AAA meets fair trade
We love fair trade! but what do the
producers say?
Econ. Piero Ponce-Falcon
Vienna, September 2nd
201...
About me
● Peruvian, Degree in Economics, University of Lima
● Master in “Business Process Management”, University
of Appl...
Agenda
1. Fair Trade for customers
What does fair trade mean?
Fair trade feels good
2. Fair trade for producers
Sources of...
1. Fair Trade for consumers
Fair trade is an alternative approach to conventional
trade*
“Producers receive a better deal ...
1. Fair Trade for consumers
Five principles of fair trade
● Market access for marginalised producers
● Sustainable and equ...
1. Fair Trade for consumers
Fair trade feels good!
Fair trade leads to fair consume
Products are tasty and healthy
We prev...
● 1.24 mio farmers and workers participating in fair trade
by 2011
● 10% growth of producers for the period 2010-2011 (991...
2. Fair trade for producers
Sources of information
● Testimony: CEPICAFE (Peru)
● CEval study, 2012
http://www.fairtrade.
...
2. Fair trade for producers
Cooperative CEPICAFE (2013)
● Location: North of Peru
● About 6,000 members (farmers)
● Second...
2. Fair trade for producers
Status quo of farmers prior to certification
● Low management skills
● Bad reputation of coope...
2. Fair trade for producers
Motivation for going fair trade
● New markets, better prices, pre-financing conditions
● Techn...
3. Impact and challenges
during implementation
Social structure of communities
● Access to on site trainings and education...
3. Impact and challenges
during implementation
Socio-Economic situation
● Higher and more stable incomes,
credits availabl...
3. Impact and challenges
during implementation
Organization of rural zones
● Local governmental initiatives for promoting ...
3. Impact and challenges
during implementation
Local and national development
● Attractivity from local NGOs for joint wor...
4. Conclusions and
recommendations
● Social and environmental issues to be trained
among farmers
● Work at grass-root rath...
4. Conclusions and
recommendations
● Promote governmental projects by
transferring them fair trade know-
how
● Generate tr...
Questions and answers
Contact:
Piero Ponce-Falcon
www.pieroponce.com
Master Thesis on the topic of “Application of process...
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AAA Event Serie: Fair Trade from the producers' perspective

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"Wie love Fair Trade! But what do the producers say?"

The challenges the producers are facing to qualify for fair trade certification in developing countries

The goal of this presentation is to raise awareness about the different economical and social challenges of fair trade certification in developing countries. As an example, we look at the situation of a Peruvian agricultural cooperative before and after the certification, as well as other insights taken from my previous work in rural areas.

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AAA Event Serie: Fair Trade from the producers' perspective

  1. 1. AAA meets fair trade We love fair trade! but what do the producers say? Econ. Piero Ponce-Falcon Vienna, September 2nd 2013 AIESEC ALUMNI AUSTRIA
  2. 2. About me ● Peruvian, Degree in Economics, University of Lima ● Master in “Business Process Management”, University of Applied Sciences Vorarlberg ● AIESEC Experience in Peru, Germany, Cameroon and Egypt ● Experience in project management and business development in rural areas ● Family agribusiness for tropical fruits (production and sales) since 20 years ● Interest in management of sustainable agribusinesses 2
  3. 3. Agenda 1. Fair Trade for customers What does fair trade mean? Fair trade feels good 2. Fair trade for producers Sources of information About CEPICAFE Status quo prior to certification 3. Impact and challenges during implementation 4. Conclusions and recommendations 3
  4. 4. 1. Fair Trade for consumers Fair trade is an alternative approach to conventional trade* “Producers receive a better deal for improving their lives” “Consumers help reduce poverty through their everyday shopping” * Source: Fair Trade Labelling Organizations International e.V., 2013 4
  5. 5. 1. Fair Trade for consumers Five principles of fair trade ● Market access for marginalised producers ● Sustainable and equitable trading relationships ● Capacity building & empowerment ● Consumer awareness raising & advocacy ● Fair trade is a “social contract” Additional dimensions: working conditions (equality, children’s rights), environmental sustainability (organic is encouraged), monitoring and evaluation (participatory processes) 5
  6. 6. 1. Fair Trade for consumers Fair trade feels good! Fair trade leads to fair consume Products are tasty and healthy We prevent child labor We help farmers eradicate poverty in developing countries 6
  7. 7. ● 1.24 mio farmers and workers participating in fair trade by 2011 ● 10% growth of producers for the period 2010-2011 (991 organizations) ● 30% growth on revenues for the period 2010-2011 (EUR mio 673) ● 54% of fair trade producers hold an organic certification Sources: Verbraucher.org, 2004-2006 Fairtrade Labelling Organizations International, e.V., 2011-2012 1. Fair Trade for consumers 7
  8. 8. 2. Fair trade for producers Sources of information ● Testimony: CEPICAFE (Peru) ● CEval study, 2012 http://www.fairtrade. net/fileadmin/user_upload/content/2009/resources/Final_R eport_Fairtrade_Impact_Study.pdf ● Personal experience in developmental projects in rural areas 8
  9. 9. 2. Fair trade for producers Cooperative CEPICAFE (2013) ● Location: North of Peru ● About 6,000 members (farmers) ● Second level organization (grass-roots) ● Fair trade certification for coffee and cocoa ● 90% of cocoa is organic (Biolatina certification) 9
  10. 10. 2. Fair trade for producers Status quo of farmers prior to certification ● Low management skills ● Bad reputation of cooperatives in Peru ● Weak trustiness among members ● Average size per family farm: 1 hectare ● Children actively support parents on the field ● Low awareness of the fair trade approach 10
  11. 11. 2. Fair trade for producers Motivation for going fair trade ● New markets, better prices, pre-financing conditions ● Technical assistance from CEPICAFE ● Implementation of social services and loans ● Social and environmental principles are more difficult to transmit in the short term Fair Trade becomes a business opportunity for them at first place 11
  12. 12. 3. Impact and challenges during implementation Social structure of communities ● Access to on site trainings and education ● Food security at schools, technical assistance to teachers on school gardens ● Long distances to school & health services ● Gender: generational transformation ● Other issues (rainforest’s experience): parents afraid of girls going to school without control (pregnancy), mostly women communicate constantly with educators (men stay on farm fields), school system matches with crop season 12
  13. 13. 3. Impact and challenges during implementation Socio-Economic situation ● Higher and more stable incomes, credits available ● Inefficient top-down communication ● High levels of illiteracy: difficulties for traceability, building capacity and general administration ● Other issues (rainforest’s experience): democratic processes (better communication and education for adults) are expensive 13 Source: CEPICAFE, 2013
  14. 14. 3. Impact and challenges during implementation Organization of rural zones ● Local governmental initiatives for promoting agriculture through projects and technical assistance ● Fair trade makes farmers be less dependable on assistentialism (short-view social programs) ● Other issues (rainforest’s experience): volunteering is possible for advocacy and capacity building (professional adults & youth), low infrastructure for applying radio and TV messages, almost no internet ● Risk of long term implementation of the “help” approach 14
  15. 15. 3. Impact and challenges during implementation Local and national development ● Attractivity from local NGOs for joint works ● Youth do not see themselves as farmers, they prefer going to the cities for work & study ● Organic production is expensive but possible (complementary certifications) ● New competition among the fair trade industry: small producer organizations (cooperatives) vs hired labour (international companies) 15
  16. 16. 4. Conclusions and recommendations ● Social and environmental issues to be trained among farmers ● Work at grass-root rather than individual level ● Re-adapt school system to agricultural crop time ● Potential for more organic participation ● Higher demand for technicians and consultants in rural areas 16
  17. 17. 4. Conclusions and recommendations ● Promote governmental projects by transferring them fair trade know- how ● Generate trust among local authorities, parents, teachers and press ● Recruit volunteers and promote entrepreneurship, particularly among youth ● More advocacy and political influence ● Current debate: big vs small farming 17 Source: CEPICAFE, 2013
  18. 18. Questions and answers Contact: Piero Ponce-Falcon www.pieroponce.com Master Thesis on the topic of “Application of process management for sustainable agribusinesses“
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