Procrastination man - Part 2

Following the privatisation of formerly French-owned Dagris (a society dealing mainly with managing cotton trade in Africa), fair trade, or rather Fairtrade branding, is once more in the centre of controversy. The issue arose when Dagris turned to the blue and green label (known in France as Max Havelaar).

What are the issues? That the branding goes to ethically-dubious companies: Fairtrade has become more of a PR stunt for those applying it than a genuine willingness to improve producers' lives. As an example, the UK-based (organic) chocolate company Green & Black's is producing lots of different kinds of chocolate, amongst which the much publicised Maya Gold is Fairtrade-branded. And is the only one of them to be so. Thus, the entire range of Green & Black's products benefits from a positive image.
The same could be said of outlets offering Fairtrade products and yet being far from embracing a development philosophy. The example that springs to mind is Starbucks . They may very well offer Fairtrade coffee, among other products. But recently it lost a PR war to development companies, dealing with the trademarking of certain coffees, when the American giant opposed the Ethiopian attempts to protect the name of some of its regions. More infos about the coffee name row in Der Spiegel (English)
Which leads to the following reminder:

Fairtrade is a (fairly reliable in my opinion) label applying to the product itself, not the outlet, or the company selling it, or the range of products of a same brand.

Obviously, the scale that the Fairtrade movement has, happily, taken over the past couple of years, has led to the labelling to be more business-like. Assessing products has a cost, that can only be met by donations to a certain point. So being Fairtrade has an inherent cost, in terms of labelling, that goes to the labelling business. This leads to regroupment of small growers into bigger cooperatives - to make the very labelling possible. This criticism has been levelled at the idea of a Fairtrade label. I, personally, do not see a problem in making the growing more efficient, so long as it is self-managed; and even though this may well make it harder to measure the outcome in terms of the individual grower's life, it is a help to development.
Also, being a label implies the definition of a certain number of norms/boundaries, which have been set in stone; and may well just be met by Fairtrade labelled products. This is, again, the situation of the trader not embracing the fair trade philosophy, but trying to pull a PR stunt allowing for a higher selling price, and it is quite sad that it is so. However, one must think that these boundary-prices, even though relatively low, are not met by non-Fairtrade products, which is quite relevant of the situation of standard growers.
Far from fair Nestlé is said to be in touch with Fairtrade and wanting to introduce Fairtrade products. I say, let them. Of course, it will be little more than a PR stunt on Nestlé's part, and will not mean that Nestlé has suddenly turned into the humanitarian company that it is not. But it will improve certain growers' life conditions.

Most of the criticism levelled at Fairtrade is thus quite dubious and leads to interrogations as to whether those criticising it really have the interests of development at heart. However, this is not true of all the criticism. And here comes the downside of fair trade.
The current situation of growers' underpayment (not mentioning how ridiculous their earnings in terms of percentage of the final produc's cost), and the reason why the growing industry is not sustainable for standard growers, stems from a global overproduction of certain products, coffee being one of the worst examples. This is not a consequence of the Fairtrade movement; but of the IMF/World Bank's recommendations conditions. However, Fairtrade is maintaining incentive for, say, coffee growers, by artificially upping the prices. Which in term allows for a continued overproduction of coffee.
Economically, Fairtrade makes no sense. In any simulator, you'd just wait for the situation to come to an acceptable compromise between offer and demand. However, in real life, there is little choice - for farmers have been encouraged to grow coffee (was it in an attempt to keep coffee prices low?), and are now in a dead-end. Somehow, it is our own doing we're trying to put straight.
But because of this argument, we can see Fairtrade is not meant to be a long-term solution. It is far from perfect, but it is necessary, as a patch.

We can do better, obviously: Fairtrade is not enough. If we want to pursue in the 1964 Trade not Aid! direction, we must be more demanding than what the Fairtrade label has to offer. We have to choose brands that ensure there is a real difference for the growers ^[1]. Oxfam is one of them. Long-term, we may want to implement some quotas, in terms of percentage this time, of what the grower earns. This can be done through political lobbying.
And we can support development. Practically, on different levels, from campaigning kits to goats, from education to healthcare. This is just the reason why Oxfam Unwrapped is so great.