The development of fair trade labels – A market solution to a societal Concern? Chapter from “Policy responses to societal concerns: Workshop Proceeding, OECD, 2010.”

Authors: Helena Johansson 

Consumers are increasingly taking an interest in how their food is produced. Concerns are being voiced that practices that are environmentally harmful, involve maltreatment of animals or exploit poor and vulnerable farmers, should be avoided. The term societal concern has been coined for concerns that are derived from broadly shared values within a society, often entailing an ethical dimension.

The Fairtrade labelling system addresses a societal concern among consumers in developed countries; the improvement of working and living conditions for export-oriented small-scale farmers and hired labour in developing countries. As such it is an attempt to a market solution of a societal concern.

The chapter discusses to what extent the Fairtrade label is an efficient way to handle low prices for food export from developing countries and their lack of for example investment capital. An important question is whether the solutions provided by Fairtrade match the problems and market failures faced by the farmers.

Food and agriculture: Policy responses to societal concerns: Workshop Proceedings (all documents)(PDF 3.35 mb)


Helena Johansson