Adam Smith Institute

Unfair Trade argues that for all its good intentions, Fairtrade is not fair. Firstly, by guaranteeing certified farmers a minimum price for their goods, it can distort local markets leaving other farmers even worse off. Secondly, only about 10 percent of the premium paid by consumers actually makes it to the producer, which makes it an inefficient way of helping the poor. Most importantly, Fairtrade does little to aid economic development, focusing instead on sustaining farmers in their current state. Although helpful to some in the short term, this holds back mechanization, diversification, and moves up the value chain. And by requiring farmers to form co-operatives, Fairtrade rules reduce opportunities for labourers to get full-time, permanent jobs and can foster corruption. The report also details the range of alternatives available to ethical consumers, which may be better options than Fairtrade.

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