The coffee and other products labeled ‘fair trade’ in your grocery store represent certification processes aimed at increasing farmers’ incomes, promoting the growth of democratic cooperatives and encouraging environmentally friendly practices.

A study led by Harvard doctoral student Raluca Dragusanu says fair trade does indeed achieve many of its goals, although ‘on a modest scale’ relative to the size of producing countries’ economies. One weakness is that workers benefit financially far less than farm owners: In one Mexican study, wages for fair-trade workers were just 7pc more than for comparable workers, although the farms’ prices were 130pc higher than conventional farms’.

(Source: Journal of Economic Perspectives)

Published in Dawn, Economic & Business, January 26th , 2015

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