Posted by: lidcblog | March 5, 2014

Should I bother paying more for a packet of Fairtrade coffee?

Tea pluckers Uganda

Tea pluckers Uganda,

Every month LIDC and our partners 3ie (International Initiative for Impact Evaluation) organise a seminar under the theme of ‘What works in international development’. The seminar series focuses on methods in impact evaluation and doesn’t always stir controversy, but one evening in January the seminar resulted in a very heated discussion.

Prof. Christopher Cramer and Dr. Deborah Johnston from the Department of Development Studies and the Department of Economics at SOAS, University of London, presented findings from their 4-year DFID-funded project on the impact of Fairtrade certification on the economic situation of wage workers. Drawing on research done with their colleagues Carlos Oya and John Sender, they looked at Fairtrade-certified and non-Fairtrade certified coffee, tea and flower production in Ethiopia and Uganda.

The study found that, contrary to popular belief, rural areas producing commodities for sale in global supermarkets and boutique stores depend on wage employment. The notion of an idyllic countryside where everyone has similar amounts of land and works it together with family members is something of a myth. A high proportion of people in these areas actually work for wages. And these are the very poorest people too, as wages in agriculture are notoriously low and benefits are poor. This doesn’t come as a surprise. Shoppers in Western countries may not know exactly if it is the farmer or the farm worker they’re helping through their consumer choices, but they certainly choose to buy Fairtrade and pay the hefty price tag because they want to improve the lot of those poor people who enable us to enjoy a cup of coffee or tea in London or San Francisco.

But there comes the second shocker. Wage workers employed on Fairtrade-certified plantations, in certified processing stations, or working for certified producers, don’t get paid more than those working on farms producing conventional produce. Quite the contrary, wages are often much lower and benefits less generous in Fairtrade-certified production.

Now, that’s a problem for me as a consumer of coffee and tea in London (I try to stay away from fresh flowers if I can help it). I am prepared, and no doubt so are many of you, to pay a lot more for Fairtrade-certified products. A packet of my favourite Fairtrade coffee costs a fiver in most British supermarkets. That’s a lot of money to pay for my daily caffeine fix, but I do it because I want people in coffee-producing countries to have a better life. If they don’t, why am I spending all this money? If the money doesn’t benefit wage workers, who pockets the difference between Fairtrade coffee and conventional produce?

Well, the research won’t necessarily tell us, at least not this particular study as its objective was different. There could be several explanations for the findings. It’s possible that profits from the higher price of Fairtrade don’t benefit workers, but that they do benefit the producers. If that’s the case, Fairtade certification schemes may want to consider whether the rules for awarding certification should be changed to make sure that agricultural workers get a fair deal alongside their employers. Or it could be that Fairtrade certification schemes target poorer areas of the country where wages were lower than elsewhere to begin with. However, we can’t know if that’s true without establishing a baseline, that is knowing how much workers were earning before the certification came into force.

Either way, it may be too early to dismiss Fairtrade altogether and switch to cheaper coffee with no labels. We don’t know for sure if Fairtrade doesn’t work. What additionally confounds the picture is that Fairtarde-certified products often bear other labels like certified organic, Rainforest Alliance etc. These labels don’t directly address workers’ welfare, but they focus on potentially positive effects on the environment such as protecting forests and the quality of soil. As consumers wanting to ‘make a difference’ we are often lost in that bewildering array of certification schemes. However, as the study from SOAS shows, we simply don’t know enough about the effect our consumer choices have on the poorest people. In the meantime, I continue to buy Fairtrade and hope that one day I will be proven right.

Contributed by Anna Marry, Communications Manager, LIDC

Read more about the seminar

Read more about the Fairtrade project



  1. Great article on the actual impact of fair trade coffee. Instead of buying fair trade coffee I buy coffee that I know is sourced with the farmers interests in mind. There are many third wave roasters that give a premium to farmers based on quality of the beans which I believe incentivizes farmers to have better farming practices.

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