Posts Tagged ‘Fair Trade’

Should We Encourage People From Countryside To Cities?

Saturday, September 11th, 2010

…Self doubt gets you thinking.  I am still thinking through my concerns about Fairtrade and I wonder whether I’ve got it arse over tip. 

People who live in the countryside are relatively poor compared to people who live in an urban environment, but is that because there are, firstly, too many people in the countryside trying to eke out an incremental profit from cash crops to keep themselves above water, and secondly you actually are richer and better off just by being in a city or town. 

There is a strong argument that workers shifting from rural Amazonia and moving to Manaus (the regional capital of the Amazon region) to carry out industrial activity have taken farmers out of Amazonia and so reduced pressure on deforestation, allowing those remaining in the countryside to farm more efficiently and spread their profits across fewer people, while simply the act of going to a city has improved their personal finances.  So rural-to-urban migration is good for everyone financially and great for the environment! 

There is a strong case (and made by people much cleverer and knowledgeable than me) that people living in the slums of big cities and the favelas of Latin America are one of the most dynamic and happening economies of the world.  These are people getting on with life, generating income and stepping up out of poverty.  These places are not the pits of despair that we all once thought and continue to be taught.  Okay, they’re not perfect but they’re significantly better than rural poverty.  And city dwellers have less children, so women are liberated from their historical rural position as child-bearing machines that must cook, fetch water and bring up children.  City life gives them freedom and the creative energy of the fairer sex is a massive force for good and economic improvement.

So should we be encouraging rural-to-urban migration rather than preserving current rural farming structures.  Urban living is better for the environment as it is more efficient on the world’s resources.  Urban living is better for women.  Urban living reduces overpopulation as people living in towns and cities have less children – overpopulation is effectively a rural problem.  Finally, when people move to the city it reduces the amount of people living in the countryside and so reduces the burden from humanity on the countryside and nature quickly recovers – yes, the rainforest does just simply regrow when people leave it be. 

Lastly, is our nostalgic lova affair with the countryside and rural idyll and farming (I don’t know if it is just an English obsession, and I mean English in this case as I cannot speak for others here) simply wrong and something that just makes us look via rose tinted glasses at all rural farming, believing that this must be a great, wonderful and rewarding life for everyone in the countryside, rather than something most farmers just want to escape from, and be liberated from the back-breaking, never-ending drudgery of subsistence living and would rather become housekeepers, labourers, doctors and accountants or whatever is available in the nearest mega-city.  Who are we in the developed world to deny those in the developing world from wanting to live a better life with loads more consumer stuff to ease their daily grind?  Who are we (the great polluters and destroyers of the world) to deny the rural poor a new start and free women from the potential prison of a rural life?

I suppose what I am saying is that if farmers cannot make a living wage from growing sugar or tea or vanilla or fruits or rice, shouldn’t we encourage more of them to move to cities so then less people grow these crops, so then there is a relative shortage of supply over demand and then prices will go up until farmers can then earn a living wage or more.  Are we not just perpetuating an imbalance of excess supply over actual demand by offering a bit above market prices via Fairtrade?

In stark figures, a rural farming family in Madagascar earns $600 per annum, with Fairtrade vanilla they can earn $2000 per annum, but what could they earn were they to live and work in the capital city of, for example, Madagascar – Antananarivo – and perhaps their family size might also fall*.  So isn’t it better to get them to migrate to the cities where education and public services are better and they will have a lower impact on the environment?

I honestly don’t know the answer, but it remains a dilemma that is constantly fighting itself out between my heart that says “yes to fair trade and ethical food” and my head that says “yes to free trade” and reducing levels of rural farming and shifting population towards the cities.

As in everything in life, the answer I suggest is a fudge – we need to trade ethically to ensure that those farming now are not disadvantaged and abused hence Fairtrade, while at the same time providing incentives for people to move from the villages and rural economy into the nearest cities, and then to ensure that cities become as economically vibrant, socially responsible and environmentally sustainable as possible.  But I will probably never answer this quandary to my own personal satisfaction, so will remain racked by doubts and indecision.

* I asked The Foreign Office and World Bank for help on numbers here, but the former could not help and the latter never deigned to answer or acknowledge my request.  That is a worrying starting position for Madagascar.

Being fair and responsible

Saturday, May 16th, 2009

At Steenbergs Organic, we have been committed to being an ethical business since we started in 2003, becoming Fairtrade for tea in 2004 (both as a trader and as a licensee). It is really important to us that we strike a good balance between our business, the environment and people’s welfare. As well as organic, being fair and responsible are at the heart of everything we do. 

UK‘s first Fairtrade spices

From the beginning, we have worked closely with our suppliers in the developing world to build fair trading relationships based on long term arrangements and fair, stable prices. In parallel to this, we worked with The Fairtrade Foundation in the UK and FLO-Cert GmbH in Germany to develop standards for Fairtrade spices. 

In May 2005, FLO-Cert GmbH approved the standards for Fairtrade spices, as well as draft standards for Fairtrade herbs. At the same, 3 businesses were approved as the original traders for these new Fairtrade spices – Steenbergs was one of them and the only one from the UK. In mid-2005, Steenbergs launched the first Fairtrade-certified spice products with our organic Fairtrade black pepper, as well as the other Fairtrade organic spices. Even after 4 years, Fairtrade spices, and herbs, are still very definitely in their infancy.

Standards are still being developed and the supply chain improved – initially there was only 1 organic & Fairtrade grower for Fairtrade spices, with 4 general Fairtrade spice producers and 5 Fairtrade vanilla co-operatives.  The range of raw materials hasn’t changed, but the number of suppliers, businesses involved and the tonnage available has grown massively.  

Steenbergs is working with some of our other organic spice growers to help them through the Fairtrade certification process. We continue to work with the Fairtrade movement to develop standards for new products – for example, chillis and herbs. Steenbergs’ range of organic Fairtrade spices now includes organic Fairtrade black pepper, organic Fairtrade cloves, organic Fairtrade ginger, organic Fairtrade turmeric, organic Fairtrade white pepper, organic Fairtrade four colour pepper, organic Fairtrade cardamom seed, organic Fairtrade cinnamon, organic Fairtrade mixed spice, organic Fairtrade nutmeg, organic Fairtrade vanilla and organic Fairtrade cinnamon quills.

At the end of 2006, we launched the Europe’s first organic Fairtrade vanilla extract for food producers, with a retail organic Fairtrade vanilla extract launched in mid 2007.  

Is an ethical policy really necessary?

A lot of our products come from the developing world, e.g. India, Madagascar and Sri Lanka. These farmers may be small enterprises, but they still operate in highly competitive commodity markets for their spices and teas. Although international trade is good for the global economy, it can be really tough for these small businesses and their people. There is no comparable welfare state to provide many of the benefits we take for granted. And trading terms are made difficult by the UK’s relative economic strength compared to India, Madagascar and Sri Lanka; as a result, small changes to prices by us in the UK can be magnified for producers.

Pepper In India, pepper is traditionally grown in smallholdings of 5 hectares. Many growers grow pepper intercropped with coconut, coffee and other spices, so annual production is around 1 tonne of black pepper per family. These small producers face fluctuating pepper prices which have been on a downward trend in recent years – black pepper now is worth less than in 1990. This is a result of pricing pressure, coupled with increased exports from countries like Vietnam, which has grown its share of global trade from 0% to 37% since 1990. Low prices have resulted in lack of investment as growers sell their crop below production cost. In 2005, our internal models estimated the cost of sustainable production for black pepper to be £1,645 when the market price was £1,115 per tonne. Constant pricing pressure is destroying these fragile rural economies, reducing environmental standards, health and education in parts of Kerala and elsewhere.

 

Tea The tea market may be characterised by big plantations. However, small-scale planters grow around half of the tea in Nilgiri in Southern India, as well as in Sri Lanka and Kenya and are an important feature everywhere. Tea is also dominated by large global brands – PG Tips, Tetley, Typhoo and Lipton – and the top 3 firms hold 60% of the UK market. Further, 90% of the Western tea trade is in the hands of 7 multinationals. Since the late 1970s, tea prices have hardly changed, falling in real terms. Global oversupply of 7.5% of demand, coupled with changes to trade with Russia and Iraq, has resulted in prices in 2006 of approximately £1.00 per kg compared to £0.95 per kg in 1995 in open auction. Only 15% of the retail price actually goes to the plantation with the rest earned in blending, packing and sales & marketing, most of which is done outside of the producer countries.

In spite of the open market prices, many Indian plantations have to sell their tea at below production cost – so where 1kg of tea costs 95p to produce, the UK consumer often pays 65p to buy the same 1kg. Poor economics causes reduced environmental and social welfare standards and, in some cases, plantations in India are just being abandoned. The Ethical Tea Partnership is a good step towards improving welfare on international tea estates, but the policing of workers’ rights remains unenforceable in many areas nor does it seek to address the economic inbalances. However, Fairtrade has a real, day-to-day positive impact (at a grassroots level) on the lives of tea workers at estates like the Stockholm Tea Estate and tea pickers like Sivapackiam in Sri Lanka.

Can we do anything to help? 

We think that our suppliers should make enough money from growing organic spices and tea to be able to improve their standards of living, as well as those of their workers and their families. It’s about being responsible in the way Steenbergs Organic sources its products. We look for suppliers that are organic and provide

·         A safe & clean working environment

·         A living wage to farmers and a minimum wage to workers

·         Dignified housing (including potable water and access to energy)

·         Basic rights for worker protection

·         Access to medical care for workers & their families

·         Access to primary and secondary education  

Steenbergs Organic enters into long-term relationships with its suppliers, paying them (in advance) a fair price for their organic pepper, organic tea or other organic spices – at prices determined by the grower itself -and wherever possible these are organic Fairtrade black pepper, organic Fairtrade teas and organic Fairtrade spices.

 

 

What’s Fairtrade?

 

Fairtrade is an independent system of standards mainly targeting cash crops. Participating farmers get a fair price for their crops in return for meeting basic social welfare and environmental standards. Over 5 million farmers, workers and their families now benefit from Fairtrade 

When you pay that little bit extra for a Fairtrade product, that premium goes back to farmers and growers. They are guaranteed a stable price and one that is above the cost of production. This price allows farmers to earn a living wage, to plan for the future and to invest in sustainable business development.

For example, the price for organic teas is approximately £1.60 per kg and with the Fairtrade premium is £1.96 per kg. If a farmer doesn’t sell Fairtrade, he will receive the price in the market – currently £1.00 per kg. 

During the last 10 years, the lowest price was 80p per kg. In addition with Fairtrade teas, a proportion goes directly to the community to spend as they see fit. Steenbergs Organic is mainly focused on higher grade gourmet teas, so pays prices significantly higher than these quoted prices, which are mainly for CTC and Fannings, ie tea-bag grade teas.

Isn’t ethical and fair trading bad for competitiveness?

Ethical trading and Fairtrade is not without its critics. Critics believe that guaranteed prices cause global oversupply in commodities and that a focus on small producers will result in a lack of competitiveness. But

·         The ethical trade market is insignificantly small.

·         Fairtrade is 0.7% of the 148,000MT British tea market and 0.1% of the global market.

·         Demand for ethical and Fairtrade products is consumer-led.

·         If consumers don’t want to pay a little bit extra for an ethical product, these products would neither be made nor bought.

·         In Europe, we have basic standards of social welfare, education, workers’ rights and a minimum wage. It is difficult to deny similar benefits to the growers and manufacturers of the products we buy.

 

Give us a good news example?

Greenfield Tea Estate, the source of our Earl Grey and our bagged teas (Peace Tea and Green Tea), is set in the Uva Highlands in Sri Lanka. Greenfield is organic and Fairtrade. It’s part of Lanka Organics, which also supplies Steenbergs Organic with organic spices.

Among its many ethical initiatives, Greenfield provides full union recognition, a cow for each family, drinking water within 10m of each house, a staffed medical centre and on-estate schooling up to 18 years old, with teachers provided by the Ministry of Education. Fairtrade premiums from sales of Fairtrade tea are paid to the Social Committee for the 770 people of the Greenfield Tea Estate, which is responsible for receiving and allocating premium money.

Premium money was used recently for its biggest project so far: the re-development of the Estate Social Club. The Estate Social Club is a meeting hall that’s used for social events, special interest classes, mother and baby groups, children’s clubs, union meetings and other group events. The Fairtrade premium has, also, been invested in lock-up steel lockers, which is the first time families have had moth-proof and damp-proof places for clothes and valuables.

Crime has been almost non-existent on the Estate but there had been a few break-ins in the local village recently which had raised some concern among the workforce. During the day, the whole family is often out of the house and people didn’t like the thought of having to lock their homes and keep hold of keys (what if someone comes home early and someone else has the key etc?).

TVs and aerials have also been purchased at the houses of some of the community leaders as residents wanted access to news and Tamil TV broadcasts. The quality of housing on the Greenfield Estate is already higher than neighbouring estates but recently money has gone to help with interior decoration. This is on-going.

Many of these things may appear small but at Greenfield these developments are a source of pride, wonder and excitement. When the co-operative initially took over the estate it was in poor condition, the houses hadn’t been looked after in 20 years and people who lived on the estate had their legal entitlement to three days work per week on US$1 a day. Drug and alcohol dependency were rife. These problems have now mostly disappeared and the younger generations are involved in taking responsibility for their own community.

There’s still a long way to go but so far the leaps and bounds they’ve taken in 10 years has made a real difference.