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Pundit’s Mailbag —
Fairtrade From A European Perspective

Thought a great thing to do with our last Pundit’s mailbag of 2006 is feature our first letter from outside North America. It is in response to our piece analyzing the concept of “Fairtrade” in the context of J. Sainsbury’s commitment to “Fairtrade” bananas:

I have been reading your Pundit since the start: sometimes I get lost reading it front to back, sometimes no more than a mere glance. My compliments to you for providing substance, thought-provoking opinions and, at the very least, waking up many.

With respect to your Pundit this morning on J Sainsbury’s announcement regarding “fair-trade” in their bananas, might I suggest reading the December 7, 2006 edition of The Economist, “Good Food”?

In it are [several articles] on the merits/challenges of organic-fair trade-food miles and local produce. In my opinion, a valuable contribution in the discussion of the above.

— Marc De Naeyer
Managing Partner
The Netherlands

The Pundit always listens to Marc’s suggestions. Maybe it is because of his experience on the PMA board, maybe because he has great pictures, mostly though it is because we would never cross his mother-in-law, Claire Thornton, who, among many other things, hosted Fresh Ideas, a television show on the Family Channel sponsored by Dole and Sunkist.

Seriously, Marc has a lively intellect and, in pointing us to the noted British publication (it calls itself a newspaper but looks like a magazine), he is finding a view not unsympathetic to the Pundit’s. As the article states:

Fairtrade food is designed to raise poor farmers’ incomes. It is sold at a higher price than ordinary food, with a subsidy passed back to the farmer. But prices of agricultural commodities are low because of overproduction. By propping up the price, the Fairtrade system encourages farmers to produce more of these commodities rather than diversifying into other crops and so depresses prices — thus achieving, for most farmers, exactly the opposite of what the initiative is intended to do.

And since only a small fraction of the mark-up on Fairtrade foods actually goes to the farmer — most goes to the retailer — the system gives rich consumers an inflated impression of their largesse and makes alleviating poverty seem too easy.

What we didn’t deal with but The Economist does is other shibboleths of modern society. Thinking of going organic to be environmentally friendly:

Organic food, which is grown without man-made pesticides and fertilisers, is generally assumed to be more environmentally friendly than conventional intensive farming, which is heavily reliant on chemical inputs. But it all depends what you mean by “environmentally friendly”. Farming is inherently bad for the environment: since humans took it up around 11,000 years ago, the result has been deforestation on a massive scale.

But following the “green revolution” of the 1960s, greater use of chemical fertiliser has tripled grain yields with very little increase in the area of land under cultivation. Organic methods, which rely on crop rotation, manure and compost in place of fertiliser, are far less intensive. So producing the world’s current agricultural output organically would require several times as much land as is currently cultivated. There wouldn’t be much room left for the rainforest.

Or maybe you are just going to buy local food at farmer’s markets to minimize environmental problems due to lengthy transport:

Surely the case for local food, produced as close as possible to the consumer in order to minimise “food miles” and, by extension, carbon emissions, is clear? Surprisingly, it is not. A study of Britain’s food system found that nearly half of food-vehicle miles (i.e., miles travelled by vehicles carrying food) were driven by cars going to and from the shops. Most people live closer to a supermarket than a farmer’s market, so more local food could mean more food-vehicle miles. Moving food around in big, carefully packed lorries, as supermarkets do, may in fact be the most efficient way to transport the stuff.

What’s more, once the energy used in production as well as transport is taken into account, local food may turn out to be even less green. Producing lamb in New Zealand and shipping it to Britain uses less energy than producing British lamb, because farming in New Zealand is less energy-intensive.

Besides, these programs often contradict one another:

And the local-food movement’s aims, of course, contradict those of the Fairtrade movement, by discouraging rich-country consumers from buying poor-country produce. But since the local-food movement looks suspiciously like old-fashioned protectionism masquerading as concern for the environment, helping poor countries is presumably not the point.

At holiday time when charity is on the mind, it is worth remembering that many things that make people feel good are not actually doing any good.

Marc, Vrolijk kerstfeest, and thanks for sending this our way.

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