Does Fairtrade take away the upside?

An interesting tidbit in an article about the mystery (well, not any more) trader who bought all of Europe's cocoa:

Barbara Crowther, a spokesman at the Fairtrade Foundation, said that no farmers in West Africa would benefit from the higher prices. She said: "This speculation only serves to increase volatility and uncertainty. Part of the problems in rent years have been the lack of investment in improving cocoa farms. But the farmers have already been paid a set price – none of this money will filter down to them."

If this is true, it points to a serious potential flaw in Fairtrade programs - the inability of participants to capture upside profits from price spikes. For many commodities, profits are concentrated heavily in a few spikes on a through-cycle basis, so missing out on those spikes is a big blow. Maybe Fairtrade compensates farmers in some way for the volatility premium it could be harvesting, but I'm skeptical until someone shows me.