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View Full Version : Max Havelaar : not so fair trade



Maciamo
18-05-09, 00:31
There has been a huge proliferation of so-called "faire trade" products in supermarkets in the past few years. Their most famous label is Max Havelaar, which you can see mostly on bananas, coffee, tea, chocolate, rice and flowers from South America.

The principle is simple: buy produce directly from the small producers to avoid that a big part of their profit be taken by middlemen.

Here is why it doesn't work. Big distribution and retailing companies choose the cheapest final product (e.g. a chocolate bar) to sell in supermarkets, because it makes sense from a marketing point of view : cheaper price = more sales. This forces manufacturers to reduce their prices to remain competitive. To achieve this, they will buy cocoa beans from the cheapest importer, who will be cheap because they negotiated the lowest price possible from the producers in South America (or Africa or Asia).

In the end, the local producers end up selling at roughly the same price as they would have before to the middlemen, and big supermarkets are the ones that make extra profit by selling at a higher price the same chocolate, but with a label Max Havelaar on it.

Now this doesn't shock me. It's the natural law of the market, and I wouldn't expect anything less to happen. If people are naive enough to spend more money on a label that doesn't mean much, it's their problem.

What bothers me is that the so-called "Fair Trade" products are always imported from very distant developing countries, and never produced in Europe. This is disturbing for two reasons :

1) flying roses all the way from Ecuador to sell them in Europe at roughly the same price as those produced in Europe (because of the transportation cost) only worsen global warming. I guess it's ok for bananas and cocoa beans because they can't be grown in temperate climates. But flowers !?

2) I can't agree with a "faire trade" label that penalises local producers in Europe. Carrefour now sells fair trade flowers from South America when they could buy them from French (or other European) flower growers. That is outrageously not fair trade, because these big chains have actual power to seriously damage the European production by turning their back on their own country.

Conclusion : don't buy any fair trade product that can be locally produced. Or don't buy fair trade at all, because despite its good intentions it has (already !) become close to meaningless.

TheCaptain
18-05-09, 20:43
The principle is simple: buy produce directly from the small producers to avoid that a big part of their profit be taken by middlemen.

As far as i understand it, the idea behind "fair trade" is that the farmers get a decent wage, have better working conditions, don't use child labour etc. So the poor lady who picked your bananas in Panama is better paid, and that is the main reason why fair trade products are more expensive. So European importers for instance, won't just buy the cheapest bananas they can find (as you said) in South America, but only from producers who pay their workers and farmers well.

That's how I understand "fair trade", but maybe I'm wrong. :)




1) flying roses all the way from Ecuador to sell them in Europe at roughly the same price as those produced in Europe (because of the transportation cost) only worsen global warming. I guess it's ok for bananas and cocoa beans because they can't be grown in temperate climates. But flowers !?

Buying "climate friendly" products is actually more complicated than that.

In many cases, local products worsen global warming MORE than imported ones. For instance, in Denmark, it's better to buy Spanish tomatoes than Danish. The reason is that Danish (and other Northern European) tomatoes are grown in greenhouses which are heated most of the year. Obviously, this requires a lot of energy, so buying tomatoes transported from Spain on a truck is actually better for the climate. The same is true for cucumbers, peppers etc.



2) I can't agree with a "faire trade" label that penalises local producers in Europe. Carrefour now sells fair trade flowers from South America when they could buy them from French (or other European) flower growers. That is outrageously not fair trade, because these big chains have actual power to seriously damage the European production by turning their back on their own country.


Oh no, protectionism :(

If people think that South Americans flowers are better or more beautiful than French ones, let them buy those! Personally, I support free trade both inside and outside the EU, and for example, I don't care if the apples I buy are from Denmark or Argentina. If the Argentinian apples taste better, I will buy them.

Trading with third world countries is the best way we can help them, and protectionism is always a BAD idea (the EU agricultural subsidies are a disgrace :mad:)

Maciamo
22-05-09, 21:44
Buying "climate friendly" products is actually more complicated than that.

In many cases, local products worsen global warming MORE than imported ones. For instance, in Denmark, it's better to buy Spanish tomatoes than Danish. The reason is that Danish (and other Northern European) tomatoes are grown in greenhouses which are heated most of the year. Obviously, this requires a lot of energy, so buying tomatoes transported from Spain on a truck is actually better for the climate. The same is true for cucumbers, peppers etc.

Well, that would depend on the season. You can buy Danish tomatoes in summer, but Spanish ones in Spring and Autumn. In winter even Spanish tomatoes will come from heated greenhouses.



Oh no, protectionism :(

If people think that South Americans flowers are better or more beautiful than French ones, let them buy those! Personally, I support free trade both inside and outside the EU, and for example, I don't care if the apples I buy are from Denmark or Argentina. If the Argentinian apples taste better, I will buy them.

Buying local agricultural products isn't protectionism. Protectionism would be setting high taxes on foreign imports. In this case what I am saying is buy your roses or tulips from local growers rather than those imported from far away. Of course if they have different varieties of flowers (e.g. tropical) in South America that can't be grown easily in Europe or are better quality over there, then there is no issue. But why by Chinese apples in summer when there are plenty of European ones ? If it's just because they are a bit cheaper, think about the impact of transportation on the environment, and think about the local economy too.



Trading with third world countries is the best way we can help them, and protectionism is always a BAD idea (the EU agricultural subsidies are a disgrace :mad:)

As long as they don't specialise in producing food or flowers that can be grown in Europe. I buy tropical fruits from tropical countries, but I won't buy plums and pears from them, even if they are cheaper.