I notice that my boss, Tony Payne, has rather cheekily placed a post about the latest Southern Cross (on Fair Trade coffee) on the Sola Panel blog.

So now your only dilemma is whether to discuss it there or here!

As is my usual practice I will just post everywhere.

Update: It’s a lively discussion, and Tony has just bought back into it with a comment. He pulls no punches on this one, although he is his usual courteous self.

A nice discussion! Some good points made both for and against… too good. I feel like I need an economics degree to have an opinion on this one now.

BTW - the articles were NOT about fair trade coffee. I was intentionally looking at the issues far wider than either ‘fair trade’ or ‘coffee’ because I was well aware of the vex debate around Fairtrade certification.

I have read the main fair trade criticisms of Fairtrade.

In my view there are multiple varieties of Fairtrade.

The missionaries directly sourcing ‘gifts, clothes’ etc from Christian-based employment programs is on a completely different scale to Fairtrade-certified coffee. It far more clearly and directly about loving one’s neighbour.

In the article I looked at chocolate and cotton production in depth.

The issue with chocolate (coca production) is child slavery. The best solution is not fair trade per se but to encourage the Australian manufacturers to use slave-free coca. This has nothing to do with Fairtrade certification.

The issue with cotton is more about sustainability due to pesticides corrupting water supplies. ‘Fair trade’-style community development can help address this issue through funding new clean wells for local villages.

To narrow the discussion to Fairtrade coffee is misleading and unhelpful.

The PTC blog has a succinct rebuttal to certain economic biases of the Sola piece.

EG:

Surely when people “serve Christ in love” they will seek the best for their neighbour, and to fail to be concerned for the poor and do what we can to improve their lot is to fall short of God’s expectations of his people. John Dickson’s exposition of James at Katoomba Easter Convention made this point very clearly (I commented on that at the time).

I was there, and after coming back from that Easter convention to hear the “free market” being touted as the answer to many social ills… well, as long as that free market is guided by the iron fist of my greenie welfare state, I guess some bits of it can be free. ;-)

(Like, I don’t care what flavour coffee bean you drink as long as it’s grown in a Vertical Farm inside the city limits, because nature’s been locked off, OK? Just like in Aeon Flux...)

Hi all,

I have been thinking about the ethics involved in purchasing ‘free-trade’ coffee for some time also. I am unfortunately not as aware of the way the coffee industry works… but I have seen several documentaries about the diamond industry, and I suspect it may be similar.

I think a solution to these issues has to be all ethical, economical and practical. Striking the balance of all of these seems to be hardest thing in implementing a solid stance.

Nevertheless, I am at a point where I am most definitely NOT going to spend copious amounts of money on a piece of rock from the ground when those sent to find it are treated so poorly. It just doesn’t make sense.
And that often poses the question… well… what about your spouse?! How might she feel etc? And these are the hard issues we have to deal with… no matter what ethical issues we are discussing.

-----

In regards to coffee, or even other things such as fancy branded clothing… I would most certainly like to see how this discussion develops!

IC
Alwin

One of the best reasons for choosing Freetrade coffee is it usually heaps tasty. Compared to similarly priced non-free trade coffee it is at least equal.
IMO at least.

Alwin&Owen;,

Not meaning to be nitpicky but do you guys mean “fair trade” or “free trade” in the above posts. I’m confused as to wether you are praising fair trade coffee or are making a witty comment and calling the regular stuff “free.” Free trade coffee certainly sounds like the product of the so-called “free market.”

Hey Beth
I mean Fair trade
I get Scarborough Fair and Oxfam coffee.... yum

Me too! Scarborogh Fair is the best! Clipper does a great fairtrade organic coffee too.

McDonalds and Starbucks seem to be seeding the Rainforest Alliance project - competition to Fair Trade it seems

Those trees must be pretty clever but, uprooting themselves and bunching together to form an alliance

My apologies…

I did mean ‘fair-trade’. My bad

By the way, I have had a relatively quick glance at TP’s article, and I think I understand where he is coming from.

From what I gathered from his article, he seems to be saying that although fair-trade and other good social action type things are positive aspects of a Christian life; he is voicing a concern that we don’t lose focus on the main aim of the ultimate purpose… that is

“To glorify God by proclaiming our saviour the Lord Jesus Christ in prayerful dependence on the Holy Spirit...”

I personally quite liked his article as it serves as a good reminder that fair-trade and other social actions whilst good in themselves, should be a means for a greater end.

I think opinions such as these should also be heard as we herald on standing up for the poor, oppressed, elderly, marginalised and the like… as I find this a very healthy reminder.

While at the same time I am also very aware of other big acts in history (such as the abolition of slavery) which has served as means to proclaim the gospel for centuries to come. Take the Amazing Grace movie for example. =)

Who knows?! There could be a movie about fair-trade coffee 300yrs from now! We could call it “A Tasting Waste”

Those of you who have been following this thread and the associated discussion will be interested to see that the last of Tony Payne’s three- parter on social action is now online.

As a result of the level of debate amongst Sydney Anglicans on this issue (esp in Southern Cross and the Sola Panel), I was contacted by an academic researcher in this area from the University of Cardiff.

Given that Tony Payne’s argument against fair trade relied heavily on liberal economic theory, it might be worthwhile reading a different economic perpspective.

So just for everyone’s interest I thought I’d post the letter from this expert (Alastair Smith) to me here:

I just wanted to draw to the attention of those interested in the debate about the appropriateness of Fair Trade as a poverty relief and development tool, to the view put forward in a recent academic publication from the University of Cardiff in the UK.

Although this report is a direct response to another publication (Unfair Trade, published in February 2008 by the Adam Smith Institute in London, which was heavily critical of Fair Trade), it provides an in-depth insight into the issues of trade liberalization versus the case for Fair Trade.

Specifically in response to the idea that Fair Trade retards diversification becasue it neutralizes market incentives by paying a minimum prices, it is argued that despite seeming to offer the necessary incentives, free trade fails to promote diversification by the poor. This is because real life production decision are considerably more complex than liberal economic theory (on which the critique is based) allows.

In particular, the fact that producers are poor often prohibits them from responding to incentives because they lack the resources necessary to develop their businesses or make changes to their livelihood strategies.

How do you diversify into new higher value crops when you can’t afford the food for tomorrow, let alone the new seeds and inputs necessary for diversification?

More intricately, the report develops the idea that production decisions are not
just about gaining the maximum return, but also strongly consider the need to offset future risks to livelihoods. Again, simply put, even if producers know that they can make higher and more stable prices from horticulture (instead of coffee) there is great risk with carrying out this change.

Growing something new is challenging because you don’t know the best techniques (the application of any new technology of any type or level requires ‘creative learning by doing’, and should not be assumed to result in instantly more efficient production), or if new crops will grow in current
soils etc.  All in all there is great risk of loosing what little producers have if new strategies fail, and the same applies to even more extreme forms of diversification for example from agricultural work into say manufacture of some type. A further point is that even if producers were to grow/do something else, the incomplete nature of markets and lack of infrastructure means that even if they can get the inputs, there might not be access markets - technically speaking, there is sequential market failure. Over all, it is argued that in many cases, the rational decision is to stay producing e.g. coffee and accepting the vulnerability of the situation. In this light, it seems inappropriate to expect that free markets will facilitate diversification because when considered from the practical perspective of producers, diversification is much less rational that theories in text books predict.

Conversely, it is argued that Fair Trade makes lives secure by paying a minimum price and offering stable contracts, providing up front credit for production and investment, and paying a social premium that is often invested in business and livelihood development.

While Fair Trade does reduce the difference between returns (which reform will have to deal with) it performs a much more important role by rendering diversification viable in terms of the resources at the disposal of poor agricultural producers.

The key to diversification, on the individual, regional or national level is building the capability of local actors to carry it out. This, the paper argues, is the reason that the USA, Europe, China, India, Taiwan etc have been successful where others have failed; not because they have liberalized, but because their have liberalized after building the economic capability necessary to achieve success in open markets.

In short, this paper suggests that the free market critique of Fair Trade is an overly simplistic way of viewing a very complex situation, and stresses that those seriously concerned with the plight of the poor take a more nuanced approach to understanding the variables that really do limit the benefits of trade for those who are already very disadvantaged.

Alastair Smith (author of the paper)

Alastair M. Smith
Postgraduate Researcher
M.Phil. (oxon), B.A (hons.)

ESRC Centre for Business Relationships,
Accountability, Sustainability and Society (BRASS)

To read the full paper click here and follow the links

Jeremy Halcrow - 17 June 2008 11:22 AM

Given that Tony Payne’s argument against fair trade relied heavily on liberal economic theory, it might be worthwhile reading a different economic perpspective.

In defence of Tony, who is heading GAFCON-ward even as we type, his main argument was theological, and was not directed against fair trade.

It would be a pity if discussion about the economics of fair trade distracted from what Tony was essentially saying, which was (the beginning of) a theological reflection on the link between social action and how we connect with a community.

Although the economic questions are interesting, and no doubt worth pursuing, I believe the issue that really deserves discussion from Tony’s original post is whether Ecclesiastes 3 accurately describes the world we live in.