Organic. Deforestation. Fair Trade. Overproduction. Oh My.

I just got out of a videoconference for the Global Nomads Group, where I discussed Fair Trade with middle and high school students from different parts of the U.S. It involved me answering questions for students from New Jersey, Virginia and Kansas. Oh, the power of technology, it really does blow my mind.

There were some great questions asked and I tried my best to offer my insight on the Fair Trade movement. With about five minutes left to the conference, a student referred to an interesting article she came across from the Economist criticizing the ethical food movement, namely, Organic, Fair Trade and Local.

The student quoted a headline stating "Buy Organic, Destroy the Rainforest" and with five minutes left to the conference, it was difficult to find out more about the article and give a full answer involving Fair Trade. I refuted the claim since with Fair Trade, one of the key principles is that the product is made in a sustainable way that is not harmful to the environment and unfortunately the conversation had to end there.

Curious about what the rest of the article said, I immediately went searching. The article's criticism about organic is misleading as pointed out by U.S. Food Policy blog, but it wasn't Fair Trade they were going after when talking deforestation. The Economist article's argument against Fair Trade was the claim that the Fair Trade system results in overproduction in the coffee market. They stated that the higher price offered by the Fair Trade system (they called it in essence a subsidy) encourages more farmers to enter the market, oversupplying it with coffee, which then "drives down the price of non-Fairtrade coffee even further, making non-Fairtrade farmers poorer".

However, it was the Coffee Crisis of the 1990s, which involved overproduction that Fair Trade sought toremedy. TransFair USA points out that while in theory the higher Fair Trade price would "incent farmers to increase production" in practice, it is just the opposite.  Fair Trade farmers use the money earned from Fair Trade not to increase production, but rather to reinvest in their own communities such as building schools and purchasing equipment to improve crop quality.  They also spend their Fair Trade revenues on crop diversification and income generation projects so they don't have to rely on one crop as they only source of income. Other income generating projects include ecotourism and craft production.

TransFair goes on to say:

Perhaps most importantly, Fair Trade is a voluntary, market-based model of trade: farmers only receive Fair Trade minimum prices and premiums if they have a buyer willing to pay them. Unlike government mandated pricing or subsidies, any producer, company or consumer can opt in or out of Fair Trade. The Fair Trade system enables companies to take advantage of growing consumer demand for sustainable products; that's why over 600 U.S. companies have chosen to participate in the Fair Trade certification system, helping to make Fair Trade the fastest growing segment of the 11 billion dollar specialty coffee industry.

The rest of the Economist article goes on to encourage political activity over consumer action. While I agree that policy initiatives and changing trade agreements can make a change toward helping the environment and producers in developing countries, we can't ignore the purchasing power and choices that we have as consumers to change the global market.