The Fairtrade Foundation has hit back at claims the label is leaving Third World farmers worse off and is not aiding economic development.

The criticism, made in a report yesterday (25 February) by the Adam Smith Institute, claimed the Fairtrade brand is a “nice idea” but questioned whether it really helped farmers.

Today, the Fairtrade Foundation issued a statement saying the scheme is “making a real difference on the ground”.

“The current system of world trade completely fails the two billion people who work incredibly hard for a living, but are still struggling to survive on less than US$2 per day,” said a spokesperson.

The insitute, a UK-based body that supports free trade, claimed Fairtrade locks farmers into producing agricultural commodities. The Foundation has dismissed that assertion and said the scheme enables communities in difficult circumstances to change their lives.

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“Because Fairtrade acts as trade for social development the benefits spread out from the certified farmers’ organisations to the wider community through the investment of Fairtrade premiums in better health and education, improved roads, environmental programmes and stronger businesses,” the spokesperson said.

The Foundation is keen to state it is not forcing anyone to join a fair trade producer or buy the same.

UK sales of Fairtrade products soared 81% to GBP493m (US$972m).