October is Fair Trade Month!

I almost forgot to write this post. October is Fair Trade Month. It is an important reminder to consider fair trade purchases whenever possible. Not just during this month, but always. Having just returned from Europe, I was again astonished how much more prevalent fair trade products are in ordinary stores. The U.S. still has a lot of catching up to do.

As the mortgage-banking-credit crisis gathered full steam over the past two years, I could not help but see parallels between the ever more esoteric financial derivatives invented by profit hungry investment bankers and the lives of those stuck with an rotten mortgage on the one hand and the operations of the futures and options markets in relation to the lives of the farmers who grow the raw materials that satisfy our cravings on the other.

Sidney Mintz, the famous anthropologist, noted some time ago that whenever a highly desired food is consumed where it is not grown, power is deployed by those who desire it to insure steady supplies at low cost. The futures markets for tropical products like coffee, cocoa, sugar, etc., are part of such a deployment of power. They exclude those who don’t have the resources to participate while protecting the interests of those who do.

Markets are often praised as the most efficient means to allocate resources and, equally often, that efficiency is equated with fairness since supply and demand seem such impartial forces. But first and foremost, markets are about power. Not always political power–although there are plenty of examples how political power shapes markets–but economic power. Markets, in the absence of social controls, will always redistribute resources upward to those who already have.

This is where fair trade can make a difference. Rather than leaving the question who wins and who looses to the play of supply and demand, fair trade offers the opportunity to influence that equation in a small way. Farmers receive a fair trade price premium and a social premium over and above the world market price. The fair trade price helps farmers directly while the social premium provides funds for community projects.

Check the website of TransFair USA for more information and new developments. And make your town a fair trade town.

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