Fairtrade And The Rainforest Alliance

We’ve pointed out over the years that we’re not particularly in favour of the varied fair trade schemes out there. We do indeed want the poor out there to get richer and insist that it is free markets and capitalism that achieve that worthy, even noble, aim. On the other hand consumers gain utility from thinking they’re doing something useful so that makes them richer, as their voluntary spending on such schemes shows, so why not?

The gripping hand argument for us is that Fairtrade, specifically, encourages the perpetuation of smallholder farming. Or, as we would put it, the sentencing of people to an eternity of peasantry.

With that background though we are supportive of this move:

KitKat has severed its ties with Fairtrade, despite the organisation behind the scheme warning that thousands of farmers would be hit by the move. The boss of Fairtrade said Nestle’s decision to cut its 10-year association with the non-profit organisation was “profoundly disappointing”.

The Swiss-owned food giant said it would now source its cocoa for KitKat bars from farms on Rainforest Alliance terms instead of those working with Fairtrade accreditation.

For those not au fait with the squabbling between groupuscules the differences are explained here and here.

The major benefit of such schemes is in the egos of those doing the purchasing. We do indeed insist that increasing the consumer surplus is a good thing and so the increase in competition is to be welcomed. Those who prefer to acquire that aura of zealous morality through their purchases may now do so in at least two different ways. They are made better off by the choice. Why wouldn’t we support that?

Markets do, after all, work.