Does Fair Trade Deliver on Its Core Value Proposition? Effects on Income, Educational Attainment, and Health in Three Countries
By Eric Arnould, Alejandro Plastina, and Dwayne Ball
Alternative trade organizations (ATOs) based on philosophies of social justice and/or environmental well-being are establishing new channels of trade and marketing. Partisans promote ATOs as systems to transfer benefits from consumers in the wealthy northern hemisphere to producers in the poor southern hemisphere. The central public policy question is whether the well-being of poor agricultural producers in the southern hemisphere is actually being improved by fair trade practices, or are consumers who buy products on this premise deceived? The research reported here partially answers the question of whether participation in a fair trade coffee marketing channel delivers benefits to small-scale producers in Latin America. We employed a survey methodology to compare TransFair USA cooperative participants and non-participating farmers in three countries on socio-economic indicators of well-being. According to our analysis, the economic effects of FT participation are unassailable; the effects on educational and health outcomes are uneven. However, TransFair USA cooperative participation positively effects educational attainment and the likelihood a child is currently studying. We find positive health-related consequences of TransFair USA coop participation.
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