How Fair Trade Hurts Everyone from International Policy to Your Plate

How Fair Trade Hurts Everyone from International Policy to Your Plate

by Aditya Bindal and Charles Johnson

Fair trade is everywhere on campus. Valentine’s Day was no exception.

Valentine's Day this year came with guilt free, “ethical” chocolate. Apparently, our sweet and chocolaty desires fueled a civil war in the Ivory Coast. The fliers advertised “conflict-free” chocolate. Valentine’s Day candies encourage us to make trade “ethical.”

At the Claremont Colleges, fair trade is nothing new. All of the dining halls boast their local, organic, and fresh produce and fair trade coffee

These measures seek to solve the world’s problems at once: global warming, hunger, poverty, civil war – you name it. The buzz words ‘Locally Grown’, ‘Organic’ ‘Fresh’ and of course, ‘Fair Trade’ are bandied about interchangeably. But what exactly do they mean? Why should we embrace Fair Trade?

To answer this question, we headed to the bastion of progressivism – the Motley. The Motley, run by Scripps students since 1974, seeks “an ongoing process of empowering change.”

But just what kind of change?

The Motley, an “alternative space,” “open and welcoming to all,” seeks to serve its community, according to its mission statement. To achieve that goal, they support “fair trade.” A sticker from Oxfam on the refrigerator encourages customers to “make trade fair.”

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What’s wrong with trade as it is?

Motley Manager, Sophie Herron ’08 started by defining free trade for us: “free trade is based on free and unrestricted trade between countries with as low barriers, tariffs and overheads as possible. This means that in countries where the economy is not good, workers are not paid a reasonable wage.”

Ms. Herron then told us about all of the efforts to buy locally-grown produce.

The local, in her eyes, is better. When it can, the Motley buys locally, but coffee and chocolate aren’t typically grown in Southern California. For that, you need fair trade.

“Fair trade,” Herron explained, “is when trade is fair because the people providing the goods are receiving wages that they can afford to live on and support their community.”

A paradox lies at the heart of her definition: buying locally means not buying from poor farmers abroad, whose income the Motley seeks to raise. And yet, paying those workers more for their produce creates surpluses in the market and drives down prices.

Think about a factory worker in Vietnam, the country that produces the most coffee after Brazil. If coffee farmers get paid higher wages, more people will want to produce coffee, including the factory worker. Suddenly, everyone starts producing coffee. The cost per bean plummets as the cost for other goods climbs. If everyone is making coffee because it pays the most, who will grow bananas, teach schoolchildren, or work in the factories? The large coffee companies don’t mind. After all, a flooded market is to their advantage. They can have their pick of cheaper beans. Unfortunately Vietnamese farmers, thinking that their coffee prices will climb, don’t often plant other food on their tiny plots of land. The results can be starvation as no one can eat the coffee bean.

NGOs demanded a higher price for bananas to help raise the cost of living for the Guatemala banana producers and ended up encouraging the banana companies to relocate to Ecuador, where wages were lower.

Why do so many continue calling for more fair trade? For businesses, the results can be enticing.

The Organic, Local, Fresh, Fair-Trade buzz has been on the rise lately. Businesses that cater to this food trendiness can often make big bucks and say to be promoting “corporate social responsibility.”

David Janosky, Sodexo General Manager of Dining and Catering Services, endorsed this path soon after his arrival at Pomona in 2001. He explains that Sodexo was simply “responding to demand.” Demand, Pomona students certainly did. The ASPC Senate Progress Report for 2003-2004 (Volume I) planned “negotiations with Dining Services for more organics/fair-trade coffee.”

Student government, particularly Pomona’s, has been leading the charge for fair trade products. In 2005, TSL writer Terra Bennett gushed that Pomona students Katie Jones ’07 and Stephanie Corey deserve “[Pomona’s] congratulations” for convincing the dining halls to introduce fair trade coffee.

Although Janosky said that he doesn’t think Pomona’s student government is trying to “re-negotiate anything with Sodexo,” Environmental Affairs Commissioner Kyle Edgerton ‘08 believes just the opposite. In November 30, 2007 article about Sodexo choosing local produce, he said that the dining hall changed its policies as soon as ASPC President Elspeth Hilton ’08 “put the challenge to Sodexo.”

Now that they know fair trade hurts the people it is intended to help, maybe Pomona students ought to put the challenge to their own student government.

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Back at the Motley, Herron described how managers decide what policies to pursue. Most businesses, such as Sodexo, respond to customer demands if the costs aren’t too prohibitive, but the Motley, a non-profit, uses its platform to promote its politics.

The management, for example, decided to stop selling Vitamin Water and Naked Juice after they were acquired by Coca Cola and Pepsi Co, respectively. The transaction meant that these products could not be sold on campus since the two giants were obviously not family-owned or local, fresh, organic and fair.

The students, on the other hand, liked these two products. “We try to take the customer in our community really seriously,” says Herron. “They are one of the main things we are thinking really seriously about.”

As well they should. After all, the Motley is subsidized by both the federal government and Scripps College. The Motley is under the Scripps tax code, which means that it does not pay any taxes. The Federal Work Study program also helps defray the cost of workers. The Motley employs 52 people, including twelve student managers. Almost ninety percent of workers are on work study, according to Herron.

These advantages mean that they can undercut local coffee shops, like the Starbucks on Yale Ave. At Starbucks, employees are hired based upon sales. The more profitable the Starbucks, the more workers it can hire. Of course it isn’t easy to be profitable when you have to pay taxes and compete with the subsidized, tax-exempt Motley, but Starbucks seems to be doing well for itself. They have between fifteen and twenty employees, despite rents, taxes, and heavier traffic and a wider range of products.

Maybe that’s why starting Starbucks employees make $8.50 an hour compared to only $8.00 an hour for students who start on Work Study. Starbucks offers more benefits, too. At Starbucks, if you work more than twenty hours a week, you get twenty hours of paid vacation as well as full benefits, including vision, and dental. Starbucks, which must compete with other coffee shops for the best barista must have competitive wages. After all they don’t get tax exemptions or subsidies.

So why are these establishments willing to spend more money for fresh, organic, local and fair produce? That these policies do good, remains unchallenged on campus. Indeed, it is being celebrated in Pomona’s The Student Life. However, renowned think tanks such as The Cato Institute and Reason Foundation have this essential goodness predicting their eventual doom. (James Bovard, author of The Fair Trade Fraud, predicted this in 1992.)

But ensuring whether or not these policies help people is beyond the Motley’s means.

As Sophie Herron of the Motley concedes, “We have no way of verifying whether the trade is actually fair.”

She’s right. It’s nearly impossible to monitor these activities, especially with such large degrees of separation between us and the actual producers in the global coffee market. If there is no way to verify whether or not fair trade works, why conclude that free trade doesn’t work? The same degrees of separation should apply.

Why replace tried and tested economic models for something that has no concrete evidence? After all, Free Trade, not Fair Trade liberated millions from poverty in Asia. Fair trade hurts from Vietnam to Venezuela to your community and your plate.

A condensed version of this article will appear in The Claremont Independent.

Honest Political Dialogue? Surely You Jest, TSL

The Student Life's opinion page is always worthy of reading, if only for comic relief. Riddle with bias, it ought to consider renaming itself The Pravda Life. The only distinction I can find between the two papers is the quality of the paper itself.

As I make clear on this blog whenever the issue comes to print, that bias often that bias creeps into its news columns. But let's be clear that its original home is on the opinion page.

Let's see how they cover "politics" are the Claremont Colleges this season. Do they even attempt to find a Republican, libertarian, conservative, or moderate voice to write on campus issues? Don't count on it.

Here are the lowlights of this issue.

• An article entitled, "Campus caucus," which tries to make the case that Rock the Vote is a credible group that ought to promote "education."
  
• An unfunny and unoriginal satire about Republicans by Ben Conway.

But the crown jewel of the issue is clearly the editorial. They tried to make the case that Pomona has a political problem because the slightly less socialist candidate's fliers were torn down. Here's what they had to say.

That such an act of sabotage occurs on this college campus is a sad commentary on the maturity of the political dialogue that occurs here. It denies the legitimacy of supporting Hillary Clinton, something with a variety of serious implications. The incident suggests bigotry. It suggests intolerance. It suggests sexism. Each suggestion is as disturbing as the next, but reveals a disturbing undercurrent among Pomona students. Students must not feel pressure to toe the line of majority viewpoints on campus. While subtle, many students have voiced the opinion that there is a pressure to conform to certain “accepted” liberal ideals. For a school claiming to stress freedom of speech and liberty of opinion, this incident should force us to take a step back and examine ourselves. We must never become complacent in working to keep open dialogue, in which numerous viewpoints can speak and feel comfortable.

Memo to The Student Life: It's hardly "subtle" and you lead the charge by distorting your writers' stories, covering things from only one side, and suggesting hate crimes were none exist.

And while we're add it, no one has a right to feel "comfortable." They do have a right to speech, though, but you were critical of that right during the Minutemen and Jacob Hornberger debate.

I ought to be clear. I actually believe in free speech. When will TSL join the real fight for liberty?