Home
/
RELIGION & LIBERTY ONLINE
/
Acton University: Why Fair Trade isn’t fair
Acton University: Why Fair Trade isn’t fair
Mar 15, 2026 11:45 AM

Imagine: You are in the grocery store, searching for the perfect bag of coffee- not too expensive, but still rich in flavor and good quality. As you are turning away with the coffee you have just chosen, there on the shelf is a bag of coffee with the Fair Trade logo. After an intense internal debate, you return the first bag of coffee to its shelf and take the Fair Trade coffee with a sense of contentment. The coffee farmers in third world countries are a little better off today because of your purchase. Right?

Economist Victor Claar shed light on this question in his talk at Acton University. He analyzed the stated purposes of Fair Trade, the state of Fair Trade today, and the results of the Fair Trade initiative. He began the lecture by explaining the coffee market to a classroom that included economists, an African coffee farmer, and other good-hearted citizens.

The economic decision associated with choosing coffee plants requires considerations of risk and reward, particularly for farmers of third world nations. As Claar explained, arabica coffee beans brew the best coffee and are thus favored by customers. Although they are more profitable for farmers to grow, they represent an economic risk, particularly for third world farmers. Arabica plants take several years to mature and are delicate and easily damaged.

In addition, coffee farmers face an even higher element of risk, one they cannot control: the wrath of Mother Nature. Claar explained in his lecture that “there are four reasons for a spike in the coffee market: One, bad weather in South America. Two, bad weather in South America. Three, bad weather in South America. And four, you guessed it, bad weather in South America.” The volatility of the coffee market means that many third world farmers rely heavily on a steady climate to determine the success or destruction of that year’s crop.

Given these factors, the Fair Trade initiative, which provides small-scale coffee farmers with direct access to the world market, seems to be a productive and charitable idea. Yet the World Fair Trade Organization is not all it seems to be.

Prior to the second half of the twentieth century, Brazil was the only major producer of coffee beans. The country used valorization to make a greater profit: the Brazilian government would burn a percentage of the crop in order to raise the prices of the heavily-demanded product. In the 1950s, Colombia emerged as a petitor in the coffee market. By the 1960s, enough nations were entering the coffee market, and employing destructive measures to make economic profit, that the United Nations intervened with the International Coffee Agreement of 1962. The ICA introduced maximum production ceiling for coffee for each participant country. Although the ICA has been ratified six times since its conception, Claar argued that, the Agreement essentially collapsed in the 1990s.

In the wake of the ICA, the World Fair Trade Organization appeared. Under the guise of a benevolent savior of the poverty-stricken coffee famers of the world, Fair Trade has been, in reality, a series of attempts to keep the poor farmers of third world nations in poverty.

There are several Fair Trade secrets that Claar employed to support this claim. Even “unfair” coffee may originate from Fair Trade farms. Some coffee bags and products e from Fair Trade farms do not have the logo to identify them.

Ironically, majority of Fair Trade es from wealthy nations, because they are able to pay the fees and make a profit to grow their farms. Fair Trade gives their suppliers an average of an extra $0.20 on the global average purchase price, but it is costly to join, and remain a member of, the Fair Trade network. The Fair Trade minimum that kicks in when the market bottoms out is just barely enough to pay the dues, but not enough to bring families out of poverty. This is where the World Fair Trade Organization truly does the opposite of what it is meant to do. Farmers on the poverty line make just enough money to remain a part of the network, but the annual Fair Trade fees keep the poor in poverty.

The initiative also utilizes social capital to further their profit. Fair Trade recognizes that, if they portray themselves as a charitable organization that helps pluck poor farmers out of destitution, the charity of the human heart will encourage coffee drinkers to buy products with the Fair Trade logo. The consumers will see this purchase as more than a cup of coffee, but an act of justice or charity aiding the poor farmers.

So what can we possibly do? Claar’s solution for the Acton University attendees is simple: when you find yourself in the coffee aisle, buy the brew you like best and that fits your budget. This conclusion was supported by an African coffee farmer who was an attendee of the lecture. The gentleman thanked Claar for revealing the truths about Fair Trade, stating that the hard working farmers of the world need the support of individuals around the world to buy their products. Organizations like Fair Trade do more harm than good for hard working farmers around the globe. So the next time you find yourself at the store for your next cuppa’ joe, follow both your heart and your wallet to find your favorite brew.

(Photo source: )

Comments
Welcome to mreligion comments! Please keep conversations courteous and on-topic. To fosterproductive and respectful conversations, you may see comments from our Community Managers.
Sign up to post
Sort by
Show More Comments
RELIGION & LIBERTY ONLINE
Health Care and Veterans
Ray Nothstine, Associate Editor at the Acton Institute, had his Acton Commentary, “Veterans First on Heath Care” republished by The Citizen, a newspaper in Fayetteville, Georgia. Nothstine explains in the article that the federal government needs to prove that it can provide adequate health care for 8 million veterans before we can trust them to provide health care reform for the entire United States. Nothstine points out flaws with medical system operated by the Veterans Administration. It is a timely...
Caritas in Veritate: Schmiesing and Jayabalan Radio Interviews
Kevin Schmiesing, research fellow at the Acton Institute, was interviewed by Ave Maria Radio recently on Caritas in Veritate. Schmiesing explains how the idea of human development and progress figure as central themes of the encyclical. It is important to remember that our ethical advancement must be ahead of material human development, and our ethics must be paired with our personal development. Furthermore, Schmiesing explains that Caritas in Veritate warns against an all passing role for the state. [audio: Kishore...
Caritas in Veritate: Jayabalan and Gregg Radio Interviews
Kishore Jayabalan, director of Istituto Acton (the Acton Institute’s Rome office), was interviewed by Vatican Radio concerning the authentic human development concerns of the whole person, which is a topic discussed in Caritas in Veritate. Jayabalan discussed how development schemes throughout the world should look at the aspirations of each individual person. Furthermore, in Caritas in Veritate there is a mention of a “breathing space” used a few times in the encyclical. This breathing space aspect means developing a vibrant...
Acton Commentary: The Pope, the Rabbi, and the Moral Economy
In mentary, “The Pope, the Rabbi, and the Moral Economy,” Samuel pares recent statements by Britain’s Chief Rabbi, Lord Jonathan Sacks, and Pope Benedict XVI, on the market economy and other social questions. “Benedict and Sacks rigorously deny that markets are intrinsically flawed,” Gregg writes. “Each also maintains that there are fundamental limits to state power. They do, however, insist that morality’s ultimate e from neither state nor market.” Gregg demonstrates the parallels between Pope Benedict XVI’s Caritas in Veritate...
Card Check Gets Checked at the Senate’s Doors
This morning, the New York Times reported that a broad bipartisan effort of senators convinced Democratic leadership to drop provisions in the Employee Free Choice Act (EFCA) that would have weakened the right of workers to hold secret ballot elections to determine whether or not they would unionize. EFCA had e known by many of its opponents as the “card check bill” because of its central proposal: if over half of workers at a firm signed cards authorizing a union...
Townhall: Jayabalan Talks About Caritas in Veritate
Kathryn Lopez, editor of National Review Online, has a column on Caritas in Veritate titled, “Liberal Catholics Can’t Handle the Truth.” Lopez looks at mentary on Caritas in Veritate, especially by the left, and shows why the encyclical should not be politicized. The encyclical is about truth, which can not be bent to advance a political agenda, she asserts. Kishore Jayabalan, director of Acton’s Rome office, was also quoted in Lopez’s article: Neither side . . . seems ready to...
Academic Journals in the ‘Network’ Economy
John Hartley, the founder and editor of the International Journal of Cultural Studies, does for that journal something like what I did for the Journal of Markets & Morality awhile back. He takes his experience as an editor to reflect on the current state of the scholarly journal amid the challenges and opportunities in the digital age. Hartley opens his study, “Lament for a Lost Running Order? Obsolescence and Academic Journals,” by concluding that “the academic journal is obsolete,” at...
Lord Griffiths on Caritas in Veritate: Pope is the man on the money
Commenting on how Pope Benedict XVI addressed the economic crisis and development challenges in “Caritas in Veritate” is Lord Brian Griffiths of Fforestfach, a member of the British House of Lords and Vice-Chairman of Goldman Sachs International. He has served in an advisory capacity to the Acton Institute and delivered published papers on globalization and Third World development at the Institute’s international conferences. Click here for the original article appearing in The Times. July 13, 2009 The Times Pope Benedict...
Health Care is More Important than Class Warfare, America!
“I vote for Democrats for one primary reason. They raise taxes on the rich.” So says Michael Sean Winters at In All Things, the blog of the contributors to America Magazine. Of course, most Americans, perhaps even Mr. Winter, generally need excuses to raise taxes on the rich. The hottest reason at the moment is to pay for universal health care coverage. Winter likes this reason. If passed, he says that it will be the “first outstanding example of a...
Primacy of Culture in Caritas in Veritate
Zenit published my article on the pope’s new social encyclical: Encyclical Offers Opportunity to “Think With the Church” By Jennifer Roback Morse SAN MARCOS, California, JULY 17, 2009 (Zenit.org).- Benedict XVI’s “Caritas in Veritate” is his contribution to the course of Catholic social teaching. mentators seem to read this document as if it were a think-tank white paper, and ask whether the Pope endorses their particular policy preferences. I must say that I surprised myself by not reflexively reading it...
Related Classification
Copyright 2023-2026 - www.mreligion.com All Rights Reserved