Unconventional ways to fight poverty

I’m excited to have another article published in RELEVANT magazine. This one was a bit more of a feather-ruffler though. Here’s the except that caused the most controversy:

Rethink Ethical Buying Habits.

Ethical shopping is one simple way to love your global neighbor in your day-to-day life. Most consumers who want to do good with their purchases opt for buying fairly traded products, but the fair trade certification doesn’t help third-world farmers and manufacturers as much as you might think. Research suggests it might even hurt them.

Take coffee for example. Surprisingly, most of the extra money you pay for fair trade doesn’t even get to the growers. One recent study in the Journal of Business Ethics found that less than 12 percent of the premium we pay for fair trade coffee actually reaches them.

And sometimes fair trade can hurt the people it intends to help. Research from Ecological Economics shows that Nicaraguan fair trade farmers were in a worse economic position after 10 years than non-fair trade farmers, largely due to the hefty entrance fees and compliance costs required to join the cooperative.

So instead of buying fair trade, what should you buy? Dr. Victor Claar, professor of economics at Henderson State University in Arkansas says you should just buy the coffee you like best. Why? Claar says, “Producers of the highest-quality coffees can charge a premium price because their coffee is that good.”

Instead of fair trade, he says free trade does more to lift nations out of poverty: “The fairest trade of all is trade that is genuinely free—free from the harm to the global poor that well-intentioned rich Northerners like us can sometimes bring.”

The next time you buy coffee or tea, you can skip the fair trade and still have confidence you are helping a farmer in need.

Read the rest here.

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