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Fair Trade movement grows

The Post, OH

Coffee and Chocolate.

For some students, these items can be bought in a vending machine or a gas station, but others make a conscious effort to get these goods from a fair trade distributor.

These proponents of fair trade, a market practice that creates work and wage standards in countries that have few labor laws, want coffee and chocolate producers in underdeveloped countries to profit from their labor. But some proponents of a free market economy say that trade restrictions hinder economic growth.

Fair trade is a growing movement both nationally and locally, said Cassi Slone, an administrative coordinator at Café Bibliotech.

Café Bibliotech sells coffee purchased through The Roasterie, a fair trade good provider based in Kansas City, Slone said.

Fair trade products tend to cost more, but many people see the wages that fair trade laborers receive as worth the additional cost, and the product is usually fresher and better quality, said Essam Mikhail, a founder of the OU fair trade group.

“A can of Folgers coffee has taken at least nine months to reach store shelves, and it is not organic,” Mikhail said. “Fair trade coffee usually reaches the consumer in seven to ten days and most is organic.”

A traditional 52-ounce canister of Folgers coffee costs $12.95 and a 16-ounce bag of fair trade coffee from Donkey Coffee and Espresso in Athens costs  $12.

There is usually a 20 to 30 percent difference in costs, said Richard Vedder, a professor in the economics department.

The additional cost is a result of the increased wages paid to the producers.

“Fair trade producers make at least four to five times greater income than producers for an entity outside of the fair trade networks,” Mikhail said.

Laborers not in the fair trade market earn $0.30 per pound of coffee, and laborers in fair trade markets can earn $1.50 per pound of coffee, Mikhail said.

The minimum price and working standards for the fair trade market are set by Fair Trade Labeling Organization International, which is an independent non-profit labeling organization, according to fair-trade.net.

It is then the responsibility of TransFair USA  — the national labeling organization for North America  — to license and certify products as fair trade, according to TransFair USA’s Web site.

“Fair trade cuts out the middle man and all sell products to their own buyers.  Farmers in a community create cooperatives and sell directly to buyers,” said Rebakah Daro, a graduate student studying International Affairs.

The extra money cooperatives bring in by selling at the fair trade rates allows them to build schools, clinics or mills to continue production, Daro said.

Free trade producers can receive up to 60 percent of the revenue up front in order to finance their production — they buy things such as tools, beans and any other startup expenses, since there aren’t banks to provide loans, Mikhail said.

While free trade growers can experience an immediate increase in revenue, long-term economic effects should be considered, Vedder said.

The concept of fair trade has not been historically beneficial in terms of maximizing income for all the participants, he said.

Groups of farmers that have formed cooperatives that have grown too large to be considered fair trade producers will sometimes split into smaller groups or they will forgo their fair trade status and enter the free market economy, Daro said.

For those farmers who choose to continue to grow fair trade products, their revenue can be limited by fair trade regulations, Vedder said.

Because the minimum criteria to be considered fair trade have wage regulations, safety measures and age limits, an employer may have to lay off some workers to afford the new standards, Vedder said.

The free market economy has fewer regulatory policies, he said.

“Due to the restrictions of trade by the additional regulations, fair trade is anti-consumer and potentially harmful to the poor,” Vedder said.

Economic and political factors such as rules of law and a stable currency can change living standard and help bring people out of poverty, he said.

Students may not have the power to change such large-scale factors, but they can buy their preferred brands, fair trade or other, and influence others by their example, Vedder said.

“Simply being mindful of the power one has as a consumer can help make a difference.” Daro said.


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