Lawrence Solomon believes so. From a recent op-ed of his in the National Post:
“Saturday, on World Fair Trade Day, we have something else to feel guilty about. That fair-trade cup of coffee we savor may not only fail to ease the lot of poor farmers, it may actually help to impoverish them, according to a study out recently from Germany’s University of Hohenheim.
The study, which followed hundreds of Nicaraguan coffee farmers over a decade, concluded that farmers producing for the fair-trade market ‘are more often found below the absolute poverty line than conventional producers (…)’
These findings do not surprise me. I speak as someone who has had contact with various Third World producers in my capacity as president of Green Beanery, a company I founded seven years ago to raise funds for Energy Probe Research Foundation (…).”
Solomon’s op-ed is interesting throughout. As for the study he cites, I have not yet had time to read it in its entirety, but it was published in a reputable scientific journal. As far as I can tell, the results cannot be argued to be causal, but the authors have taken great care to supplement their quantitative analysis with qualitative data from extensive interviews.
For technically minded readers, the bottom line of the study is that while organic and organic-fair trade coffee farmers receive a higher price at the farm gate, their exploitations are less profitable. Since farm profits — and not prices — are what matters in determining welfare, it appears that organic and organic-fair trade labeling is not what it’s cracked up to be.