Over the Christmas-New Year period, I was reading the Economist magazine and read an article about the negative aspects of “organic” and “fair-trade” produce. It argued that supporting these initiatives was actually making the situation worse. (A gin and a warm afternoon on the porch produced the following.)
In their defence, it must be said that I can not disagree with the assertion that “organic” production requires significantly more land to produce the same quantity of produce. (More on quality later.) But I do have some reservations about the assertion that “fair-trade” by giving higher prices to primary producers, encourages them to stay in production when the real problem is over-production.
Now when I look at “fair-trade” as it is applied in the coffee industry here, I see a different picture. In a perfect world, these “over-producing” farmers would switch overnight into producing something more “valuable”. They would go to the bank and convince the bank to give them a loan which would start paying them back in (say) 3 years. They might mortgage their land, do some re-education on their new crop etc. etc.
But what if you don’t own the land (so have no asset), your house is a hut made from palm trees, you only went to school for 2 years when you were a kid and you barely have enough food to eat as it is. And you have never seen a bank and your government is in no position to help you out.
So “fair-trade” offers you a 5 cents per pound premium on the free market price – hardly a rip-off if this amounts to way less than 1 cent for each coffee in a “free world” coffee shop. And because it is called “fair-trade”, somebody else markets it that way and actually gets a 20% premium on the final bean price. So in order to get that 5 cents to the producer, you are probably paying a middleman many times that.
The reality is that the typical coffee producer is low-paid, lowly educated, poorly fed and a totally unworldly part of the supply chain and as a result, is shafted by the big middlemen. I will guess the banana industry is just the same. In other words, the Economist argument applies in a “perfect market” – one where the cost of fair entry to that market is closer to equal.
So what’s this gotta do with tomatoes. This will be subject to a later article, but basically, the tomatoes you buy here in Dili are gnarled unevenly coloured and often soft or split specimens. They are organic as use of artificial fertilisers is almost unknown here. They are not products of carefully controlled irrigation systems, not in hot houses and are probably wrenched out of dry scabby soil. But they taste like real tomatoes. They are exquisite. Not the cardboardy equivalents seen now in the western world – products of automated systems, hot houses and controlled temperature warehouses.
One day, I can just imagine western kids getting a taste of a Dili tomato and complaining “yuk, this is not a tomato … it’s not perfectly round … it’s got yukky green bits and some spots … it’s rubbish”. And to think tomatoes are rejected in the western world if they are not uniform in size, colour, firmness and cardboard taste.
Yeah, lets get rid of those unproductive coffee farmers, the unproductive tomato growers and while we are at it, all those unproductive art galleries and who needs those unproductive musicians who are not in the top 100 chart – they are just dragging down the more efficient artists.
I have nothing against the Economist bringing some of the issues to the table but the full picture would sometimes make it easier for us dumb readers to make our own decisions. So if I want to pay more for Mexican re-fried beans over ordinary baked beans, I will – presumably because I attain more satisfaction doing so. And if I want to eat gnarly old mis-shapen tomatoes over the cardboard variety, I will.
Should I respect any dry economic theorist who listens to classical music subsidised by the public purse. Now that would be a travesty wouldn’t it ?
