Suppliers

Fair Trade sales are growing. No longer are fair trade products only to be found at the back of church after the service or in charity shops, but everyday shoppers can now find them on the shelves of major retailers.

This poses two questions about who benefits.

Firstly, fairly traded products sell on the grounds that the producer is paid a premium above the market price. If that added cost is passed on to the consumer, then consumption of the product will fall. Which of the intermediaries between the producer and the consumer should absorb the cost of the premium to keep the fairly traded product competitive in the market? The answer is unclear. An incisive economic analysis on this point would be helpful.

Secondly, it is claimed that fair trade assists community development. Can the co-operatives involved show that they have better outcomes on health, education and security of income than other producers? Is investment in education and health more beneficial than investment in new roads and improved technology? If fair trade is to consolidate its success, these questions need to be investigated too.