Developing countries use fair trade to address commodity crisis

WTO rules prevent third-world nations from protecting their farmers against an unfair burden imposed by subsidies granted by rich countries.

September 12, 2003: Inside the World Trade Organization (WTO) meeting today, developing countries aggressively pressed the U.S. and the EU to address the crisis of low prices for a whole host of commodities including cotton, sugar, and corn.

Just outside the WTO meeting, leaders from the developing world, including Africa, discussed the benefits of the Fair Trade system and how it is successfully helping farmers receive higher prices for their crops.

“If we want to address poverty –
we must address commodity prices,”
-Ambassador Amehou of Benin

“If we want to address poverty – we must address commodity prices,” said Ambassador Samuel Amehou of Benin. “If we don’t fix prices for commodities, most African countries will continue to suffer.”

“Agriculture in West Africa is done by families on farms of four hectares or less,” said Ndiogou Fall, President of ROPPA (Network of Peasant Organizations and Producers in West Africa). “The world competition in cotton is subsidized and it is very hard to compete. WTO rules prevent countries from putting in controls to protect local agriculture.”

“The current WTO system greatly benefits multinational grain companies by creating a race to the bottom for low prices,” said Mark Ritchie, President of the Institute for Agriculture and Trade Policy (IATP). “Fair Trade rules are succeeding because they guarantee farmers a fair price. Fair trade has taken the idea of sustainable development touted in the WTO’s Doha Round, and is actually making it happen every day.”

Started in the late 1980s, the Fair Trade system connects farmers directly with consumers, protects the environment, promotes sustainability, and is demonstrating how trade rules can promote equitable development. Fair Trade programs responded to plummeting prices in commodity markets, including coffee, tea and cocoa. By allowing producers to sell directly to importers, farmers bypass various intermediaries who often take the lion’s share of the profits. Fair Trade products now include sugar, mescal and even soccer balls.

“Fair trade farmers in coffee can rely on a price that is at least twice the cost of production and is not as volatile,” said Phil Bloomer, of Oxfam International. “This is not voodoo economics – it is an approach that is working and has had massive expansion.”

“Fair Trade wants to be an example to be followed by the world economy,” said Paola Ghillani, President of the Fair Trade Labeling Organization (FLO). “Trade should serve human beings, human beings should not be slaves to trade.”

In 2002, sales for Fair Trade products are estimated to have surpassed US$400 million, generating an estimated US$30 million of additional income for producers and workers. Austria, France and Norway are now the fastest growing fair trade markets overall, with sales volume among these countries increasing by more than 100 percent between 2001 and 2002.

A coalition of international organizations - the Institute for Agriculture and Trade Policy, Comercio Justo Mexico, Equiterre, Oxfam International and Gerster Consulting - have created the first-ever International Fair Trade Fair and Sustainable Trade Symposium. Bringing together fair trade experts and producers, the events offer ministers workable alternatives to current WTO policies and present successful examples of fair trade to the world.

For more details go to: www.fairtradeexpo.org