What is Fair Trade for?

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Emeka Okafor asks:

Does fair trade really change anything or just make Western consumers feel good?

Tyler Cowen suggests:

How about a genre called "Exploitation Coffee"?  You pay less, and they promise to treat the workers especially poorly. That wording is a less effective marketing ploy, but that is what quality differentiation and indeed "fair trade" boils down to.

Frances Stead Sellers comments:

Anti-globalization activists criticize huge companies such as Levi Strauss and Starbucks, even though Levi Strauss was among the first multinationals to establish a code of conduct for its manufacturing contractors and Starbucks is one of North America's largest roasters and retailers of fair trade coffee. And both can probably afford to be more altruistic than many smaller companies.

Here's Alex Singleton:

I've increasingly found being a critic of Fairtrade somewhat uncomfortable. After all, if the Globalisation Institute is about anything, it's about enterprise-based solutions to poverty. And that is, surely, what Fairtrade attempts to be. Fairtrade fits in nicely with the GI's meme that it's better to help developing countries by putting the money in at the bottom, rather than at the top through governments.

And The Undercover Economist (ahem - me) reports:

The truth is that fair trade coffee wholesalers could pay two, three or sometimes four times the market price for coffee in the developing world without adding anything noticeable to the production cost of a cappuccino. Because coffee beans make up such a small proportion of that cost customers might have concluded that the extra 10p was to cover the cost of the fair trade coffee, but they would have been wrong.

What do you think of Fair Trade products, where producers receive a premium for coffee or chocolate? An essential contribution to relieving poverty? Helpful but trivial? Harmless? Worse than useless? Comments are open.

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