Home
/
RELIGION & LIBERTY ONLINE
/
Acton University: Why Fair Trade isn’t fair
Acton University: Why Fair Trade isn’t fair
Dec 13, 2025 8:49 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
Was The Current Border Crisis A Foreseeable Event?
In a scathing report in The Washington Post, reporters David Nakamura, Jerry Markon and Manuel Roig-Franzia detail how the current border crisis involving a surge of children from Mexico and Central America was predicted by several human rights organizations and that the Obama administration failed to act, thus creating not only the increase in children illegally crossing the border, but also the desperate conditions the children have had to endure. In 2013, the University of Texas at El Paso issued...
Audio: Elise Hilton on the Border Crisis
Earlier today, Elise Hilton was featured on the Neal Larson Show discussing several facets of the current “Border Crisis” and suggesting how to address this situation. Listen below: Read mentary this paring our current situation with one 50 years ago in Cuba. ...
The Idle Rich
Over at his blog, Peter Boettke writes, “The idle rich are never really idle in a free market economy.” Now while we might want to distinguish between the rich and their riches, could it be that even in their consumption, conspicuous or otherwise, the rich are contributing to a rising tide that lifts all boats? Wesley Gant makes that related case over at Values & Capitalism: “Is It Possible to Waste Money?” Gant seems to conclude that it isn’t possible...
Roadmap Out Of The Nihilistic Void
In a gutsy, thoughtful article attheAmerican Thinker , Danusha V. Goska describes her intellectual journey from a family of card-carrying Communists to discovering she wanted to spend time with people “building, cultivating, and establishing, something that they loved.” There’s a lot to mull over in Goska’s piece, but it was her discovery of a moral and religious framework that struck me. Rather than a “nihilistic void” that had been her life, Goska encountered people whose faith informed their actions in...
Get a Free Rental of ‘The Economy of Creative Service’
For the Life of the World: Letters to the Exilesisa 7-part series from the Acton Institute that seeks to examine the bigger picture of Christianity’s role in culture, society, and the world. Each Monday — from July 7 to August 18 — The Gospel Coalition (TGC) ishighlighting one episode and sharing an exclusive codefor for a free 72-hour rental of the full episode. Here’s the trailer for episode 3, The Economy of Creative Service. Visit TGC to get the code...
How to Understand Snowpiercer
Snowpiercer is the most political film of the year. And likely to be one of the most misunderstood. Snowpiercer is also very weird, which you’d probably expect from a South Korean sci-fi post-apocalyptic action film based on a French graphic novel that stars Chris Evans (Captain America) and Tilda Swinton (The Chronicles of Narnia). The basic plot of the movie is that in 2014, an experiment to counteract global warming (which is based on a real plan) causes an ice...
Religious Left Takes Vow of Silence on Left-Wing ‘Dark Money’
When es to political and lobbying spending, it’s a mixed-up, muddled-up, shook-up world, to quote the Kinks’ Ray Davies. Leftist organizations such as the Center for Political Accountability, the Interfaith Center for Corporate Responsibility, and As You Sow seemingly check the closets and under the beds each night to ensure corporations aren’t exercising their First Amendment rights to freely engage in the political process. These shareholder activist groups work together and individually to stifle corporate speech by submitting proxy resolutions...
For the Good of Mankind, Side With the Consumer
Should we always take the side of the individual consumer? That’s the question Rod Dreher asks in a recent post on “Amazon and the Cost of Consumerism.” It’s a good question, one that people have been asking for centuries. The best answer that has been provided—as is usually the case when es to economic questions—was provided by the nineteenth-century French journalist Frédéric Bastiat. Bastiat argues, rather brilliantly, that, consumption is the great end and purpose of political economy; that good...
Skirting The Law: Five U.S. Territories Now Exempt From Obamacare
Last week was a busy one, news-wise, and this may have slipped by you. Suddenly, 4.5 million people in the 5 U.S. territories (American Somoa, Guam, Northern Mariana Islands, Puerto Rico and the U.S. Virgin Islands) are now exempt from Obamacare. Just like that. What’s the story? Obamacare costs too darn much, and insurance providers were fleeing the U.S. territories, leaving many without insurance or at least affordable insurance. These territories have spent the last two years begging to get...
The Economics Of Sex
Economics, at first glance, doesn’t seem very…well…sexy. It’s all about numbers, right? How the stock market is doing, how much people are willing to spend on stuff they need or want, whether or not people have jobs. That’s economics, right? As the Rev. Robert Sirico is fond of saying, economics is fundamentally about human action. If this is true, then economics applies to sexual activity as well. In the following video (from the Austin Institute), today’s sexual landscape is examined...
Related Classification
Copyright 2023-2025 - www.mreligion.com All Rights Reserved