Sainsbury’s Commits to Fairtrade
But Is It Fair For Everybody
Jim Prevor’s Perishable Pundit, December 13, 2006
Sainsbury’s, the #2 food chain in Britain, has made a commitment to sell only Fairtrade-certified bananas. Fairtrade is not common in the U.S. outside of some coffee marketers, but is very big in the U.K. In fact Sainsbury’s was already selling about 20% of its banana as Fairtrade bananas before this announcement.
Basically, the idea is that retailers will pay extra for produce that has systems set up to make sure that the extra money goes to the growers, laborers and farming community. A new company, Oké USA, was set up in the US this year, a partnership between AgroFair, Equal Exchange and Red Tomato, to bring fair trade bananas to the US.
This is a perfect segue for our conversations about aligned supply chains on food safety. Aligned supply chains can be used to support any goal, from maintaining local open space to food safety to helping labor in developing countries.
Because food is inexpensive for most upper middle class people, they will gladly pay extra to feel better about what they are doing for the world. The Pundit would expect to eventually get a similar announcement from a company such as Whole Foods.
Alas, there is no evidence that net total good in the world is enhanced by these efforts:
Producer organisations will receive a stable price that covers their full costs of production, plus an extra $1 per box of bananas (18 kilos) for investment, which is known as the ‘Fairtrade premium’. As a key part of its commitment to Fairtrade, Sainsbury’s has also strengthened its commitment to maintaining long-term relationships with Fairtrade-certified small-scale farmers in the Windward Islands and the Dominican Republic.
Fairtrade has already proven to be a lifeline for Caribbean banana-growing smallholders after years of declining incomes in the face of cut-throat global competition. Recognising the vital importance of Fairtrade to the whole Windwards Islands’ economies, Dr Kenny D Anthony, Prime Minister of Saint Lucia, has responded to Sainsbury’s announcement saying:
“In this era of competitive global trade, small-scale farmers like ours have little or no chance of survival without the kind of market intervention that is provided through Fairtrade. Not only does Fairtrade guarantee a fair price to our farmers, but the social premium that is generated through the Fairtrade sales provides invaluable support for projects in rural communities throughout the Windward Islands”.
Put another way, the fairtrade program allows people and regions that are not competitive producers of products to keep producing them. This makes people feel good because they can be shown pictures of struggling banana farmers in Saint Lucia and be shown the good the extra money did these people.
Unfortunately, there is no way to show consumers the bananas that will not be produced in some other place and the loss that causes to the economy there. We also can’t show how the premium paid for the Fairtrade product would have been spent, and who has been impoverished, in, say, Bangladesh, because they don’t get a job making whatever it was that would have been bought with the money otherwise.
Publix is the dominant local grocer down at Pundit headquarters, and the company has a more direct and sensible system for helping the world. Right at checkout they have a little display, and anyone who so desires can pick out a tab that says $1, $3 or $5. Throw the tab on the belt and it gets rung up like any other item. At the Pundit household, we always throw one down and are careful to explain to the Jr. Pundits its meaning and significance.
We are all in favor of helping people in a tough world, but that doesn’t mean people don’t have to adjust to a changing planet.
Pundit headquarters is just off Yamato Road in Boca Raton, Florida. Yamato is an ancient name for Japan, and the road is named in honor of a Japanese agricultural colony in this area. The colony did well for awhile producing pineapples for sale in the northeast U.S., but the Florida East Coast Railroad was eventually extended to Key West, so Cuban pineapples could be brought cheaply by boat the short distance to Key West and then on the train north.
The Yamato colony was not viable as a pineapple growing entity.
Sure, if you pay enough we could still be growing pineapples in Boca Raton, but that would make the world poorer, not richer, and keeping banana growers in business who can’t compete does the same.