Choosing a cup of Fairtrade coffee may not be helping the poor in Ethiopia and Uganda, according to a new study.
After four years of field work in coffee, tea and flower industries, development economists from the School of Oriental and African Studies (SOAS) in London found that people working in ordinary agricultural conditions had a higher standard of living than workers who received Fairtrade subsidies.
Researchers gathered 1,700 surveys and conducted 100 interviews, and found that women's wages, in particular, were especially low among Fairtrade producers, and the SOAS research questions whether Fairtrade has had a positive impact.
Fairtrade works on the idea that workers who produce commodities with a lot of price volatility should be protected by imposing a minimum price, and that price adjusts when the market rises above a certain point. Workers are also paid 5-10 percent or "development and technical assistance," according to the Economist.
The Fairtrade Foundation points out that other recent research conducted by independent sources has documented Fairtrade's improvements to working conditions in places like Kenya, where workers have been granted sick leave, better contract terms and overtime pay. They also document improved standards of living like better housing, education and health conditions.
One reason for the findings may be that the research compares small-scale Fairtrade farmers with big plantations. "Its conclusions appear to be based on unfair and distorted comparisons between farms and organizations of dramatically different size, nature, and means," the Fairtrade Foundation said in a statement.
In "like-for-like" comparisons, Fairtrade farmers have been shown to have better conditions, the statement says, such as free meals, overtime pay and loan and wage advances.
"While we were given an opportunity to comment at an earlier stage in their report writing process, we are disappointed to see that the final report has not properly taken account of the many issues we raised," the statement says.