Private certification schemes are the unsung heroes of a market economy. They are far more effective than state regulation. It is therefore with a heavy heart that I have always had reservations about Fairtrade-labelled products. The foundation pounces on critics with its well-oiled publicity machine, always responding with anecdotes. But doubts remain.
There are many ways in which poor farmers can get better prices. They can do so through speciality brands, via traditional trade channels and using other labelling initiatives. Does Fairtrade help? The evidence is limited, but even proponents of Fairtrade would argue that only about 50 per cent of the extra money spent by consumers is available to spend on social projects, and others have suggested a figure much closer to zero. No clear evidence has been produced to suggest that farmers themselves actually receive higher prices under Fairtrade.
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