Home
/
RELIGION & LIBERTY ONLINE
/
Acton University: Why Fair Trade isn’t fair
Acton University: Why Fair Trade isn’t fair
Dec 14, 2025 9:24 PM

Imagine: You are in the grocery store, searching for the perfect bag of coffee- not too expensive, but still rich in flavor and good quality. As you are turning away with the coffee you have just chosen, there on the shelf is a bag of coffee with the Fair Trade logo. After an intense internal debate, you return the first bag of coffee to its shelf and take the Fair Trade coffee with a sense of contentment. The coffee farmers in third world countries are a little better off today because of your purchase. Right?

Economist Victor Claar shed light on this question in his talk at Acton University. He analyzed the stated purposes of Fair Trade, the state of Fair Trade today, and the results of the Fair Trade initiative. He began the lecture by explaining the coffee market to a classroom that included economists, an African coffee farmer, and other good-hearted citizens.

The economic decision associated with choosing coffee plants requires considerations of risk and reward, particularly for farmers of third world nations. As Claar explained, arabica coffee beans brew the best coffee and are thus favored by customers. Although they are more profitable for farmers to grow, they represent an economic risk, particularly for third world farmers. Arabica plants take several years to mature and are delicate and easily damaged.

In addition, coffee farmers face an even higher element of risk, one they cannot control: the wrath of Mother Nature. Claar explained in his lecture that “there are four reasons for a spike in the coffee market: One, bad weather in South America. Two, bad weather in South America. Three, bad weather in South America. And four, you guessed it, bad weather in South America.” The volatility of the coffee market means that many third world farmers rely heavily on a steady climate to determine the success or destruction of that year’s crop.

Given these factors, the Fair Trade initiative, which provides small-scale coffee farmers with direct access to the world market, seems to be a productive and charitable idea. Yet the World Fair Trade Organization is not all it seems to be.

Prior to the second half of the twentieth century, Brazil was the only major producer of coffee beans. The country used valorization to make a greater profit: the Brazilian government would burn a percentage of the crop in order to raise the prices of the heavily-demanded product. In the 1950s, Colombia emerged as a petitor in the coffee market. By the 1960s, enough nations were entering the coffee market, and employing destructive measures to make economic profit, that the United Nations intervened with the International Coffee Agreement of 1962. The ICA introduced maximum production ceiling for coffee for each participant country. Although the ICA has been ratified six times since its conception, Claar argued that, the Agreement essentially collapsed in the 1990s.

In the wake of the ICA, the World Fair Trade Organization appeared. Under the guise of a benevolent savior of the poverty-stricken coffee famers of the world, Fair Trade has been, in reality, a series of attempts to keep the poor farmers of third world nations in poverty.

There are several Fair Trade secrets that Claar employed to support this claim. Even “unfair” coffee may originate from Fair Trade farms. Some coffee bags and products e from Fair Trade farms do not have the logo to identify them.

Ironically, majority of Fair Trade es from wealthy nations, because they are able to pay the fees and make a profit to grow their farms. Fair Trade gives their suppliers an average of an extra $0.20 on the global average purchase price, but it is costly to join, and remain a member of, the Fair Trade network. The Fair Trade minimum that kicks in when the market bottoms out is just barely enough to pay the dues, but not enough to bring families out of poverty. This is where the World Fair Trade Organization truly does the opposite of what it is meant to do. Farmers on the poverty line make just enough money to remain a part of the network, but the annual Fair Trade fees keep the poor in poverty.

The initiative also utilizes social capital to further their profit. Fair Trade recognizes that, if they portray themselves as a charitable organization that helps pluck poor farmers out of destitution, the charity of the human heart will encourage coffee drinkers to buy products with the Fair Trade logo. The consumers will see this purchase as more than a cup of coffee, but an act of justice or charity aiding the poor farmers.

So what can we possibly do? Claar’s solution for the Acton University attendees is simple: when you find yourself in the coffee aisle, buy the brew you like best and that fits your budget. This conclusion was supported by an African coffee farmer who was an attendee of the lecture. The gentleman thanked Claar for revealing the truths about Fair Trade, stating that the hard working farmers of the world need the support of individuals around the world to buy their products. Organizations like Fair Trade do more harm than good for hard working farmers around the globe. So the next time you find yourself at the store for your next cuppa’ joe, follow both your heart and your wallet to find your favorite brew.

(Photo source: )

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Misreading capitalism
‘A statue of Adam Smith on Edinburgh’s Royal Mile’ by Zenit CC BY-SA 3.0 At this year’s LibertyCon Byran Caplan, Economist at George Mason University, and Elizabeth Bruenig, columnist for the Washington Post, debated the perennial question of ‘Socialism vs. Capitalism.’ Both Caplan and Bruenig have posted their opening statements and it is an interesting and engaging exchange. Caplan is charitable, well-reasoned, and clear and Bruenig is both gracious and an engaging storyteller. Bruenig’s story while superficially plausible makes many...
Radio Free Acton: Philip Booth on what’s missing from Laudato Si’; Upstream with jazz legend Norma Winstone
On this episode of Radio Free Acton, Rev. Ben Johnson, Senior Editor at Acton, speaks with Philip Booth, Professor at St. Mary’s University in the UK about what’s missing from the 2015 Papal Encyclical: Laudato Si’. Then, on the Upstream segment, Bruce Edward Walker talks to British jazz legend Norma Winstone about her contribution to Jazz and her newly released album: ‘Descansado – Songs For Films.’ Check out these additional resources on this week’s podcast topics: Read “Property rights and...
Employers should fulfill their obligations to tipped employees
A tipped employee engages in an occupation in which they customarily and regularly receives more than $30 per month in tips, according to the Department of Labor. An employer of a tipped employee is only required to pay $2.13 per hour in direct wages if that bined with the tips received at least equals the federal minimum wage. If the employee’s bined with the employer’s direct wages of at least $2.13 per hour do not equal the federal minimum hourly...
Give socialism a try? Let’s not.
“Yeah, well, you know, that’s just, like, your opinion, man” – Jeffrey “The Dude” Lebowski played by Jeff Bridges. ‘Jeff Bridges speaking at the 2017 San Diego Comic-Con International in San Diego, California’ by Gage Skidmore CC BY-SA 3.0 Elizabeth Bruenig, columnist for the Washington Post, yesterday published an opinion piece entitled, ‘It’s time to give socialism a try’. The title is a bit misleading as the piece makes no positive case for socialism but rather chronicles her own and...
What is Gross Domestic Product (GDP)?
Note: This is post #70 in a weekly video series on basic economics. GDP is the market value of all finished goods and services, produced within a country in a year. But what does “market value” mean? And what defines a “finished good”? In this video, Marginal Revolution University helps us make sense of this important economic indicator by explaining how GDP puted. You’ll learn whythe eggs in your homemade omelet part of the GDP, but the eggs your baker...
Crushing religious schools with state funding
The UK government has crafted an educational mandate for religious schools that Sohrab Ahmari at Commentary calls “Orwellian.” Under the proposal, all schools would be required to teach children from age 4 and up “age-appropriate” content that includes information about same-sex marriage and transgenderism. Catholics, evangelicals, Orthodox Jews, Muslims, and others with traditional views on sex and gender would have ply. No exceptions. He notes that a senior government adviser stated it is “not OK for Catholic [or other religious]...
The logic of the soul: 6 quotes from Whittaker Chambers’ ‘Letter to My Children’
In a recent Acton lecture, Greg Forster highlights the work of Whittaker Chambers, the former Soviet spy who converted to Christianity and became one of the most influential public voices in the fight against Communism. Chambers’ most famous and enduring work, Witness, is an astounding personal memoir and a literary treasure. It transcends genres, mixing the thrills of espionage and political intrigue with quiet spiritual reflections and jaw-dropping forays into moral philosophy, all in the service of a simple but...
Samuel Gregg on contradictions in the papacy
Journalist and Harvard alumnus Philip F. Lawler is no stranger to spotting inconsistencies in the Catholic Church. After the Catholic Church’s sex-abuse crisis unveiled in 2002, Lawler released his highly researched book, The Faithful Departed, tracing the Church’s history of corruption while maintaining an “attention to facts” and a “calm tone.” Lawler’s latest book addressing the Catholic Church tackles problems starting in the papacy. In an article written for The Catholic World Report, Samuel Gregg, Acton’s Director of Research, unpacks...
FAQ: Trump’s steel and aluminum tariffs
President Donald Trump is scheduled to announce new steel and aluminum tariffs from the White House at 3:30 p.m. local time. What is President Trump going to announce? Trade officials have said the president will impose across-the-board tariffs of 25 percent on imported steel and 10 percent on aluminum, which will go into effect between 15 and 30 days from now. He would temporarily exempt Canada and Mexico, according to Trump adviser Peter Navarro, although President Trump has tied this...
After apartheid, South Africa veers toward vengeance
“South Africa’s institutionalized national sin of radical and often violent racial segregation, officially known as Apartheid, ended in the early 1990s. Changes in law, however, do not necessarily mean that there is immediate social transformation,” says Trey Dimsdale in this week’s Acton Commentary. “The deep civic wounds that this dark period inflicted on the nation still fester, as evidenced in a March 1 vote by the National Assembly to confiscate white-owned land pensation.” A national policy as thorough and systematic...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved