The Problem with Fair Trade Coffee
By Colleen Haight. Stanford Social Innovation Review Summer 2011 link
My field and analytical research has found that there are distinct limitations to the Fair Trade model.7 Perhaps the most serious challenge is the extraordinarily high price of coffee. “The market today is five times higher than when FLO entered the United States. The market’s at $2.50 (per pound for commodity coffee) today vs. the 40 cents or 50 cents (per pound) it was at in 2001,” says Dennis Macray, former director of global sustainability at Starbucks Coffee Co. This price shift dampens farmers’ desire to sell their high-quality coffee at the Fair Trade price. Many co-ops, according to Macray, are choosing to default on the Fair Trade contracts, so that they can do better for their members by selling on the open market.
Fair Trade without the Froth: A Dispassionate Economic Analysis of “Fair Trade” by Sushil Mohan
Institute of Economic Affairs Nov 4, 2010. link
-research shows that fair trade is not a strategy for long-term development – conventional trade is often more effective.
- analysts sympathetic to the movement have suggested that only 25% of the premium reaches producers.
-Fair Trade does not focus on the poorest countries. Fair Trade penetration is greater in middle income countries, rather than in poor ones. The top four nations by Fair Trade certified producers in 2007 were Mexico, Colombia, Peru and South Africa. These nations had an average GDP per capita of $4,790 in 2007. The thirteen nations with only one Fair Trade certified producer had average GDP per capita of just $2,807 in 2007. Coffee-producing countries with no Fair Trade producers have an even lower average GDP per head. Most significantly, using data from 2005–07 for Fair Trade exports to the USA, it is not possible to find any significant negative relationship between national income per head or poverty and Fair Trade penetration.
Unfair Trade Marc Sidwell. Adam Smith Institute 2008- link
"Economic development throughfree market reform actively favours the poor. Because free markets reduce prices while improving quality, they serve the interests of the poor consumer. Poor nations that open their markets and pursue economic development grow at much faster rates than developed economies, for the latter have already introduced the changes that make the most difference – explaining how Hong Kong could overtake the UK economically despite our head start. Moreover, within nations, economic growth improves life for the poor at least as much as the rest of the population, if not more so the long-term objective of the Fair Trade movement seems to be to create a broad-based constituency with which to achieve radical restrictions on free trade... Rather than emphasising individual consumer choices, the pattern of Fairtrade growth is increasingly corporatist, concentrating on persuading large organizations to declare themselves Fairtrade: Fairtrade schools, towns, and even potentially nations in Scotland and Wales. Choice is steadily removed from the consumer, either because a decision to source only Fairtrade products has been taken on their behalf.."
Absolution in Your Cup - Reason 2006 - link
"Yet given its size, Starbucks likely has done far more than the Fair Trade movement to improve the lot of coffee growers in the 25 countries from which it purchases coffee. Starbucks buys 2.2 percent of the world's coffee production, and its infamous growth fuels demand for high-priced specialty coffees. In 2004 it bought that coffee at an average price of $1.20 a pound, slightly below the $1.26 Fair Trade pays but more than twice the average price for beans on the global commodity market."
Tuesday, June 7, 2011
Should we boycott or ban products made by sweatshops?
From the New York Times: Where Sweatshops Are a Dream by Nicholas D. Kristof January 14,2009
"I often hear the argument: Labor standards can improve wages and working conditions, without greatly affecting the eventual retail cost of goods. That’s true. But labor standards and “living wages” have a larger impact on production costs that companies are always trying to pare. The result is to push companies to operate more capital intensive factories in better-off nations like Malaysia, rather than labor-intensive factories in poorer countries like Ghana or Cambodia.
Among people who work in development, many strongly believe (but few dare say very loudly) that one of the best hopes for the poorest countries would be to build their manufacturing industries. But global campaigns against sweatshops make that less likely.
Look, I know that Americans have a hard time accepting that sweatshops can help people. But take it from 13-year-old Neuo Chanthou, who earns a bit less than $1 a day scavenging in the dump. She’s wearing a “Playboy” shirt and hat that she found amid the filth, and she worries about her sister, who lost part of her hand when a garbage truck ran over her.
“It’s dirty, hot and smelly here,” she said wistfully. “A factory is better.”
The Unbelievable Truth About Sweatshops
Thursday, May 26, 2011
Jude Capper on Sustainable Beef
What is the environmental impact of beef grown on grass compared to conventional beef?
Dr. Capper – "Cows grow more slowly when grass is all they eat. If all of the beef in the U.S. were grass-fed we would need an additional 64.6 million cows in order to match the amount of beef produced in 2010. That would require an additional 131 million acres of land, which is about 75% of the state of Texas. That many cows would need an additional 1,700-billion liters of water, which amounts to the annual consumption of 46.3-million U.S. households. These cows would generate an additional 135 million tons of carbon which would be like adding 26.6 million cars to the road every year. So, in terms of land, energy, water, and carbon, grass-fed beef has a much larger environmental impact than conventional beef production."
Is it more natural for a cow to eat grass instead of corn?
Dr. Capper – "Cows probably did not eat corn 500 years ago. But does it matter if it's natural as long as it improves environmental impact, food safety, and beef affordability? Almost nothing we do today is 'natural' compared to 500 years ago. We have cars and airplanes. We have treatments for cancer and heart disease. Why is it that in every other business sector we celebrate increased efficiency and productivity thanks to new technology while when it comes to food some want it done the old-fashioned way?"
Read the entire interview:
Tuesday, May 24, 2011
Do we get more energy out of ethanol than it takes to make it?
"Overall then, ethanol has made the transition from an energy sink, to a moderate net energy gain
in the 1990s, to a substantial net energy gain in the present."
2008 Energy Balance for the Corn-Ethanol Industry. USDA
in the 1990s, to a substantial net energy gain in the present."
2008 Energy Balance for the Corn-Ethanol Industry. USDA
Has genetically modified Bt corn had a negative impact on Monarch butterflies?
| "There is no significant risk to monarch butterflies from environmental exposure to Bt corn, according to research conducted by a group of scientists coordinated by the Agricultural Research Service (ARS), U.S. Department of Agriculture. This research was published in the Proceedings of the National Academy of Sciences (PNAS)." Link References: Proceedings of the National Academy of Sciences: Monarch larvae sensitivity to Bacillus thuringiensis-purified proteins and pollen. Richard L. Hellmich, Corn Insects and Crop Genetics Unit, Agricultural Research Service-U.S. Department of Agriculture, Ames, Iowa; (515) 294-9343, fax (515) 294-2268, e-mail rlhellmi@iastate.edu. http://www.pnas.org/cgi/content/full/211297698v1 Impact of Bt corn pollen on monarch butterfly populations: A risk assessment. Mark K. Sears, Department of Environmental Biology, University of Guelph, Ontario, Canada; (519) 824-4120 ext. 3921, fax (519) 837-0442, e-mail msears@evb.uoguelph.ca. http://www.pnas.org/cgi/content/full/211329998v1 Corn pollen deposition on milkweeds in and near cornfields. John M. Pleasants, Department of Zoology and Genetics, Iowa State University, Ames; (515) 294-7204, fax (515) 294-8457, e-mail jpleasan@iastate.edu. http://www.pnas.org/cgi/content/full/211287498v1 Assessing the impact of Cry1Ab-expressing corn pollen on monarch butterfly larvae in field studies. Diane E. Stanley-Horn, Department of Environmental Biology, University of Guelph, Ontario, Canada; (519) 824-4120 ext. 4847, fax (519) 837-0442, e-mail destanle@uoguelph.ca. http://www.pnas.org/cgi/content/full/211277798v1 Temporal and spatial overlap between monarch larvae and corn pollen. Karen S. Oberhauser; Department of Ecology, Evolution and Behavior, University of Minnesota, St. Paul, Minnesota (612) 624-8706, fax (612) 624-6777, e-mail oberh001@tc.umn.edu. http://www.pnas.org/cgi/content/full/211234298v1 Effects of exposure to event 176 Bacillus thuringiensis corn pollen on monarch and black swallowtail caterpillars under field conditions. M. R. Berenbaum, Department of Entomology, University of Illinois at Urbana-Champaign, Urbana, Illionois; (217) 333-7784, fax (217) 244-3499, e-mail maybe@uiuc.edu. http://www.pnas.org/cgi/content/full/171315698v1 |
Rent Seeking
Rent seeking is the act of seeking special privileges or protections from the government. These can come in the form subsidies or regulations that harm competitors but benefit special interests. A good description of rent seeking is given in the Fall 2004 article 'Public Choice Revolution' in the journal Regulation:
"Interest groups will engage in what public choice theorists call “rent seeking,” i.e., the search for redistributive benefits at the expense of others. The larger the state and the more benefits it can confer, the more rent-seeking will occur. The entire federal budget..can be viewed as a gigantic rent up for grabs for those who can exert the most political muscle. Rent seeking does not produce a pure transfer; when individuals or groups compete for some advantage from the state (e.g., a subsidy, a monopoly), they will all use real resources (e.g., ink, paper, travel, meals, time) in trying to grab it. As a result, part of the expected rent will be dissipated, creating a net social loss."
Many times, regulations that are cloaked with the impression of protecting the environment often turn out to provide special privileges to big business. Monsanto enjoys the protections of barriers to entry in the biotechnology sector. Again from the journal Regulation:
'In the end, EPA and the USDA regulatory policies place federal bureaucrats in the middle of virtually all field trials of gene-spliced plants, spelling disaster for small businesses and academic institutions whose scientists lack the resources to comply with burdensome, expensive, unnecessary regulation. The cost of field-testing gene-spliced plants is as much as 20-fold higher than for virtually identical plants crafted with older, less precise genetic techniques.' -Regulation, Summer 2003
An application of rent seeking behavior can also be found looking back at the political climate prior to the failed vote on the proposed Markey-Waxman climate change bill (from the Washington Post):
"But as the legislation’s chances improve, corporations, environmentalists and other interest groups have worked to put their imprint on the bill. The Center for Public Integrity said its review of Senate disclosure records showed that more than 880 businesses and interest groups have registered to lobby on climate change in the first quarter of 2009 — up more than 14 percent over the same time last year."
References:
The Washington Post June 5, 2009.
High-Stakes Quest for Permission to Pollute
Interest Groups Press Congress for Cap-and-Trade Allowances in Climate-Change Legislation
Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003
Public Choice Revolution. Regulation, Fall 2004.
"Interest groups will engage in what public choice theorists call “rent seeking,” i.e., the search for redistributive benefits at the expense of others. The larger the state and the more benefits it can confer, the more rent-seeking will occur. The entire federal budget..can be viewed as a gigantic rent up for grabs for those who can exert the most political muscle. Rent seeking does not produce a pure transfer; when individuals or groups compete for some advantage from the state (e.g., a subsidy, a monopoly), they will all use real resources (e.g., ink, paper, travel, meals, time) in trying to grab it. As a result, part of the expected rent will be dissipated, creating a net social loss."
Many times, regulations that are cloaked with the impression of protecting the environment often turn out to provide special privileges to big business. Monsanto enjoys the protections of barriers to entry in the biotechnology sector. Again from the journal Regulation:
'In the end, EPA and the USDA regulatory policies place federal bureaucrats in the middle of virtually all field trials of gene-spliced plants, spelling disaster for small businesses and academic institutions whose scientists lack the resources to comply with burdensome, expensive, unnecessary regulation. The cost of field-testing gene-spliced plants is as much as 20-fold higher than for virtually identical plants crafted with older, less precise genetic techniques.' -Regulation, Summer 2003
An application of rent seeking behavior can also be found looking back at the political climate prior to the failed vote on the proposed Markey-Waxman climate change bill (from the Washington Post):
"But as the legislation’s chances improve, corporations, environmentalists and other interest groups have worked to put their imprint on the bill. The Center for Public Integrity said its review of Senate disclosure records showed that more than 880 businesses and interest groups have registered to lobby on climate change in the first quarter of 2009 — up more than 14 percent over the same time last year."
References:
The Washington Post June 5, 2009.
High-Stakes Quest for Permission to Pollute
Interest Groups Press Congress for Cap-and-Trade Allowances in Climate-Change Legislation
Henry Miller and Gregory Conko. 'Bootleggers and Biotechs.' Regulation. Summer 2003
Public Choice Revolution. Regulation, Fall 2004.
Ten Facts Related to the Economics of Modern Food Production
Dairy & Livestock Production
#1 The carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. For every 1 million cows, the reduction in global warming potential from rBST supplemented cows is equivalent to removing 400K cars from the roadways or planting 300 million trees. (Capper, 2009)
#2 Transportation accounts for at least 26% of total anthropogenic GHG emissions compared to roughly 5.8% for all of agriculture & less than 3% associated with livestock production in the U.S. (Stackhouse, 2009)
#3 The use of grain and pharmaceutical technology in beef production has resulted in a nearly 40 percent reduction in greenhouse gases (GHGs) per pound of beef compared to grass feeding. (Avery, 2007)
#4 Bans on feed grade sub- therapeutic antibiotics in European countries lead to increased reliance on therapeutic antibiotics important to human health. (Hayes & Jensen, 2003)
Crop Production
#5 Biotechnology improves insect biodiversity, crop plant diversity, and has lower levels of carcinogens than conventional and organic corn. (Munkvold,1999;Dowd,2000; Miller &Conko,2006 ; McCreedy et al 2007, Smith et al ,1992)
#6 The use of biotech Roundup resistant crops has led to reduced herbicide use and allowed roundup to replace other herbicides that were up to 17 times more toxic. (USDA,2000)
#7 Total decreases in carbon dioxide as a result of using biotech crops was equivalent to removing 6 million cars from the road in 2007. (that’s a lot more than the # of hybrid cars sold in 2007) (Brookes & Barfoot, 2009)
Modern Agriculture in General
#8 Rather than having a negative impact on climate change, intensive agriculture has actually has a mitigating effect on climate change with a reduction of 68 kgC (249 kgCO2e) emissions relative to 1961 technology. ( Burneya et al , 2010)
#9 Small farms actually benefit more from subsidy programs than large scale farms, despite the relative shares of total subsidies paid. The impacts of subsidies on food choices have not contributed to the obesity epidemic. (Alston et al, 2007; USDA, 2011)
#10 Local food production can actually be more energy intensive than modern efficient supply chains. On average, fuel use per cwt for local food production is about 2.18 gallons vs. .69 and 1.92 for intermediate and traditional supply chains for beef production. (Sexton, 2009; Weber,2008)
References:
The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science,Capper, J. L., Cady, R. A., Bauman, D. E. 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781
San Diego Center for Molecular Agriculture: Foods from Genetically Modified Crops
A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates. Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva Science 8 June 2007: Vol. 316. no. 5830, pp. 1475 – 1477
Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.
Indirect Reduction of Ear Molds and Associated Mycotoxins in Bacillus thuringiensis Corn Under Controlled and Open Field Conditions: Utility and Limitations. Dowd, J. Economic Entomology. 93 1669-1679 2000.
"Why Spurning Biotech Food Has Become a Liability.'' Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.
Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000
GM crops: global socio-economic and environmental impacts 1996- 2007. Brookes & Barfoot PG Economics report. 2009
The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production. By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues. 2007
Lessons from the Danish Ban on Feed Grade Antibiotics. Dermot J. Hayes and Helen H. Jenson. Choices 3Q. 2003. American Agricultural Economics Association.
Does Local Production Improve Environmental and Health Outcomes. Steven Sexton. Agricultural and Resource Economics Update, Vol 13 No 2 Nov/Dec 2009. University of California.
Environ. Sci. Technol. 2008, 42, 3508–3513. Weber.
Communal Benefits of Transgenic Corn. Bruce E. Tabashnik Science 8 October 2010:Vol. 330. no. 6001, pp. 189 - 190DOI: 10.1126/science.1196864
Farm Subsidies and Obesity in the United States. Julian M. Alston, Daniel A. Sumner, and Stephen A. Vosti. Agricultural Resource Economics Update V. 11 no. Nov/Dec 007 U.C. Davis
Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057
Clearing the Air: Livestock's Contribution to Climate ChangeMaurice E. Pitesky*, Kimberly R. Stackhouse† and Frank M. MitloehnerAdvances in Agronomy Volume 103, 2009, Pages 1-40
Comparing the Structure, Size, and Performance of Local and Mainstream FoodSupply ChainsRobert P. King, Michael S. Hand, Gigi DiGiacomo,Kate Clancy, Miguel I. Gómez, Shermain D. Hardesty,Larry Lev, and Edward W. McLaughlin Economic Research Report Number 99 June 2010
The environmental impact of recombinant bovine somatotropin (rbST) use in dairy production Judith L. Capper,* Euridice Castañeda-Gutiérrez,*† Roger A. Cady,‡ and Dale E. Bauman* Proc Natl Acad Sci U S A. 2008 July 15; 105(28): 9668–9673
http://www.ers.usda.gov/Briefing/FarmPolicy/gov-pay.htm (accessed May 2011)
USDA Report-Farm Income and Costs: Farms Receiving Government Payments
http://www.ers.usda.gov/Briefing/FarmIncome/govtpaybyfarmtype.htm (accessed May 2011)
#1 The carbon footprint for a gallon of milk produced in 2007 was only 37 percent of that produced in 1944. For every 1 million cows, the reduction in global warming potential from rBST supplemented cows is equivalent to removing 400K cars from the roadways or planting 300 million trees. (Capper, 2009)
#2 Transportation accounts for at least 26% of total anthropogenic GHG emissions compared to roughly 5.8% for all of agriculture & less than 3% associated with livestock production in the U.S. (Stackhouse, 2009)
#3 The use of grain and pharmaceutical technology in beef production has resulted in a nearly 40 percent reduction in greenhouse gases (GHGs) per pound of beef compared to grass feeding. (Avery, 2007)
#4 Bans on feed grade sub- therapeutic antibiotics in European countries lead to increased reliance on therapeutic antibiotics important to human health. (Hayes & Jensen, 2003)
Crop Production
#5 Biotechnology improves insect biodiversity, crop plant diversity, and has lower levels of carcinogens than conventional and organic corn. (Munkvold,1999;Dowd,2000; Miller &Conko,2006 ; McCreedy et al 2007, Smith et al ,1992)
#6 The use of biotech Roundup resistant crops has led to reduced herbicide use and allowed roundup to replace other herbicides that were up to 17 times more toxic. (USDA,2000)
#7 Total decreases in carbon dioxide as a result of using biotech crops was equivalent to removing 6 million cars from the road in 2007. (that’s a lot more than the # of hybrid cars sold in 2007) (Brookes & Barfoot, 2009)
Modern Agriculture in General
#8 Rather than having a negative impact on climate change, intensive agriculture has actually has a mitigating effect on climate change with a reduction of 68 kgC (249 kgCO2e) emissions relative to 1961 technology. ( Burneya et al , 2010)
#9 Small farms actually benefit more from subsidy programs than large scale farms, despite the relative shares of total subsidies paid. The impacts of subsidies on food choices have not contributed to the obesity epidemic. (Alston et al, 2007; USDA, 2011)
#10 Local food production can actually be more energy intensive than modern efficient supply chains. On average, fuel use per cwt for local food production is about 2.18 gallons vs. .69 and 1.92 for intermediate and traditional supply chains for beef production. (Sexton, 2009; Weber,2008)
References:
The environmental impact of dairy production: 1944 compared with 2007. Journal of Animal Science,Capper, J. L., Cady, R. A., Bauman, D. E. 2009; 87 (6): 2160 DOI: 10.2527/jas.2009-1781
San Diego Center for Molecular Agriculture: Foods from Genetically Modified Crops
A Meta-Analysis of Effects of Bt Cotton and Maize on Nontarget Invertebrates. Michelle Marvier, Chanel McCreedy, James Regetz, Peter Kareiva Science 8 June 2007: Vol. 316. no. 5830, pp. 1475 – 1477
Comparison of Fumonisin Concentrations in Kernels of Transgenic Bt Maize Hybrids and Nontransgenic Hybrids. Munkvold, G.P. et al . Plant Disease 83, 130-138 1999.
Indirect Reduction of Ear Molds and Associated Mycotoxins in Bacillus thuringiensis Corn Under Controlled and Open Field Conditions: Utility and Limitations. Dowd, J. Economic Entomology. 93 1669-1679 2000.
"Why Spurning Biotech Food Has Become a Liability.'' Miller, Henry I, Conko, Gregory, & Drew L. Kershe. Nature Biotechnology Volume 24 Number 9 September 2006.
Genetically Engineered Crops: Has Adoption Reduced Pesticide Use? Agricultural Outlook ERS/USDA Aug 2000
GM crops: global socio-economic and environmental impacts 1996- 2007. Brookes & Barfoot PG Economics report. 2009
The Environmental Safety and Benefits of Growth Enhancing Pharmaceutical Technologies in Beef Production. By Alex Avery and Dennis Avery, Hudson Institute, Centre for Global Food Issues. 2007
Lessons from the Danish Ban on Feed Grade Antibiotics. Dermot J. Hayes and Helen H. Jenson. Choices 3Q. 2003. American Agricultural Economics Association.
Does Local Production Improve Environmental and Health Outcomes. Steven Sexton. Agricultural and Resource Economics Update, Vol 13 No 2 Nov/Dec 2009. University of California.
Environ. Sci. Technol. 2008, 42, 3508–3513. Weber.
Communal Benefits of Transgenic Corn. Bruce E. Tabashnik Science 8 October 2010:Vol. 330. no. 6001, pp. 189 - 190DOI: 10.1126/science.1196864
Farm Subsidies and Obesity in the United States. Julian M. Alston, Daniel A. Sumner, and Stephen A. Vosti. Agricultural Resource Economics Update V. 11 no. Nov/Dec 007 U.C. Davis
Greenhouse gas mitigation by agricultural intensification Jennifer A. Burneya,Steven J. Davisc, and David B. Lobella.PNAS June 29, 2010 vol. 107 no. 26 12052-12057
Clearing the Air: Livestock's Contribution to Climate ChangeMaurice E. Pitesky*, Kimberly R. Stackhouse† and Frank M. MitloehnerAdvances in Agronomy Volume 103, 2009, Pages 1-40
Comparing the Structure, Size, and Performance of Local and Mainstream FoodSupply ChainsRobert P. King, Michael S. Hand, Gigi DiGiacomo,Kate Clancy, Miguel I. Gómez, Shermain D. Hardesty,Larry Lev, and Edward W. McLaughlin Economic Research Report Number 99 June 2010
The environmental impact of recombinant bovine somatotropin (rbST) use in dairy production Judith L. Capper,* Euridice Castañeda-Gutiérrez,*† Roger A. Cady,‡ and Dale E. Bauman* Proc Natl Acad Sci U S A. 2008 July 15; 105(28): 9668–9673
''Diversity of United States Hybrid Maize Germplasm as Revealed by Restriction Fragment Length Polymorphisms.'' Smith, J.S.C.; Smith, O.S.; Wright, S.; Wall, S.J.; and Walton, M. (1992) Crop Science 32: 598–604
USDA Report- Government Payments and the Farm Sector: Who Benefits and How Much?http://www.ers.usda.gov/Briefing/FarmPolicy/gov-pay.htm (accessed May 2011)
USDA Report-Farm Income and Costs: Farms Receiving Government Payments
http://www.ers.usda.gov/Briefing/FarmIncome/govtpaybyfarmtype.htm (accessed May 2011)
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