'Free Trade Not Fair Trade'
- Michael Dowsett's blog
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The concept of fair-trade suggests ideas of equality for third world farmers, helping them escape unbearable poverty and develop sustainable frameworks for long term development. The reality however, is very different.
Firstly, the subsidies gained by the fair-trade lobby are often not given to the very poorest farmers, those most in need of it. Also, the subsidies system simply embeds the primitive farming methods used by the farmers in the third world, stopping them from developing their economy from an agrarian backwater into more profitable industries. The psychological effect of such support can also dampen the farmers’ entrepreneurial spirit to innovate and discover new ways of generating income.
The second problem concerns the meaning of the world fair. The desire of politicians on the left for equality of income leads to a moralising attitude from the fair-trade lobby where ‘greedy’ westerners are made to feel guilty for the poverty of underdeveloped nations, none of which is there fault. The fair-trade lobby know this, and use it as a marketing ploy to sell their product. In terms of equality of opportunity, the fair-trade subsidies stifle innovation and will trap many farmers in multi-generational poverty. The fact that the seasonal nature of agrarian work and the inefficient distribution of fair-trade income from retailer to producers also creates an unsustainable system. It is thus clear that fair-trade is a stop-gap policy at best, and does not solve the fundamental development of economic underdevelopment in impoverished countries.
The free market offers the solution to this. The first thing the West should do is abolish the Marxist CAP, and open up European markets to poor third world farmers. The abolition of subsidies through fair-trade will encourage innovation and will eventually reduce reliance on agriculture through broader economic development, which will help the poorest farmers the most.