Reclaiming Fair Trade – A Reflection

Presenting our first guest blog by Nora Burkey, who Social Business Network has the honor of hosting for her Master’s research in Sustainable Development: 

While fair trade enthusiasts are quickly dropping their affiliations with certifying bodies, explaining it is because they are still committed to original standards whereas new members are not, the confused reader, inundated with information about poor farmers just getting poorer—fair trade or not—might wonder why fair trade ought to be defended at all.  Remember that income accounting does not create the whole picture.  Fair trade has contributed to increased access to credit at lower interest rates, more childhood education, a greater degree of food-security, and more.  Fair trade premiums to cooperatives also benefit farming communities as a whole, such as greater access to healthcare for the whole village.  But fair trade wasn’t just about poverty, it was about revolution, and its successes and failures ought to be looked at in that light.

Fair Trade offered the cooperative structure as a solution to privately-owned farms that have an unfair system of wage labor.  This allows farmers ownership of their land, not just their labor, and provides a democratically governed body to oversee social projects and communicate with buyers without being owned by them, leaving decision-making with the farmer.  So when large coffee plantations can become certified as fair trade, as Fair Trade USA recently decided to allow—breaking off from Fair Trade International in order to do so—what we have is a private system that has nothing to do with what fair trade ever meant to imply, and what fair trade ends up meaning is something like minimum wage with a social premium benefit.  And whereas before 20% of a product had to be fair trade to receive the label, now just a mere 10% is required by Fair Trade USA, so it’s not even minimum wage for all.

Under current standards, to sell fair-trade certified products, only 5% of a company’s sales must be fair trade, and there is no obligation to increase this percentage over time.  Nor are large producers required to slowly become more cooperative in structure by giving each farmer a vote and ownership over their own production.  The presence of large multinationals and large plantations at the table only limits a small farmer’s access to the market and ensures the largest piece of the pie goes to the largest producer or buyer.

The most damaging of all is that the weakening of standards has forced the founders of fair trade out.  No longer do the truly committed want to be associated with the term they created, as to many consumers, it denotes something so tame the only impact it makes is a bad one.  It seems anyone can create their own label these days and certify it independently, allies and enemies alike.  Some have stricter standards and some have weaker, but if consumers are not educated, it is impossible to know which label is which.  And since fair trade depends on consumers rather than the state to ensure it continues to be a part of commerce—it only exists as long as people are willing to buy fair trade products—creating so many labels, and so much confusion, is a lot like playing with fire.

The struggle is whether to reclaim the name that has been co-opted or admit that it’s already been stolen.  In my own life I choose to reclaim it, because I believe it is important that people understand fair trade was and is not a failure, it can only be failed.  I choose not to be someone that fails it, to be someone who fails to support all that fair trade has done.  The commitment still feels pretty radical to me, in all senses of the word.

Nora Burkey is currently a candidate at SIT Graduate Institute for a Master’s in Sustainable Development.  She became involved with Social Business Network in August 2013 after connecting with Dean’s Beans Organic Coffee Company, a trading partner of ÉTICO.  She currently lives in León, Nicaragua, and plans to continue working with Dean’s Beans and Social Business Network on development projects into 2014.

UK Nicaragua Embassy teams up with Social Business Network

The UK Embassador meets with the Juan Francisco Paz Silva board of directors, representatives of organized groups of rural women, and SBN in October 2013.

The UK Embassador meets with the Juan Francisco Paz Silva board of directors, representatives of organized groups of rural women, and SBN in October 2013.

Social Business Network is thrilled to have the support of the UK Nicaraguan Embassy, who recently awarded us a grant to deepen the impact of the Recognition of the Unpaid Work of Women in agricultural cooperatives.  The grant will be used to pilot the next phase of development in the women’s empowerment initiative with the Juan Francisco Paz Silva Cooperative, focussing on cultural and entrepreneurial education for women.  The initiative began three years ago and the ongoing funding, generated entirely through incorporating the unpaid work contribution of rural women into the costs of the cooperatively produced sesame oil and coffee, has largely been invested in savings incentives and technical assistance so that rural women have access and support to participate more fully in the local economy.  The support of the UK Embassy provides the cooperative with the means to push the initiative forward in its development, providing a core educational course in cooperativism, entrepreneurship and gender equality; additional skills-based workshops; marketing support; and the creation of a mural in the center of town recognizing the unpaid contribution that women make to community and family well-being.  This initiative has already become a model for other agricultural cooperatives, who adapt the principles to their own communities and contexts.  We are excited to see this initiative move forward and know that many other communities will also benefit from seeing the results of the additional support of the UK Embassy.  You can follow the Juan Francisco Paz Silva Cooperative’s achievements and other great initiatives in Nicaragua on the UK Embassy in Nicaragua’s facebook page.  Adelante!

Closing the Gender Gap

Image courtesy of the BBC, www.bbc.co.uk

Image courtesy of the BBC, http://www.bbc.co.uk

Last week the World Economic Forum published the 2013 Gender Gap report.  The report began in 2006 and since then has attempted to annual review the accessibility of each nation’s resources to men and women.  The report focusses on 4 areas of equality – health and survival, educational attainment, political empowerment and economic participation and opportunities.  The scores are then averaged to create an overall ranking of countries.

In Latin America, a relatively small region of the world with closely neighboring countries, there is a large discrepancy in the WEF report’s finding.  While Nicaragua just slips in to the highest ranking countries in the world at overall 10th place, Guatemala ranks 114th – the lowest in the entire Western Hemisphere after Suriname in 110th.  Nicaragua’s 10th place ranking has made national news and earned it a place on many summary reports such as this one from the BBC on par with the European countries at the very top of the list – like Iceland, Norway, and Ireland.  But a glance at the breakdown by area shows that Nicaragua’s scores are disparate:  While a law passed two years ago requiring all political parties to support 50% women candidates in local and national elections is most likely responsible for the 5th place rank in political empowerment, the country lags behind in other areas, most notably in Economic Participation and Opportunities where it ranks 91st.  In these productive yet still resource-tight countries, there’s no question that closing the gender gap every year overall marks important advancements in the quality of life for its citizens.  But there’s still a lot of work to be done, which is why this report supports the relevancy of Social Business’s work with economic empowerment like the Recognition of the Unpaid Work of Women.  In fact, across Latin America the rankings for equality of Economic Participation and Opportunities fall in the 90th and 110th percentile, yet another reason to support equitable trade and trading organizations like cooperatives that uphold gender equality as central principles in their work.

Wales Solidarity Campaign report on Human Development conference

Our friends at the Wales Nicaragua Solidarity Campaign also attended the recent Human Development and Capability Association conference, held in Managua in September. Here is their report –

wales nicaragua cymru

More good news from Nicaragua, at least if you’re one of the millions of ordinary people in the country. A conference in Managua in September, organised by the Human Development and Capability Association, heard that Nicaragua would meet all its Millennium Development Goals by 2015. The HDCA is the brain-child of Amartya Sen, the Nobel Prize winning development Economist. Attending the event, Sen emphasised the need for policies that combined growth with investment in public services – health and education – leading to greater re-distribution.

8mdg_en

Nicaragua drew praise from the World Bank (a common occurrence these days) for the way that incomes of the poorest 40% have grown four times as fast as for the entire population. But anyone who is familiar with Nicaragua’s struggle to achieve the Millennium Goals – a distant prospect under a succession of neo-liberal governments – will be glad to hear the words of the…

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When failures matter more

This year Nicaragua hosted the 2013 Human Development and Capability Association’s annual conference.  The three day event was held in the University of Central America and the participants represented a diversity of organizations and universities from 44 different countries.  The final speaker of the conference was Joshua Cohen, an American philosopher and professor at Stamford University.  His talk focussed on his experiences bringing together students from CA and Nairobi to design mobile technology innovations that address health and human development.  His examples included several pilots that failed – point being, it’s important to fail and learn from your failures so you can apply that to your next pilot.  As long as your keep trying, you will have success.  

In the Q&A, Social Business Network’s representative at the conference asked Cohen why it is acceptable for individual startups or pilots to repeatedly fail, while other models of business development such as cooperatives are written off when they fail.  While unfortunately Cohen agreed but couldn’t offer any further insight, it is worth considering when analyzing supply chains.  Many critics of Fair Trade, for example, will cite a failed cooperative business as proof that the model doesn’t work.  But how often do you read that private corporations are an inadequate model for development because one goes bankrupt?  We are quick to forgive or blame individuals for embezzlement, tax evasion, or bad management, but when the same problems occur within a cooperative or social business setting the structure is often scrutinized rather than the individual.  

Founding director of Social Business Network, Nick Hoskyns, talks about the importance for there to be a reason for a cooperative.  Because of the inherent egalitarian structure, cooperatives are often seen as an appealing method for social development.  But problems occur when the formation of the cooperative is seen as the end rather than the means to the end – with the goal being creating a successful business.  Cooperatives that are formed for the sole reason of bringing people together to raise themselves up out of poverty rarely succeed. Cooperatives are successful for the same reasons that private businesses are – they produce a quality product for a growing market.  And they fail for the same reasons that private companies fail – market shifts that make the same product cheaper from another source, bad management, or poor leadership.  successful cooperatively owned brands such as Ocean Spray, Cabot Creamery, and the Co-operative in England are not exceptions to a rule, they are examples of good business ethics and skills applied to a model that builds leadership and democracy, and encourages equal wealth distribution.

 

Tecafé – a collaboration with Wales

The Wales Nicaragua Solidarity Campaign has partnered with Ético and Nicaraguan cooperatives SOPPEXCCA and CECOCAFEN to offer a fair trade women’s grown coffee in Wales, Tecafé.  While the name may be confusing for those who speak Spanish – Teacoffee? – they explain that Tecaf is the Welsh word for fair, and so the name really embodies the partnership created between Nicaragua and Wales through the purchase and sales of this coffee.  Read more about the good work of the Wales Nicaragua Solidarity Campaign and watch a short video about their new coffee brand on their blog.

 

Women from the Juan Francisco Paz Silva cooperative in Achuapa, Nicaragua

Press Release – Successfull Celebration of Women’s Empowerment Initiative in Nicaraguan Supply Chains

First-ever initiative to count the unpaid work of women in agricultural commodity production is successful in Nicaragua 

Ético: The Ethical Trading Company Ltd., British NGO Social Business Network, and Nicaraguan farmer cooperatives celebrate the ground-breaking innovation to Recognise the Unpaid Work of Women in Ethical Supply Chains.

 Ético: The Ethical Trading Company and British NGO Social Business Network are pioneering the first ever initiative to Recognise the Unpaid Work of Women in Ethical Supply Chains. Traditionally, the price for commodity products include only direct input and labour costs, and fail to recognize or take into account the supporting unpaid work which is done mainly by women.  This is the first time that rural women’s unpaid work has been recognized as a necessary input into production and one that should be valued and remunerated. This initiative was presented on July 3, 2013 to a group of 100 invitees, including representatives from Fair Trade companies Twin, Equal Exchange, and Liberation Nuts, the Nicaraguan Embassy, UK Government officials and Tesco.  The event was organized by Ético and Social Business Network, with support from Hoare’s Bank, the Bulldog Trust, and Raleigh International.  The speakers explained the pilot stages and preliminary evaluation of the initiative with small-farmer sesame and coffee Cooperatives in Nicaragua.

The initiative developed in 2008 during a visit of the Body Shop with the Juan Francisco Paz Silva Cooperative in Achuapa, Nicaragua.  Ético gender advisor Catherine Hoskyns conducted a pilot study of women’s labour in sesame production.  Her initial findings revealed that when women’s indirect labour (eg. cooking food for field labourers) and more general domestic work are included, this counts for around 22% of the total labour input in sesame.  The results of the study were used to apply an additional cost to the price of the sesame oil for cosmetics, and has since been used to apply similar costs to the sales of coffee from Nicaraguan Cooperatives.  The Cooperatives use the increase in price margin to organize women’s empowerment activities in their communities, such as education, savings and loans schemes and labour organisation, which bring women together and strengthen the cooperatives.

Left to Right: (Back row) Liberty Pegg, Felicity Butler, Albert Tucker, Nick Hoskyns, Christina Archer (Front Row) Catherine Hoskyns, Rachel Lindsay, Julia Perez.  Photo Credit: George Selwyn

Left to Right: (Back row) Liberty Pegg, Felicity Butler, Albert Tucker, Nick Hoskyns, Christina Archer (Front Row) Catherine Hoskyns, Rachel Lindsay, Julia Perez. Photo Credit: George Selwyn

The event on July 3 demonstrated the transformative power of integrated supply chains.  It was held at 2 Temple Place and chaired by Albert Tucker, Director of Social Business Network.  The opening speech was given by Fiona Woolf, Lord Mayor Elect of the City of London and Trustee of Raleigh International, whose inspiration to support the event came from a visit to Nicaragua in 2012 where she was present at a meeting of women participating in the initiative.  She spoke of the impact that listening to the women’s experiences working with the program of the cooperative, and concluded, “That’s why… I will also be a champion for the unpaid work of women.  I think it has huge applications across the developed world as well as in the developing world.”  A vivid account of the different types of unpaid work which women do in Nicaragua was given by Julia Perez, of Achuapa Nicaragua, and Liberty Pegg, a former volunteer with Raleigh International. Catherine Hoskyns explained the initial calculation of women’s unpaid labour in sesame production and its significance, and Felicity Butler gave her first findings about the impact of the initiative. She is researching this through her Ph.D. at Royal Holloway University, which funded by the Economic and Social Research Council (ESRC) and The Body Shop.   Rachel Lindsay, representative of Social Business Network in Nicaragua, gave an overview of how this concept has been piloted in coffee sales and the support it has generated from the entire supply chain.  Christina Archer, Senior Buyer for Community Fair Trade Ingredients at the Body Shop, gave a testimony, emphasising that “This initiative does also make really good business sense, and strengthens the sustainability of supply chains… Our brand is about building self-esteem and empowering women, be they the women who use our products or the women in our supply chains”.  The event was concluded by Nick Hoskyns, Founding Director of Ético, who emphasised that when you bring together committed partners, you can use business to effect real change.   He emphasised that it was not easy to get this far but “with such good collaborators, many of whom are present, we have shown that we can still make trade fairer, just as we did with the establishment of Fair Trade”.  He also credited the cooperative organisations with being instrumental in the implementation of this initiative and using the additional funds so effectively for women’s empowerment.

Recognition of the Unpaid Work of Women

This summer Social Business Network and Ético will be celebrating our initiative to Recognize the Unpaid Work of Women in ethical supply chains.  Our pilot programme began in 2009 with the first-ever cost structure for an agricultural product that included economic remuneration for the traditional labor of women.

Much of the work women do in the production of agricultural commodities does not receive the recognition they deserve and is very often not remunerated.  These activities may be directly linked to production such as winnowing crops after they are harvested, safely storing crops at the home, and preparing food for field workers, or indirectly related to family production like fetching water, firewood and caring for children and elderly.  These are tasks that most rural women do regardless of whether their families grow crops for export, local sale, or autoconsumption.  Therefore, the value of the unpaid work of women has been calculated into the cost structure of our products and is included in the cost paid to the producer Cooperative.  The Cooperative uses these funds to empower women through making organizational, financial, and educational resources available to them.  Three years after the start of our pilot project, participation levels of women in the farmers cooperatives has risen sharply.  During a recent evaluation of the initiative with the Juan Francisco Paz Silva cooperative in Achuapa, Nicaragua, both women and men involved in the implementation were asked what the programme has accomplished since it’s inception.  Here are some of their responses:

  • a better relationship between women in rural communities (una mejor relación entre mujeres en las communidades)
  • women are taken into account (las mujeres son tomadas en cuenta)
  • more active participation by women (mejor participación activa de las mujeres)
  • development of creative potential in rural families (desarrollo de de creatividad en la economía familiar)
  • independence and security of having savings in their name (independencia y la seguridad de tener ahorros en sus nombres)
  • more women are joining the cooperative as full members (más mujeres se están uniendo a la cooperativa como socios)
  • other organizations are beginning to recognize the work women do (las mujeres son mas reconocidas por su trabajo de otras organizaciones)
  • a positive example of development for youth and the next generation (buen ejemplo para las/los hijos y jovenes y herencia generacional)

Social Business Network has partnered with trade companies, volunteer organizations, farmers cooperatives and universities to make this initiative possible.  Through our work this initiative has sparked lengthy passionate discussions about the roll of women and how to effectively recognize their contributions to society.  The academics we work with even raise the question of whether the unpaid work that women do in consumer countries has been successfully recognized yet?  This innovation in ethical trading clearly strikes universal chords. While it has been enthusiastically supported by buyers in several continents, it continues to be an organic development that offers as much through it’s process as with it’s results.  We are looking forward to celebrating these achievements and the bright future this programme has as it expands to help more rural women reach their full potential in their communities.

A Smorgasbord of Hoopla

certified-stampWhether you are a farmer, manufacturer, exporter, retailer or consumer you have undoubtedly been faced at some point with a decision regarding the many different ethical or environmental certifications.  The growth of certification has followed the growth in centralized distribution and global trade of products.  As the sheer number and variety of products available to consumer multiply, companies and consumer advocacy groups are using an ever increasing number of certifications – and their requisite symbols – as tools to differentiate products on the shelf and, through their intended implementation, affect positive changes in the lives and environments of the producers.

Historically certifications have been driven by consumer groups searching for a product that meets certain standards of production.  Supply follows demand – so once there is a demand created, producers need to be found who will opt to comply with the standards, either for ethical or economic reasons.

Individual certifications exist within a global socio-economic context that is rapidly changing.  Movements that begin with a specific cause and have grown rapidly find it increasingly difficult – or costly – to maintain their initial standards.  As an intermediary between links in a potentially lengthy supply chain, certifications need to maintain minutely detailed rules and records.  Even defining what you wish to enforce or promote may take years!  As any ecologist will tell you, rapid growth is unstable, and as certain certifications gain popularity (and profitability) standards are adjusted, fees are hiked, and consequently new certifications arise as central groups of consumer or producer advocates fraction in their attempt to maintain their original values in a new socio-economic context.

supermarket-aisle-grocery-store-shopping-cart-Favim.com-475341Many of the current debates around certifications focus on the labels of finished products, and the dilemma of the well-intended shopper faced with a befuddling array of different symbols at the grocery store.  How can they know which product has the best impact on the world? But the increased number of certifications presents producers with even more difficult decisions – often costly and risky.  The cost – both in time and money – for different certifications needs to be weighed by each producer against the potential market.  Sometimes this means a double risk – first if you are certified whether you will make the associated costs back through the difference in sales, and once you have promised a certificated product to a client, whether your production will meet the certification rigors.  Depending on whether your market is international, national, or direct to your consumer your choices for certification vary.  Not certifying at all is sometimes the best economic option – which is why a rise or fall in certifications doesn’t accurately represent an actual rise or fall in certain farming or trading practices.

In response to changing standards in widely recognized certifications such as organic and fair trade, peer-based alternatives and producer driven initiatives such as the Certified Naturally Grown and the new Simbolo de los Pequeños Productores are arising. In a market historically driven by consumer advocates rather than producers themselves, these certifications may be conduits for  empowering change. However, the growing list of certifications that producers are faced with begs the question, are certifications still the best means for enacting social, environmental and economic change through trade?

Launching the Sucre

The Bolivarian Trade Alliance for the Americas (ALBA) recently decided to launch the SUCRE in Nicaragua within the next two months.  The SUCRE is a virtual currency named after Antonio José de Sucre, a Venezuelan independence leader who was a compatriot of Simón Bolivar.  The participating countries, which include Venezuela, Cuba, Bolivia, Ecuador, Saint Vincent and the Grenadines, and Dominica, created the SUCRE with the hope of stabilising regional economies and further distinguishing ALBA trade agreements from the dollar-based FTAA that it was created as an alternative to.  In Nicaragua, the currency will be used for bookkeeping and to allow the country to keep fewer dollars in reserve to back up international trade.  It was first used in isolated trade agreements between Ecuador and Venezuela in 2010.  The launching of the SUCRE in Nicaragua is similar to that of the European union adopting the Euro, although there is not yet a hard currency.  The SUCRE marks another initiative for the autonomy and fuller empowerment of traditional producer nations.