unintended consequences:

"Fairtrade 'does more harm than good to Third World countries', says think tank

The "ethical" brand Fairtrade, backed by A-list celebrities and £2million of taxpayers' cash, leaves Third World farmers worse off, according to a damning new report....

Huge publicity, including a Government-sponsored education campaign in schools, has attempted to persuade the public to pay more for goods such as coffee, chocolate and bananas to ensure a better deal for producers in impoverished nations.

And stars such as Coldplay singer Chris Martin have been queuing up to endorse its products.

But an investigation by the Adam Smith Institute, the highly respected Right-wing think-tank, claims that Fairtrade's efforts to help African and Central American farmers do more harm than good.

The Fairtrade Mark – familiar to anyone who shops in Britain's leading supermarkets – guarantees that producers in developing countries receive a fair price for their goods.

Last year, British consumers spent more than £300million on Fairtrade products.

But the report Unfair Trade claims that the organisation's "positive image appears to rely more on public relations than research".

It adds:
• Fairtrade helps only a very small number of farmers while leaving the majority worse off.
•It favours producers in better-off nations such as Mexico, rather than poor African countries.
•It holds back economic development, paying inefficient cooperative farms and discouraging diversification and mechanisation.
• Supermarket chains profit more from the higher price of Fairtrade goods than farmers.
•Only a fifth of produce grown on Fairtrade-approved farms is actually purchased at its guaranteed fair price.

Tom Clougherty, policy director of the Adam Smith Institute, says: "At best, fair trade is a marketing device that does the poor little good.

"At worst, it may inadvertently be harming some of the planet's most vulnerable people."

Most damning of all, the report claims that Fairtrade is hurting the poorest group of all in the production process of its goods – the casual labourers hired by farmers to pick the bananas, coffee and cotton.

Last night, Harriet Lamb, UK executive director of Fairtrade, said: "Of course, Fairtrade is not perfect and has not solved all the world's problems. But the Institute is condemning us for trying."

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