We might think of sub-Saharan subsistence economies when we think of
Fairtrade, but the biggest recipient of Fairtrade subsidy is actually
Mexico. Mexico is the biggest producer of Fairtrade coffee with about
23% market share. Indeed, as of 2002, 181 of the 300 Fairtrade coffee producers were located in South America and the Caribbean. As Marc Sidwell points out,
while Mexico has 51 Fairtrade producers, Burundi has none, Ethiopia
four and Rwanda just 10 – meaning that "Fairtrade pays to support
relatively wealthy Mexican coffee farmers at the expense of poorer
The article offers many other points of interest. For instance:
By guaranteeing a minimum price, Fairtrade also encourages market
oversupply, which depresses global commodity prices. This locks
Fairtrade farmers into greater Fairtrade dependency and further
impoverishes farmers outside the Fairtrade umbrella. Economist Tyler
Cowen describes this as the "parallel exploitation coffee sector".
farms must not be more than 12 acres in size and they are not allowed
to employ any full-time workers. This means that during harvest season
migrant workers must be employed on short-term contracts. These rural
poor are therefore expressly excluded from the stability of long-term
employment by Fairtrade rules.
In other words, it's mostly a marketing gimmick.