Foreword

A common theme runs through Scripture and on through the history of the Church: concern for the poor. Individually and corporately, we are called to seek the welfare of the poor. Consensus on how to answer this call has varied as cultures and contexts change. As we begin the twenty-first century, a noticeable shift has occurred in the response American Christians are giving to this call.

For post-World War II America, compassionate service was achieved through large centralized organizations. Businesses and workers gave unrestricted donations to the local United Way that strategically allocated resources to nonprofit enterprises. Church members dutifully sent their contributions to a national church office to coordinate ministry on behalf of congregants. It was best to let the professionals handle it. Much has changed.

For a great many people today, impersonally funding services is insufficient. There must be a personal experiential connection. Compassion International developed a model linking donors with specific children. Habitat for Humanity created a model where volunteers get their hands dirty building homes for the poor. More recently, Kiva.com created a microfinance service where people make small enterprise loans to specific individuals in emerging nations, and, of course, there is the explosion of short-term mission trips by a wide range of American congregations.

Parallel to these changes has been a growing interest in discerning how our personal actions affect the economy, society, and the environment. Consumerism is seen as a threat to material and spiritual qualities of life. While Christians have a history of organizing against perceived corporate and governmental injustice, individuals are now cognizant of how their personal economic decisions impact the world. What we buy and how we buy it is integral to our spiritual development and Christian witness.

Fair trade is a prominent expression of this desire to influence the world through personal economic decisions. Poor farmers and small-crafts producers in emerging nations who agree to certain social and environmental standards can have their products certified as “fair trade” goods by various organizations. Compassionate and just consumers in developed nations willingly pay a premium for these fair trade goods, intending to create a better life for the producers.

These fair trade strategies have been emerging since World War II, but interest has really blossomed over the last twenty years. Religious organizations and confessional groups, particularly communions connected with the National Council of Churches, have been avid supporters of fair trade goods. For instance, within my own church, the Presbyterian Church, U.S.A., there is the Presbyterian Coffee Project, which also sells cocoa and chocolate. It operates in cooperation with Equal Exchange, a fair trade distributor. Congregations are encouraged to promote fair trade coffee to their congregants and to their communities. The Presbyterian Coffee Exchange website (http://www.pcusa.org/coffee/) says:

Participating congregations testify that the Presbyterian Coffee Project is a great way to help people in need while enjoying fellowship and an excellent cup of coffee. Fair trade practices complement our mission with farmers in Latin America, Africa and Asia, as well as our commitment to stewardship of the natural environment. By using fair trade coffee in our congregations, offices and homes, Presbyterians help guarantee that farmers will earn the income they need to feed their families, educate their children and improve their communities. Fair trade is a simple solution that means the difference—quite literally—between surviving and not surviving for small-scale coffee farmers.

The appeal of these programs is the sense of personal connection that participants develop when fighting injustice. There is little doubt that most who participate are acting out of an honest desire to reshape the world in a way that honors God and aids the poor. The question that is rarely critically examined, however, is whether or not fair trade programs actually deliver on their economic promises.

Part of the problem is the moralistic way the issue is framed. After all, who supports “unfair trade?” We might well ask how fair trade differs from free trade. What is the unfairness that fair trade rectifies? Many fair trade advocates name farm subsidies in wealthy nations as an example of unfairness. Farm subsidies keep domestic goods artificially cheap, thus making imported goods from poor nations uncompetitive. Others protest that many goods are harvested or manufactured with forced labor. Yet, by definition, free trade is exchange between parties that are free of government interference (like tariffs and subsidies) and where parties are free of coercion. Calling for the elimination of subsidies and an end to forced labor is advocacy for free trade.

Frequently, there is simply a general sentiment among fair traders that market exchange inherently causes, or at least contributes to, the poverty of peasants. A fairer exchange system is desired. The economic analysis goes little deeper than this. Yet, as disciples of Jesus Christ, called to exercise compassion and seek justice, sentiment and good intentions are not enough. We must scrutinize our actions to see if they achieve the ends we intend. If they do not achieve our ends, we risk the perverse circumstance of damaging the people we intend to help, even as we seek personal solidarity with their suffering.

With fair trade, we are looking at an economic question. What might an economic analysis of fair trade tell us? Victor Claar offers us vital insights.

Michael W. Kruse
Author of the Kruse Kronicle blog
General Assembly Mission Council
Presbyterian Church (U.S.A.)

Introduction

Buying fair trade goods is perhaps the most visible recent initiative intended to improve the lot of the global poor, and also one that has been particularly embraced by the Christian community throughout much of the wealthy first world. While the strength of the embrace varies across Christendom, fair trade has been welcomed especially strongly in mainline protestant denominations, the Catholic Church, and the emerging church movement. Although it is rare to find much common ground among these three groups, they appear quite united in their belief that their purchase of fair trade goods will make a significant difference in the lives of the global poor. Additionally, while the fair trade movement includes a broad variety of goods and services, fair trade has enjoyed its greatest growth and recent success in the production, sales, and marketing of coffee.

The idea behind buying fair trade is a simple, compassionate one. Rich northern consumers pay a little extra for coffee that has been certified to satisfy fair trade standards by one of the member groups of the Fairtrade Labelling Organizations International (FLO). Through their purchases of fair trade coffee, consumers presumably engage in “ethical consumption,” using the coffee market itself as a means of voting for better treatment of southern coffee growers. The primary guarantee of the fair trade label is that the coffee bearing its mark has been produced by individual or family growers—working within a cooperative—who receive a minimum-price guarantee for their crop. For example, fair trade coffee growers of washed arabica (high quality) coffee are currently guaranteed a minimum price of US$1.25 per pound, plus an additional ten cents per pound paid as a “social premium” intended for local community and business development projects such as schools, sanitation, or health care. When the world price of coffee rises above $1.25, the growers receive the world price plus the social premium. Lower-quality robusta beans are fair-trade eligible as well, but the guaranteed price is lower.

Mainline protestants have been especially active in buying and promoting fair trade coffee through their participation in the Interfaith Program offered by Equal Exchange, a Massachusetts-based for-profit fair trade coffee roaster and distributor. Through its Interfaith Program, Equal Exchange sells and distributes its products through a network of concerned Protestant congregations. Participating churches may purchase coffee from Equal Exchange at the same wholesale prices paid by retailers, and then sell the products to church members. Churches are also encouraged to serve Equal Exchange’s coffees during their fellowship hours. In the case with which the author is personally most familiar, members of the congregation’s Global Outreach Committee take charge of advertising fair trade coffee in the weekly bulletins and monthly newsletters, placing orders for their inventory with Equal Exchange, and staffing a cart each Sunday where parishioners can conveniently purchase fair trade coffees and other Equal Exchange products. The committee has even put together special seasonal bundles designed for gift-giving.

The Equal Exchange Interfaith Program is broad and growing. A partial list of its current protestant partners is given here:

Church of the Brethren Coffee Project
Disciples of Christ Coffee Project
Lutheran World Relief Coffee Project
Mennonite Central Committee Coffee Project
Presbyterian Coffee Project
United Church of Christ Coffee Project
United Methodist Committee on Relief Coffee Project
Unitarian Universalist Service Committee Coffee Project

In July 2005, the Presbyterian Record, the monthly magazine of the Presbyterian Church of Canada, devoted its entire issue to fair trade. The issue included a fair trade editorial; a feature entitled, “Mad about the Bean: Fair Trade Is Good to the Last Drop”; and a short article by Canadian broadcaster, author, and speaker Michael Coren. On the editor’s page, David Harris claims that “[t]here’s no excuse not to serve fair trade.” Coren’s piece bears the title, “Christians Must Fight for Fair Trade: Loving Jesus Demands a Struggle for a Fair World Economy.”

The movement to buy fair trade coffee has also taken hold in Catholic circles. Philip Booth of the United Kingdom’s (UK’s) Institute of Economic Affairs notes that the British diocese of Arundel and Brighton declared itself to be a “Fairtrade Diocese” in June 2005. The diocesan Website boasts that forty-seven of its parishes are “Fairtrade” in their own right, and notes that, “[f]or the Christian, Fairtrade can also be a help to spiritual growth.” Fair trade is growing in strength among Catholics in the United States as well. For example, Catholic Relief Services operates its own Interfaith Fair Trade partnership with Equal Exchange.

The fair trade coffee initiative is especially strong among the emerging church movement in the United States. Given the emerging church’s emphasis on reimagining how Jesus would live, serve, and minister to others in our contemporary, media-driven culture, buying fair trade coffee provides emerging groups with one more way to actively care for the global poor. This point has been made especially strongly by key emerging voices such as Brian McLaren’s, founding pastor of Cedar Ridge Community Church in the Baltimore-Washington area. In his 2007 book, Everything Must Change, McLaren goes even further than the FLO’s current coffee certification program. He writes: “My personal proposal: that we create an international fair trade seal (like the Good Housekeeping Seal of Approval) that could rate any product or service based on the ethics of its production. This seal would help people who want to engage in ethical buying and compare products.” Similarly Shane Claiborne, another author with significant sway among emergents, champions fair trade in his 2006 bestseller from Zondervan, The Irresistible Revolution: Living as an Ordinary Radical.

Thus, the fair trade coffee movement is strong among Christians of many varieties in these first years of the new millennium. For many, the decision to buy fair trade coffee is not really a decision at all—it is a commitment. Buying coffee for a premium price is viewed by most fair trade advocates as an act of justice carried out though the operations of free trade in international markets. The fair trade act is an act of “dollar democracy” in which coffee demanders see themselves as standing up in the face of injustices that have been visited on poor small-scale coffee growers by either greedy multinational corporations (MNCs) or greedy middlemen who pay growers less than the “just” price for the coffee they honestly grow and harvest.

This short book explores the modern fair trade coffee network from the perspective of a Christian concerned for the plight of the world’s poorest people and follows the following plan. The next chapter lays out the essential facts about the coffee industry and the determination of coffee prices in the absence of fair trade. This is followed by a brief history of the fair trade movement, explaining how we have arrived at its current incarnation. After laying that careful groundwork, the analysis turns to an examination of the claims of the fair trade network and whether it can be expected to deliver on its promises. The book closes by considering how an informed Christian may thoughtfully, carefully, and lovingly respond to the fair trade coffee network and its champions.

The plight of the global poor is not good. It should daily break our hearts that in our modern world of abundant food, technology, and other resources we have not done a better job of enabling the poorest among us to enjoy even the most basic goods and services most of us take for granted—things such as clean water, food for today, sanitation, and basic education and medicine. I am convinced that real, long-term hope for today’s global poor lies in our united prayerful anticipation of the day in which we will no longer think in terms of “us” (wealthy Westerners) and “them” (the global poor). Instead, the question that should gnaw at us most deeply is how we can each be effective forces to bring about a world in which such a distinction is no longer relevant—a world in which all people share together, with enduring personal dignity and freedom, the blessings and rich abundance of God’s gracious and innumerable gifts intended for us all.

This monograph, then, brings economic thinking to bear on ethical considerations of immense importance. Nevertheless, the approach is one of both humility and reverence: humility regarding what economics can and cannot illuminate, and reverence for God and all of his creatures. As Tim Harford has marvelously put it, “[a]n economist cannot solve ... ethical conundrums, but economics can unwrap them so that at least the ethical questions become clearer.”