ways to become involved. The obvious one is to learn about fair trade and buy at least some fair trade goods. Fair trade coffee is available on-line and in many groceries. Be sure to look for the fair trade symbol on the package.

Here are some places you can explore for additional ideas, information and opportunities.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s