Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment What Tanzania’s Coffee Farmers Can Teach the World: A Performance-Based Look at the Fair Trade–Free Trade Debate Bradley D. Parrish, 1 * Valerie A. Luzadis 2 and William R. Bentley 2 1 University of Leeds, UK 2 State University of New York, USA ABSTRACT Questions remain about the effectiveness of fair trade, especially in comparison with free trade approaches to development. Both strategies seek to benefit smallholder farmers in lower-income countries, who are vulnerable to declining and fluctuating commodity prices and rising production costs. This study examines two prominent market-based interventions, Fairtrade certification and TechnoServe business devel- opment, as they are implemented at two coffee producer organizations in Tanzania. Qualitative and secondary quantitative data were collected using rapid appraisal methodology during three months of field research. The data were analyzed using the sustainable livelihood framework. This study concludes that both intervention strategies yield potentially valuable results for smallholders in multiple domains, but each is distinctly suited to specific market conditions. Implications of the study’s findings are discussed in terms of an emerging consensus on intervention strategies. Copyright © 2005 John Wiley & Sons, Ltd and ERP Environment. Received 5 August 2004; revised 17 November 2004; accepted 11 March 2005 Keywords: Tanzania; East Africa; coffee; fair trade; TechnoServe; sustainable livelihoods; smallholder development Introduction S MALLHOLDER FARMERS IN LOWER-INCOME COUNTRIES ARE VULNERABLE TO WIDE COMMODITY PRICE fluctuations and declining relative prices. In response, various market interventions have been designed to reduce smallholder vulnerability. Fair trade is a market-based approach to smallholder development that attempts to use consumer demand as incentive to restructure global trading rela- tionships. By contrast, free trade approaches to development emphasize liberalizing markets and increas- ing competition and smallholder efficiency as the route to improved smallholder well-being. To date, analyses of the fair trade approach have not reached a consensus on its effectiveness and appropriateness, especially in comparison with free trade approaches to development. Studies of the fair trade model that use a broad definition of farmer benefits (Dankers, 2003; Ronchi, 2002a, 2002b; Hopkins, 2000) find fair trade approaches beneficial to smallholder development. Other *Correspondence to: Bradley D. Parrish, Sustainability Research Institute, School of Earth and Environment, University of Leeds, Leeds LS2 9JT, UK. E-mail: bradley@env.leeds.ac.uk Sustainable Development Sust. Dev. 13, 177–189 (2005) Published online in Wiley InterScience (www.interscience.wiley.com). DOI: 10.1002/sd.276