Awhile back, Troy sang the praises of Fair Trade Coffee. At the time, I expressed cynicism along these lines: If a commodity can have its market price raised by being tagged as somehow fairer, the motivation to game the system (in order to scheme even more profit from the commodity in question) would be overwhelming.

Well, color me unsurprised by the story in the Financial Times this morning: "Ethical Coffee Workers paid below market wages":

"Ethical" coffee is being produced in Peru, the world's top exporter of Fairtrade coffee, by labourers paid less than the legal minimum wage

I'm shocked, shocked to find out that there's gaming of the system going on. meanwhile, the Fairtrade people are utterly unwilling to deal with reality:

As the board member of one Peruvian Fairtrade-certified coffee producer told the FT: "No certifier can guarantee they will purchase 100 per cent of a cooperative's production,, so how can they guarantee that every bag will be produced according to their standards?"

I seem to recall making that point, and then being roundly criticized for it :) What Fairtrade mainly accomplishes is this: it provides a way to add markup at the consumer end without having to actually do anything at the producer end. The bottom line: if you buy Fairtrade coffee so that you can feel better about it, don't. Just buy the non-Fairtrade stuff, because all you're really doing is providing extra margin to the sellers. In fact, it's worse than that; you're providing them a huge incentive to screw you and the farmers over. To make that point more brutally obvious:

The FT has been told of Fairtrade coffee being planted in protected national forest land in the northern Peruvian jungle.

Using global satellite mapping, a Canadian NGO found that about 1/5th of all coffee production in one Fairtrade certified association was illegally planted in protected virgin rainforest.

Oops.

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