While I appreciate your posting of this link is surely done out of time constraint, I would like to point out that this strategy can be more problematic that you might have considered.

In support of this position I would like to point out the comprehensive response that I wrote to Adam Smith Report; the executive summary and link to the full paper is provided below. While I fall on the pro-fair trade side of this discussion (believing broadly in the need for ‘contextually specific’ and the ‘appropriate’ governance of market forces which must remain the central system of economic organisation) I want to reiterate the point made by Marc Sidwell that views on this emotive debate must be grounded in evidence.

I agree the Fair Trade movement has been lax in providing statistically representative evidence on the effects they have achieved. However, after reviewing the Adam Smith paper I was staggered by the the over whelming lack of either empirical evidence cited in the report, or for that matter, indication that analysis had employed anything beyond a very basic understanding of economic theory (or how theory relates to real world problems). As a more personal extension of this position, I would like to comment that projecting such poorly founded discourse, is in my view, ‘irresponsible’ – especially where sources are misrepresented and basic scholarship found lacking (see the appendix of my own analysis for the errors made in the AS report). I hope anyone placing faith in the views of the Adam Smith Institute will ask some very searching questions about the rigour and validity of this paper when forming opinions on the subject of Fair Trade (I make no comment on the other work of the institute with which I am not well acquainted). Let’s be guided by a pragmatic approach to solving real world questions, not the blind faith in economic doctrine and ideological blinkering To bring me to where I started, lets not accept arguments that fit our wider views without critical appraisal – the results of which we might never see, but nevertheless could well mean a great deal to someone, somewhere….

See:
http://www.brass.cf.ac.uk/uploads/TheFairTradeCupResponsetoAdamSmithD9_1.pdf

Executive Summary
Overall the analysis in this paper agrees with the Adam Smith Institute in that:
· There is a serious need for ongoing research and evaluation of Fair Trade (and indeed any poverty reduction or developmental intervention) to ensure that resources are not wasted in well intended yet inefficient, or, utility reducing strategies.
· Fair Trade should not be accepted or promoted as, the only or the best
consumption based strategy for alleviating poverty. There are many worthy certification schemes and charities that are well deserving of support.
· The provision of appropriate incentives for producers and consumers inside a regime of international trade is strongly linked to incidences of economic growth and poverty reduction.

However, our own analysis leads us to seriously question other aspects of the Adam Smith Report in that:

1. The specific arguments against Fair Trade lack a credible basis in either empirical evidence or theoretical understanding because:
· Many of them are no more than assertions bereft of any attempt to cite
evidence.
· While some points do reference appropriately rigorous academic and
institutional research, other evidence is of a lower and arguably
insufficient standard of credibility.
2. There is a lack of cohesion as many of the criticisms of Fair Trade contradict the suggestion that patronage is allocated to other mechanisms instead.
3. Any idea of positive benefit from Fair Trade governance remains unexplored.
4. The lack of sophistication extends to the evidence cited in support of the argument that universal liberalisation is the best way to reduce poverty.

Ultimately it is suggested that the Adam Smith report:
· Fails to establish suitable grounds for the rejection of Fair Trade.
· Fails to establish an appropriately credible case in favour of trade
liberalisation.
· Fails to take an appropriately rigorous attitude to the evaluation of what are incredibly important issues.

In place of the approach taken in the Adam Smith report this analysis suggests that:
1. The cases of China, India and Hong Kong show that it is the appropriate management of local economies in their interaction with the wider world that is the best way to reduce poverty. Far from universal liberalisation this has often included the active management of price incentives as well as direct investment to build the capabilities of local business and the poor.

2. Financially poor actors should not always be expected to voluntarily respond to market incentives because:
· The developing world is characterised by levels of risk and instability that can make long term planning difficult to carry out.
· By definition the poor lack the capabilities necessary to meet the
immediate and longer term costs of diversification into more beneficial incomes strategies.
· The developing world often lacks the market incentive structures necessary to promote the structural change that might be necessary to reduce poverty.
3. Poor commodity producers are likely to be assisted in their effort to make the necessary diversification decisions through the provision of:
· Prices that cover the cost of sustainable production for as much output as possible, with the aim of reducing immediate levels of poverty and
building the capabilities of those unable to benefit from market discipline.
· Long term contracts that offer a more stable environment in which to make decisions about the diversification of income strategies.
· The payment of upfront credit and an additional social premium to build
capabilities which can be used to facilitate diversification.

Ultimately it is concluded that:
· The case against Fair Trade is not strong enough to recommend a rejection of such a well established mechanism which is empirically proven to help with the reduction of poverty in a significant number of cases.
· The management of market incentives systems cannot be rejected wholesale, but instead individual strategies must be evaluated on the specifics of individual cases and contexts. This applies equally to state intervention and the Fair Trade minimum prices.
· The most appropriate response to criticisms of Fair Trade is to continue a broad based program of research with the aim of making recommending reform of the governance mechanisms.