Guardian report on Fairtrade:
Oppenheim points out that of the Ã‚Â£1 extra paid for a bag of Fairtrade bananas, the proportion going back to the farmer is 4p, while of the 99p paid for a Fairtrade chocolate bar, the return for the cocoa grower is ‘less than 2p’. If a supermarket charges Ã‚Â£2.49 for a packet of own-brand Fairtrade coffee, when the combined cost of buying, shipping, roasting and packaging it ‘cannot be much more than Ã‚Â£1’, it results in a gross profit margin of 160 per cent.
It’s not exactly ethical, but it’s not exactly news. Retailers stay in business by driving down the prices paid to farmers and preserving their own profit margins – making Oppenheim’s article an indictment of capitalism rather than Fairtrade. As Harriet Lamb points out, ‘We set the price for the farmers, which is the only bit we could ever begin to control. If we tried in any way to set the price for the consumer, we would be taken to the Competition Commission.’ In other words, it is the retailers and middlemen who determine the mark-ups – based on the amount we are stupid enough to pay. At least under the Fairtrade system, it is consumers in the north who are being exploited, not impoverished farmers.