As a fascinated fair trade newbie, I often have those amazing ‘Aha’ moments. You know the sort of thing I mean. All of a sudden, just as the ‘haze of unknowingness’ threatens to consume you once again, there, right before your bleary eyes is a tiny ‘infobite’: a snippet of wisdom that makes a part of your fair trade puzzle whole. Unfortunately the wholeness only lasts a moment, as you realise that the puzzle you’re working on is just one small frame of a much bigger picture.
Well you guessed it; I had one of those wonderful moments recently. And, of course it was followed by that stomach knotting question to self, “Yeah sure, but what about….?
Anyway, there I was reading Anne Tallontire’s 2000 article “Partnerships in fair trade: reflections from a case study of Cafédirect”. The article was about (what I now assume as outdated) Cafédirect’s core partnership with one of its producer organizations, the KNCU, a coffee marketing cooperative in northern Tanzania. While the article reviewed many aspects of their relationship, it was as I was reading Twin Trading’s (Cafédirect’s buyer) partnership approach that the ‘Aha’ moment happened.
According to Tallontire, for Twin, “partnership with producers” is all about “the USE of fair trade markets to develop the capacity of small scale producers”
“AHA – WOW – YES”… a massive muddle of previously disconnected and distorted images and thoughts suddenly made sense…so THIS is what fair trade and fair trade producer partnerships could REALLY represent!!!
My hands trembled as I read on. The central purpose of the fair trade partnership is to build up the producer’s international trading experience within the relatively safe confines of the fair trade market. Mistakes or difficulties are neither punished nor penalised, but identified as learning opportunities. The fair trade partnership is framed as an apprenticeship: a trade development program to up-skill and empower the producer organization. The goal: highly competent producers groups with the capacity and confidence to compete successfully within broader commercial markets.
“At last” I thought. “A fair trade partnership explicitly directed to trading and commercial independence”…FAIR TRADE PRODUCER GRADUATES!
What a concept! Producer groups who, through the support, guidance and teachings of their fair trade partners, are able to move beyond the security of the fair trade environment and make their way forth as empowered and independent international traders.
I felt all warm inside as I reflected on my vision of this fair trade future. OK, the functional/operational details were a bit thin; the support/teaching elements would require genuine international trading expertise; and the need for communicative excellence would be extensive…but still… what an ideal! What an aspiration to work towards!
Then there came the inevitable, “Yeah sure, but what about…” cloud to follow that moment of magic. Where was this wonderful fair trade partnership concept NOW? Has it been lost somewhere? Sure Cafédirect and Twin still have their PPP program, but it, like those of other founding ATOs, seems to have morphed into something quite different, where relationships and partnership arrangements are looking more embedded and entrenched than transformational.
Certainly, the dominant and more common fair trade partnerships espoused by FLO, WFTO and many smaller fair traders don’t look at all like this! Instead, they emphasize a fair price, social premiums, and greater access to mainstream markets. Sure, some development dimensions are still there, but they seem well and truly subsumed within ever increasing market priorities.
To me however, the most significant departure from this ‘apprenticeship: learn, develop, move on, out and upward’ approach is that the most recent fair trade partnership models seem to be encouraging even greater levels of producer/fair trade dependency. Producers and producer groups are now more than ever before being ‘locked into’ a fairtrade system where independent control and self- determination are no longer future options.
PLEASE HELP! Where has it gone? What went wrong? Is it still there, but blanketed behind the smog of fair trade marketing hyperbole?
Does anyone out there know?
Endnote: Hey Joe T: No kidding…to me…THIS is fair trade!
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Strikes me that was always an impossible objective.
HI Joe,
Thanks for your comment! Although I did find your skepticism a bit depressing. I am not sure I understand why you think that the idea sets an ‘impossible’ objective.
To me its about fair traders with significant international trading talent forming a partnership with a producer group with the intention of building their capacity as they hone their trade craft within a supported market. When they have the skills and capacity to succeed support is progressively reduced until independent success can be achieved.
The fair trade organization then moves onto support and scaffold another producer group.
Maybe the biggest issue is challenge of finding fair trade organizations with the necessary international trading talent to build the required trading capacity.
Sure it may be more complex than this and sure it is a big call but ‘impossible’??
Hi Scott,
I really enjoyed your article. I also agree that training or apprenticeship is a crucial piece in the process of creating sustainable businesses. While price floors and pre-financing help to smooth out fluctuations in cashflow, their has to be an educational component to fair trade. This is precisely why we launched the Shared Interest Foundation in 2004.
SHARED INTEREST FOUNDATION
We see a world where people can trade as equals.
Across the developing world, fair trade is providing communities with
opportunities not available to many of them before:
A chance to educate their children
A chance to work their way out of poverty
A chance to create better lives and livelihoods
Education, training and access to fair finance are essential in supporting these
disadvantaged communities to make the most of their talents and hard work.
Shared Interest Foundation exists to support these communities.
We provide training and education for fair trade producer groups, especially in
business and financial management – programmes to improve the performance of
producers’ businesses thereby securing jobs and incomes for thousands of people.
We work with our sister organisation Shared Interest Society, a leading fair
trade lender, to help producer communities to access the finance they can
afford.
To read more about our projects please see
producer training.
We have been successful but want to do more. To support our work please
donate now.
With your support, we can harness our position at the heart of the fair trade
movement to reach more producer organisations – and through them the communities
they serve.
Well I mean that Fairtrade is working with small producers and on the whole bulk products in the mainstream market are big plantations. However much work fairtrade does, it is unlikely that the producers will be able to compete on a level basis – even if the terms of trade were advantageous, which most of the time they’re clearly not. Hence the whole purpose of a niche fairtrade market.
What products would these producers be able to make/grow which could compete in mainstream markets without creating a niche market?
I think the real question is why we’ve gone down the road of a ‘niche’ ethical market rather than any other kind of niche market. And another quick thought – the producers have ended up working in a fairly mainstream market as the fairtrade products become mainstream!
Hi Scott
Great to have your input on this. Cafedirect has indeed being doing a huge amount since 2000, investing over 50% of our profits in producer partners’ businesses to ensure that they are financially, socially and environmentally sustainable. This 50% is of course on top of the guaranteed minimum Fairtrade price and the additional social premium for communities. This funding goes into projects such as governance training and quality control developing capabilities internally within the cooperatives to trade successfully on the international market.
Several examples of these projects are shown on our website, including Lydia’s story, detailing her career as a Coffee Quality Officer which included visits to the UK and training in Kenya.
http://www.cafedirect.co.uk/our_partners/africa/uganda/gumutindo2
In addition, we are just concluding AdapCC, a 3 year environmental private-public partnership with GTZ (German Technical Cooperation) to develop adaptation strategies to help smallholder farmers deal with the effects of climate change. More information on this project can be found here:
http://www.cafedirect.co.uk/our_business/environment/climatechange
Our Producer Partnership Programme (PPP) is also evolving and we will be announce the developments to that programme imminently. So watch this space!
Hi Patrick,
Thanks for your comment and all that interesting information on the Shared Interest Foundation. You are certainly doing lots of work with producer groups.
You mention your programmes to improve the performance of producers’ businesses. I was wondering if you feel from your extensive experiences that this sort of training and support provides producer groups with sufficient business and trading expertise for them to compete outside of the protected fair trade environment?
I ask this in light of Joe’s point that there are too many factors working against producer groups for them to develop sufficient capacity to survive in the commercial market, niche or mainstream?
Also best wishes for the SI Foundation!
Cheers
Scott
HI Joe (again)
Thanks for coming back. I really appreciate you taking the time to explain you thinking more fully! I can now understand better you point about “impossible objective”
So you seem to be saying that any capacity building of producer groups is realistically only of value for the producer group as long as they remain within the protected fair trade environment? And the capacity building with the intention of helping producer group to compete outside the niche ethical market context is pointless.
You might note that I have asked Patrick to offer his sense of whether it is realistic to envision ‘Fair Trade Graduates’ or does he see the terms of trade odds too heavily stacked against the producers fair traders work with.
Re the niche as opposed to the niche ethical…this is an interesting thought…I don’t have the experience to answer this…maybe it was simply that niche ethical was easier to develop and sell?? Do other’s out there know?
I see your final point as a telling one and I guess I see it as related to my closing paragraph in that the current dominant ‘fairtrade system’ locks producers into whatever path it decides to follow. I know that many would argue that producer groups are part of and are represented within that system but I question the decision making influence or power of their voices!
Hi Jacquie,
It was terrific to hear your perspectives, as the article was about YOUR partnership history! Thanks also for providing the details of Cafe’direct’s amazing commitments to their producers. Your Producer Partnership Program (PPP) is to be applauded!
However, the point I was trying to make in my post, and what I really liked about yours and Twin’s original idea, was that your ‘original’ producer partnerships were focused on developing producer ‘independence’ from the fair trade environment. Fair trade worked with producers only for as long as their ‘apprenticeship’ was required.
I also made the point that this was no longer the case with groups like yourself or Divine, who have gone for a much more embedded partnership model, where you and your producer partners are shareholders in your respective brands: thereby creating a much higher level of dependency on your brand and subsequently fair trade.
So as I see it, when you talk about your PPP, it looks more like a ‘Cafedirect’ business development concept rather than a partnership designed to create producer independence!
My question to you is why did you abandon your original producer apprenticeship/independence model? Was it an ‘impossible outcome’ to achieve as Joe suggests?
Cheers
Scott
I’d also be interested to know if the shared interest foundation (which is separate from the main lending organisation, as I understand it) and cafedirect offer assistance to the producers to build dependence away from the fairtrade markets. I suspect not.
Hi Scott and Joe
Absolutely, our entire model is around empowerment of producer partners and our partners do trade with both Fairtrade and non Fairtrade markets. The producer partners are businessmen in their own right and often run large cooperatives, actually much larger in size than Cafedirect! The emphasis is on ensuring market access and market reach, training to offer skills so that cooperatives are able to trade independently – so not just with Cafedirect or just within Fairtrade markets. Growers are at the heart of our business and with all cooperatives our aim is to increase their knowledge about consumer markets, commodity trading etc to ensure that they are not reliant on Cafedirect, but are able to grow beyond us. Our investment of profits actually allows that to happen, they do not just get a Fairtrade minimum price, but also the ability to improve and strengthen their businesses.
As I mentioned, our PPP model is changing, the outcome of which shifts the power even more to producers for them to manage the reinvestment of profits. Our unique business model is focused on grower empowerment – although we agree that this isn’t the way with all Fairtrade companies and can be a valid criticism of some.
Hope that helps answer your questions!
Jacquie
HI Jacquie,
Thank you for making the time to offer clear and detailed answers to the questions that Joe and I raised about Cafedirect’s producer partnership model!
I cannot speak for Joe, but you certainly answered my questions. I am now even more enthusiastic to understand your PPP approach at a more indepth and detailed level.
I look forward to learning more and hope that you will continue to engage in and enhance our journey of “Other-discovery” of those involved in fair trading partnerships!
Thanks
Scott
Yeah, interesting – thanks.
You mention your programmes to improve the performance of producers’
businesses. I was wondering if you feel from your extensive experiences that
this sort of training and support provides producer groups with sufficient
business and trading expertise for them to compete outside of the protected fair
trade environment?
This is a difficult question to answer. I can say definitively that our
training helps to create sustainable businesses through improved marketing,
management and financial planning skills. Is this enough on its own for these
producers to compete outside the protected fair trade environment? The answer
would be 'no'. But that's because the reason they need prepayments and
price floors in the first place is that the traditional system of modern trade
is rigged against them. Fix the system and they would be able to trade
their way out of poverty without the need for fair trade schemes.
I’d also be interested to know if the shared interest foundation (which
is separate from the main lending organisation, as I understand it) and
cafedirect offer assistance to the producers to build dependence away from the
fairtrade markets. I suspect not.
With access to fair finance and business training, we are doing everything
possible to create sustainable businesses. But, again, if the current
system of modern trade has stacked the cards against them, then we really
haven't solved the root cause of the problem.
I’ve really enjoyed the conversation, thanks!
“Fix the system and they would be able to trade their way out of poverty without the need for fair trade schemes.”
I thought the point was that the odds were so stacked against small producers that they would never be able to compete in mainstream markets, so the fairtrade system was set up to temporarily give a premium for what they are already doing (ie growing cash crops) in order to assist them to progress into other, more sustainable and valuable, markets. Seems to me this latter point is quite important, particularly when there is evidence the fairtrade system is making marginal differences to some farmers.