Why Pay More for Fairness?

Marks & Spencer, a supermarket and clothing chain with 400 stores throughout Britain, recently announced that it is converting its entire range of coffee and tea, totaling 38 lines, to Fairtrade, a marketing symbol of “ethical production.” The chain already sells only Fairtrade tea and coffee in its 200 Café Revive coffee shops. It is also boosting its purchases of shirts and other goods made with Fairtrade cotton. The announcement came during “Fairtrade Fortnight,” a two-week promotion of Fairtrade products that included speaking tours by farmers from developing countries, telling Britons how Fairtrade has assisted their communities.

The movement toward more ethical consumption has made significant gains in the United States as well, as consumers increasingly turn to organic, locally produced foods, and eggs from hens not kept in cages. In the UK, a survey has found that half of those shown the Fairtrade symbol recognized it and understood that it refers to products that give a better deal for Third World farmers. There is no comparable US research, but related data, and discussions with my own students, suggests that the figure would be much lower.

Traders seeking Fairtrade certification must pay producers a price that covers the costs of sustainable production and provides a living wage. For example, the minimum price for coffee is $1.26 per pound, no matter how low the market price may fall. If the market price rises above that figure, the fair trade price will increase so that it remains five cents per pound higher.

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