Comercio Alternativo
source: Ten Days for Global Justice
Fair or alternative trade holds that the economy can be a way of meeting basic human needs without harming the Earth and exploiting people. Fair trade takes many forms, but all have common values and beliefs. Three of the most important are that:
- the workers who make or grow the product should be treated with dignity and fairness.
- the businesses who bring us the products we buy must put people’s needs ahead of their profits, and be accountable for their practices to people beyond their shareholders.
- the consumer, or buyer, should become aware of the conditions under which the product is made and put people’s needs and dignity ahead of low prices.
- FAIR PRICES Trade should empower rather than exploit. In particular, prices paid to producers and workers should guarantee a minimum and fair return for their labor.
- RESPECT FOR WORKERS’ RIGHTS Workers should have the right to organize themselves into cooperatives and unions and to bargain with their employers. Employers should respect the national minimum wage and health and safety laws, and should not use bonded, forced, prison, or exploitative child labor. There should be reasonable social welfare provisions and no discrimination.
- CARE FOR THE EARTH Suppliers and buyers should promote environmentally sustainable development and conservation of natural resources.
- QUALITY, NOT CHARITY Products should be of high quality. Marketing should stress quality, not charity. When transactions are equitable on both sides, a reciprocal relationship of partners, rather than benefactor and recipient, evolves. As complementary partners, respect and dignity emerge and develop.
- CONSUMER RESPONSIBILIY Customers should be encouraged to understand trading relations and to be aware of the impact of their purchases.
Fair trade has one final principle - it won’t work unless we make a decision to buy fair trade products. Every dollar we spend goes to support someone; why not give that money to small producers or businesses that respect people and the environment? While we’re at it, we can also learn more about the people who work to clothe and feed us. Fair trade asks us to meet our needs with more than money in mind. Fair trade products don’t necessarily cost more, since they often avoid layers of middlemen and expensive advertising. Where products do cost more, fair trade asks those who can afford it to accept the need to pay a fair wage to everyone. And our dollar isn’t our only vote. We can write to companies or visit local stores, asking them to provide fair trade alternatives; we can encourage them when they do start to provide union made clothing or fairly-traded food. Get informed, and make a choice.
(or How Conventional Coffee Trade Steams Us Up)
source: Equal Exchange
In conventional coffee trade, coffee takes a long and expensive journey from grower to consumer, making stopping along the way to give a cut of the profits to retailers, roasters, exporters, processors, advertisers, taxing agencies, creditors, and a host of middlemen, often known by farmers as "coyotes". If a consumer buys a bag of coffee for $10, the retailer gets $2.50 of that, the roaster nearly $5, then after the shipper and other go-betweens get their cut, the grower pays the workers, and ends up with about $.70.
Coffee originates from either plantation estates or small farms. While
plantations are traditionally run and owned by wealthy landowners, the small
farms are often owned by impoverished farmers. These farmers frequently live
in isolated communities and rely on the coyotes to buy their coffee,
invariably for the lowest price possible. So, the coffee leaves the farmer to
begin its journey through the coffee chain, traded from one middleman to the
next until it ends up being bought and sold on the commodities market directly
to an importer. Through the Equal Exchange and American Friends Service
Committee, you can become a part of an alternative to this system: fair trade.
Whereas most cocoa on the world market is bought "blind" through importers and brokers, the flow of certified fair trade cocoa is monitored—from the farmers to the store shelf—by independent, nonprofit, certifying organizations. These two organizations, FLO International and TransFair USA, guarantee that the cocoa was produced and traded in a socially responsible manner—specifically that International Labor Organization Conventions 29, 105 and 138 on child labor and forced labor are adhered to.
Giving Coffee a New Flavor
source: Ten Days for Global Justice
Coffee as an agent of change? You mean it’s not just a hot, mildly addictive brew?
That’s what coffee becomes in the hands of alternative trading organizations (ATOs). The same goes for tea, bananas, and chocolate - as well as growing a variety of products traditionally only grown in developing countries of the South. Throughout the world, these small organizations are challenging how international trade is conducted - sometimes at the risk of lives and livelihood.
Historically, developed countries have set the terms for how world commodities such as oil, minerals, and tropical foods, are traded. Developing countries had little choice but to accept the terms offered. Alternative trade is a way to address that inequity, not through charity, but through the daily practices of international business. It’s a way of using consumers’ buying power to help producers help themselves.
Alternative traders have focused on coffee as their lever of change, a commodity in which setting up fairer trading relationships can make the most difference. Coffee is the second most highly traded commodity in the world after oil, and the industry is a major employer throughout Latin America, Asia, and Africa. Even when prices rise, the producers can neither expect to see any benefits, nor count on prices staying high.
Meanwhile, in developed countries, consumers are more willing than ever to pay premium prices for high quality coffee. Where does the money go? To retailers, roasters, exporters, processors, taxing agencies, creditors, and a cast of middlemen known derisively as coyotes. Speculators in the world’s money markets also take their cut, as they bet on swings in coffee prices that have ranged from U.S. $1.15 a pound in January of 1997 to $3.00 by the spring, and down to $1.90 by August. Less than ten percent of that price goes to the farmers, upon whom coffee quality depends. And it’s clear that they can’t count on high prices to remain high long enough to break their cycle of poverty.
Alternative trade cuts out the middlemen in the export country. By setting up direct trading relationships with coffee-farming cooperatives, ATOs can pay farmers a fair price: a price that covers the costs of production, a price that guarantees farmers a living wage for their labor. Alternative trade is a departure from the way international trade has been conducted for centuries, and it is radically different from the usual solution offered up to help: charity.
Alternative trade goes far beyond charity. Instead of making one-time
donations that provide temporary assistance, consumers create a stream of
economic assistance by buying alternative-trade products when they shop. They
use their dollars to vote for fair trade. Rather than making a donation to
charity after the company’s costs are secured, ATOs give up-front, in the form
of premium prices for farmer’s crops. Over time, the premiums pay farmers up
to twice what they would have received on the open market.
That’s the difference alternative trade makes.
Who’s Getting Roasted
Small-scale family farmers in developing countries who grow crops for export are locked into a permanent cycle of poverty. They live at subsistence level with little hope for the future. Farmers with five to ten acres of land isolated in rural areas don’t produce enough to export directly.
As a result, they are forced to sell to mid-level traders, or coyotes, at very low prices. Although these middlemen (women are seldom involved) perform valuable services, such as picking up the product, processing for export, and providing credit, they control their turf like Marlon Brando in "The Godfather," demanding loyalty, favors, and absolute control.
The middleman’s power is limited, however, because the prices for most crops are set by international commodity markets. Raw agricultural products, such as coffee, tea, and cacao (used to make chocolate), are valued much lower than manufactured goods. Since it is rare for farmers to do their own processing, packaging, and marketing, most of the profit goes to the people who buy the commodities and turn them into saleable items.
The farmers, without whom we would go hungry, go hungry themselves.
Few farmers have any cash surplus to tide them through until harvest. Banks won’t lend them money. Governments sometimes make loans available, but at 30 or 40 percent interest. Most farmers must rely on coyotes for credit, further increasing their indebtedness to them, further decreasing their chances of breaking the cycle of poverty and dependence.
This scenario probably isn’t unfamiliar to us. Farming, raising livestock, and fishing have always been risky ventures in North America, and they are becoming even more so as livestock and fish stocks decline, soil quality falls and safety nets such as subsidies are removed. Many farm workers, especially migrant workers, tell us that we have a long way to go towards fair treatment of the people who produce our food.
With its principles of fair prices to the producer, sound environmental practices, and cooperative organization, fair trade combines many of the principles historically upheld by organizations such as co-ops and farm marketing boards. And because fair trade tries to link producer and community as directly as possible, fair trade doesn’t happen a world away - both its principles and its practice involve us directly.
Making Coffee Strong
Some farmers in the South have also improved their situation by forming marketing cooperatives. Cooperatives form the foundation of the fair trade movement, from Central America to Sri Lanka to the United States - no matter whether the product they produce is tea, coffee, or crafts. Farmers or craftspeople in a region or community form themselves into producing and marketing associations controlled by their membership, which is why coffee’s small scale production is an ideal setup for fair trade. These co-ops enable farmers to pool their resources, while providing technical assistance, transportation, schools, and health clinics that the government does not or can no longer provide. Co-ops (especially those producing crafts) also offer women a say in decision-making and planning that they’re usually denied.
Farming your own land rather than laboring on a large landowner’s property
can be a revolutionary idea in many parts of the South. This makes a
cooperative of small landowners a concept that is both radical and practical.
Throughout developing countries, cooperatives have become vital to the efforts of indigenous peoples and small farmers to hold on to their lands and build locally-controlled development initiatives. In the North, alternative trade organizations (ATOs), such as Equal Exchange in the United States, link those farmers to the consumers: us.
Through these ATOs, farmers are able to sell their coffee directly, rather than through middlemen, and as a result receive a better price for their beans. One of the basic principles of fair trade is that ATOs pay a fair price to the farmer, including a guaranteed minimum floor price when the world market goes through one of its frequent downswings. When it takes three to five years for a coffee bush to yield its crop, price guarantees can be a matter of survival. So can advance credit, made available to the cooperatives at reasonable rates through Northern ATOs.
With this credit and the market connections offered by alternative trade, farmers can take the further risk of growing organic coffee. Agriculture often goes hand in hand with expensive chemicals that are harmful to workers, soil, and water supplies. By contrast, fair trade arrangements throughout the world encourage the production (and purchase) of coffee that doesn’t use chemicals. Instead, farmers continue to grow varieties of coffee that develop best under the protective shade of larger trees, and in many cases have started composting programs that convert the discarded outer shells of harvested beans into a natural fertilizer that’s both safe and free.
Another benefit of working cooperatively is protection and security. These peasant farmers have few allies. The people who profit from the status quo - the coyotes, the drug dealers, guerrillas, corrupt government officials - are angry when small farmers organize. Some threaten and even kill those who try to become independent. When the UCIRI (Union of Indigenous Communities of the Isthmus Region) co-op in Mexico was struggling to organize farmers, coyotes hired assassins to discourage people from joining. In Colombia and Peru, co-op members have been caught in the crossfire among the military, drug dealers, and guerrillas. At times they have had to pay money and donate livestock to guerrillas in the area in order to keep their farms.
Successful fair trade enables cooperatives to strengthen their own organizations, building locally controlled structures which are democratic and independent from the government and big business while providing a sustainable economic base for their communities. The standards of fair trade, which are agreed upon by international partners, provide a framework that ensures that the economic benefits of the coffee trade reach the people that actually grow the beans.
Once a co-op is formed, it must find markets for its products- no easy task, in a world where huge corporations run the show. ATOs can provide a critical bridge to success in this area. In addition to paying well above the market price, ATOs help the co-ops become established as exporters, from intervening with the reluctant government officials to buying the co-op a fax machine. Some ATOs have also made or guaranteed loans from other sources, such as international church groups.
Cup Overflowing
Compared with Europe, alternative trade in North America is still in its infancy. Germany was the first country to introduce the TransFair International fair-trade seal. The seal means that the coffee was traded according to internationally recognized fair trade standards. The seal has helped to expand fair trade beyond ATOs to main stream companies. In its first year, the TransFair seal was adopted by more than 20 percent of German roasters. The success in Germany has led to TransFair brands being launched in Austria, Luxembourg, and Japan.
The first national fair trade campaign was launched in the Netherlands in 1989 by a coalition of ATOs, church groups, and consumer organizations. The coalitions created a fair trade seal known as Max Havelaar - named for a famous fictional character who campaigned for workers’ rights on Indonesian coffee plantations. Currently, 20 brands of coffee bearing the trademark are available. In Switzerland, the two largest national supermarket chains, which a combined market share of 70 percent, have introduced private label versions of the Swiss Max Havelaar seal. In Great Britain, the brand Cafedirect was introduced by a coalition of British ATOs. Cafedirect is now available in three out of four stores in the country. These uniform symbols of fair trade represent a major advance in the acceptance and marketing of products imported by ATOs.
It’s true that fair trade isn’t the answer for everything. Those involved know that the strongest network can be set back by world trade policies, which assume that making a profit is the only bottom line that matters. Sometimes co-ops have difficulties with governance or long-term survival. And while fair trade still centers largely on agricultural products, it is only beginning to address the fact that women produce the majority of the world’s food and agricultural exports, but very often have no say in decision-making related to food production. Even as Northern coffee drinkers learn more about the people who grow that coffee, they’re still a long way from hearing many women’s voices.
Back here, growing unemployment and poverty raise concerns that many people will not be able to afford the "fair price" of coffee, which may be slightly higher than the generic blends of coffee found in grocery stores. And it’s difficult to get around the fact that precious land in the South is being taken to grow commodities for the relatively rich North. As our earth’s capacity stretches past its limit, more and more people are arguing that people in the North need to start consuming less of everything - including imported foods that divert land away from growing healthy food for the South. Still, small scale coffee production allows coffee to be planted alongside food crops, and, because it grows best in the shade, helps slow deforestation while providing habitat for migratory birds.
While the fair trade model is very effective at bringing direct benefit to farmers, it is still small-scale compared to the conventional coffee trade. For cooperatives to survive and grow, they must find markets for their products - whether this be coffee, tea, bananas, or chocolate. For fair trade to reach the farmers that need it most, consumers must demand fairly traded products where they shop.
Fair trade is a start a bringing justice to a world trade that has never benefited the very people who do most of the work. With enough support, it can become a healthy alternative economy. Recognizing that our world economy is driven by people constantly buying and selling, fair trade tries to introduce some safeguards and dignity to the whole process, exchanging the supposed "freedom" of the world market with some real life guarantees.
Fair trade turns our usual view of the "free market" economy on its head. The bottom line is not the "lowest price" for consumers, the assumption is not that the players who control the market have the right to make major profits at any cost. Fair trade holds everyone accountable, from the producer to the consumer. Fair trade assumes that we have the power to make conscious choices about the products we buy. It believes that we have the commitment to take this a step further by carrying that concern to a variety of products and expressing it publicly - because if we don’t, nothing else in the "free" market will.
By TEN DAYS with much assistance from Myrna Greenfield and Erbin Crowell of Equal Exchange (USA), and from Bridgehead (Canada).
So, what is a cooperative? Equal Exchange’s cooperative partners are actually businesses owned and governed democratically and directly by the farmers. Decisions are not made based on who has the most wealth, but how the collective resources can best be managed to improve the welfare of the whole community as well as that of each family.
Cooperative structures enable farmers to pool their technical and financial resources, thus giving them strength to compete in a marketplace that otherwise would lock them out. Cooperatives offer community services, such as healthcare, education, public transportation, and, most importantly, the pride and dignity to create a better life for the members and their children.
And, like its partners, Equal Exchange is a cooperative - a fair trade organization owned by its workers.
Last changed: January 2003.