Home
/
RELIGION & LIBERTY ONLINE
/
Acton University: Why Fair Trade isn’t fair
Acton University: Why Fair Trade isn’t fair
Jan 1, 2026 6:47 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
Conservative pushback on free market principles can be traced to big government cronyism
Are conservatives abandoning the free-market movement? Has the rise of populism changed the axis of American politics by convincing the political right to embrace neo-mercantilism? These are questions that many are asking, and if you want to understand where the culture is heading, it is best to start here. Exit polls during the presidential election of 2016 showed that Donald Trump’s victory in the Rust Belt pointed to a political realignment in the United States. Suspicious of free-market ideas, politically...
Socialism’s three-legged stool: Envy, ignorance, and faith
When democratic socialists were asked what they would build in place of Amazon’s HQ2 now that Alexandria Ocasio-Cortez had chased it out of Queens, the response was “a guillotine.” That reply, contained in an insightful and in-depth portrait of young socialists in New York magazine, perfectly illustrates the difference between the worldview of secular collectivists and those who believe in the free market. One may take from Simon van Zuylen-Wood’s thorough essay that today’s socialism is built on the three-legged...
80% of the globe is ‘religious restricted’: UN hearing
Freedom of religion is denied in much of the world, according to the U.S. ambassador for religious freedom. And a United mittee of NGOs dedicated to religious liberty has called the UN to protect the most fundamental freedom. “Eighty percent of the world’s population lives in a religiously restricted atmosphere,” Sam Brownback told mittee. “Eighty percent of the world is religious. How can we tolerate this continuing situation?” He recounted harrowing tales of persecution that he had personally witnessed, especially...
Tyler Cowen finds economic answers in ‘Genesis’
Tyler Cowen, professor of economics at George Mason University and all around internet impresario, has a new column up at Bloomberg on his recent rereading of the Book of Genesis, Living standards rise throughout the book, and by the end we see the marvels of Egyptiancivilization, as experienced and advised by Joseph. The Egyptians have advanced markets in grain, and the logistical and administrative capacities to store grain for up to seven years, helping them to e famine risk (for...
Game of Theories: The Keynesians
Note: This is post #113 in a weekly video series on basic economics. “One point of contention among economists is the causes of business cycles and recessions,” says economist Tyler Cowen. “And if you disagree on the causes, chances are that you disagree on the solutions.” In this next section from the Marginal Revolution University video series, we’ll look at some of the major business cycle theories—Keynesian, Monetarist, Real Business Cycle, and Austrian—and what their proponents think we ought to...
6 Quotes: P. J. O’Rourke on government and politicians
On Thursday, the Acton Institute will be hosting an Evening in Chicago with P. J. O’Rourke. In honor of the event, here are six quotes on government and politicians by the best-selling author and beloved political satirist: On politicians: “A politician is anyone who asks individuals to surrender part of their liberty—their power and privilege—to State, Masses, Mankind, Planet Earth, or whatever. This state, those masses, that mankind, and the planet will then be run by . . . politicians.”...
Pope Francis: Pray before giving
Would we toss coins at Jesus lying in the street gutter? And how would we, likewise, hold ourselves accountable when serving a noble or princely figure? That is who the poor are and whom we discover in prayer as we discern best how to serve them. We then treat them literally like royalty, as they are“permeated by the presence of Jesus”, Francis says. Read More… In a private audience Francis had yesterday withSt. Peter’s Circle, a social action group serving...
How to talk and listen towards a free and virtuous society
Reading Dylan Pahman’s recent piece, Don’t write off young ‘socialists’, got me thinking about talking and listening. We all talk and listen, with varying degrees of success, every day. Most of the time I do each well enough to muddle through learning something from others while imparting some sliver of wisdom in between boisterous declarations of my opinions and preferences. It’s a work in progress but a vitally important one in that, “A wise man will hear, and will increase...
Don’t write off young ‘socialists’
In his State of the Union address this year, president Trump warned of the dangers of socialism. But is there any substance to that worry? Rep. Ocasio-Cortez (D-NY), a self-declared socialist, has made headlines with her Green New Deal proposal. And more recently, Sen. Bernie Sanders (I-VT), who identifies as a democratic socialist, announced he will again be running for the democratic nomination for president. So perhaps we shouldn’t write off the president’s rhetoric as just a call back to...
Christian action in God’s world
This week’s Acton Commentary is adapted from a foreword to a new volume by Acton research fellow Anthony B. Bradley, Faith in Society: 13 Profiles of Christians Adding Value to the Modern World. The focus of this book is on Christians who are working out of their faith convictions in the world, not only in the context of secular institutions and environments, but especially in institutions that are animated by Christian values and identity. In this Abraham Kuyper stands as...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved