Consumers need to know who benefits from projects supported by the premium they pay

The findings of our research may be disturbing for Fairtrade officials and for ordinary people who hope to make a difference to the plight of poor rural people in developing countries through informed choices about the products they buy.

But how well-informed are the choices that consumers make? Is Fairtrade fair for all involved in the production of tea, coffee and other commodities? The Fairtrade, Employment and Poverty Reduction in Ethiopia and Uganda project set out to improve our understanding of how global trade in agricultural commodities affects the lives of poor rural Africans, especially through wage employment.

Our research took four years and involved a great deal of fieldwork in Africa. We carried out detailed surveys, we collected oral histories, we talked to managers of co-operatives, to owners of flower companies, to traders and government officials, to auditors, to very young children working for wages instead of going to school, to people who had done fairly well out of Fairtrade, and to people who appeared not to have benefited.

It did not come as a huge surprise to us to learn from our data that people who depend for their survival on access to manual agricultural wage employment, often as seasonal or casual labour, are much poorer than others in the same area. Their diet is poorer. They own fewer assets – watches, pieces of furniture, mobile phones. And in the households where these people live, girls and women have less schooling.

We also knew that Fairtrade standards for tea and coffee have always been far more concerned with the incomes of producers than with wage workers’ earnings. What did surprise us is how wages are typically lower, and on the whole conditions worse, for workers in areas with Fairtrade organisations than for those in other areas.

Careful statistical analysis allowed us to separate out the possible effects of other factors, such as the scale of production. Still, the differences were in most cases, and especially for wages, statistically significant. Explaining why it should be that workers in areas dominated by Fairtrade organisations are so often worse off than workers in other areas is a complex and challenging task. Our full report explores some possible reasons.

It was also surprising to learn that many people do not benefit from the “community” projects supported with funds generated by the “social premium” consumers pay for Fairtrade products. Researchers at London’s School of Oriental and African Studies (Soas) found that many of the poorest are unable to use these facilities. In one Fairtrade tea co-operative the modern toilets funded with the premium were exclusively for the use of senior co-op managers.

One of our interviewees, James in Uganda, is desperately poor and lives with his elderly father in an inadequate shack very close to a tea factory supported by Fairtrade. Despite the fact that his father was once a worker at the tea factory, James is charged fees at the factory’s Fairtrade health clinic. He cannot afford them and instead has to make his way on one leg to a government clinic more than 5km away to get free treatment.

At another Ugandan co-operative supported by Fairtrade, we spoke to poor children who had been turned away from the Fairtrade-supported school as they owed fees. In this case, the Fairtrade premium did not support the very poor but was used to build houses for the teachers.

What comes out of this research is that what we buy in supermarkets could make a difference to the lives of the poorest, those employed in producing the goods we buy. But it is difficult for shoppers to make informed choices.

Wages and working conditions vary significantly across employers. There are many off-the-peg but unconvincing reasons given for paying people shockingly little: it is what the price of coffee allows, you can’t pay more when there is an excess supply of people wanting the jobs, and so on. But then it is surprising to find that there are employers who evidently can pay much more. This variation is what our research allows us to explore.

And in the process it raises questions for Fairtrade. If we are interested in what makes a difference to extremely poor people, it is important to compare areas with Fairtrade organisations not only with other smallholder producing areas, which we did, but also with areas where producers are much larger. If larger farmers can pay better and offer more days of work, this is surely an important thing to understand. It is not the “distorted comparison” that Fairtrade alleges.

We hope that our findings will help to inform consumers’ choices and feed into Fairtrade’s efforts to establish an auditing process that is more relevant to the lives of the poorest rural people. And we hope that they will commit to clearer information for consumers about who benefits from the social premium and how well rural wages and working conditions are monitored.

Christopher Cramer is professor of the political economy of development at the School of Oriental and African Studies, University of London