Oxfam, 2002, p. 21. Photo of grocery store coffee display by Ted Goodfleisch
Presentation for pompy
Why is International Trade UNFAIR? <ul><li>For many years, rich countries and institutions have pushed the governments of poorer parts of the world like India, Africa and South America to produce goods for people living in the “developed” countries. </li></ul><ul><li>Places like USA, Canada and Europe have benefitted from the low wages and poor working conditions that exist in the producing countries. This system also enables corporations, supermarkets, transport companies and advertisers to make BIG profits. </li></ul><ul><li>The large corporations have the money and power they need to influence government policies and practices. In this way, many senior level politicians and policy-makers end up paying less attention to the needs of their own people and more to the needs of the large corporations. </li></ul>
<ul><li>Today, the world’s economy is controlled by 3 large institutions: </li></ul><ul><li>- the World Trade Organization, </li></ul><ul><li>- the World Bank, and </li></ul><ul><li>- the International Monetary Fund. </li></ul>The policies guiding these institutions were written with input mainly from multinational corporations. There has been almost no input from citizens.
<ul><li>The international market for agricultural products is dominated by a few enormous corporations who have massive power and control over market prices. </li></ul><ul><li>DOW CHEMICAL </li></ul>MONSANTO
The control of these corporations affects millions of people – from small farmers to individual consumers. Today, people have fewer choices and it is more difficult for farmers and workers to earn good wages .
<ul><li>Over-supply and production of export products including coffee, tea, bananas and sugar has driven down the price large corporations pay for these goods. </li></ul>In the past 10 years, the price paid by consumers in grocery stores and coffee shops hasn’t changed very much. Most of the financial benefit has gone to the “middle-men” – and hasn’t been shared with producers.
The farmer only receives about 5% of the retail price of a package of coffee sold in a U.S. supermarket. For instance, small coffee farmers receive 1% or less of the price of a cup of coffee sold in a coffee bar. 1% 5%
People in US, Canada, Europe, Australia and other “developed countries” are beginning to understand the situation facing small growers. Some people want to help producers receive a better price for their crop, and don’t want multinationals to have so much power and control.
They are part of a new kind of trading system called FAIR TRADE. This system gives consumers an opportunity to pay a fairer price to producers by paying a slightly higher price for the product.
FAIR TRADE is a different way of doing business which tries to provide: <ul><li>Fair prices for farmers </li></ul><ul><li>Fair wages for workers </li></ul><ul><li>Safe working conditions </li></ul><ul><li>Direct access to market </li></ul><ul><li>Community development </li></ul><ul><li>Democratic decision-making </li></ul><ul><li>Sustainable farming practices </li></ul><ul><li>Environmental protection </li></ul>
Here are some ways Fair Trade can help Fair trade pays farmers enough money to provide good food and living conditions for their families, and to send their children to school.
<ul><li>Fair Trade tries to reduce the number of “middlemen” between producers and consumer so growers and workers will receive more money. </li></ul>
As well as getting a fair price for their products, growers receive an additional sum of money called a Fair Trade Premium. A democratically-elected committee is formed to decide the best way to use these funds. The grower or landowner may participate, but the decision is made collectively by workers and growers .
Fair Trade also looks for ways to support the development of local and domestic industries.
Fair Trade believes workers should have access to clean water, sanitation and healthcare.
Through Fair Trade , people will receive fair wages and respect for the work they do.
Preparation and planning for upcoming visit of Level Ground to Assam thisi Laurie and a friend of hers will be arriving on March 18 at Guwahati. We hope she will stay long enough to visit the Bodo growers, then Gobin and also maybe the Singpho area and Simo. And, of course, she will visit Adarsh Seuj Prakalpa and meet our staff there.
<ul><li>Level Ground knows farmers work very hard. They understand farmers always face some risk by raising and selling crops. </li></ul><ul><li>To have a good working relationship with their growers, they try to </li></ul><ul><li>travel to the area where the growers live and visit with them </li></ul><ul><li>establish direct relationships based on trust and respect, </li></ul><ul><li>create economic opportunities for small-scale producers, </li></ul><ul><li>pay a fair price and invest fair trade premiums in the farmer's community, </li></ul><ul><li>support sustainable environmental practices, and </li></ul><ul><li>promote independence, education and positive work conditions. </li></ul>
<ul><li>Level Ground is already working with members of farmers’ cooperatives n a number of different countries. The growers of Assam are the first tea growers Level Ground is buying tea from. </li></ul><ul><li>Their company purchases organic coffee, dried fruit and sugar from other growers. </li></ul><ul><li>Because there are no fair trade and organic tea cooperatives in Assam, Level Ground wants to work directly with small-scale tea growers, preferably growers who are employing members of their family and maybe some hired labourers. </li></ul><ul><li>We had hoped that they would accept tea from Gossainbarie, due to the interest Binod Saharia had in turning that garden into a fair trade project, but that garden is too large to meet their standards. Also, in their eyes, Binod is a successful business man and doesn’t require their help. </li></ul><ul><li>Level Ground is not so interested in having their products certified FAIR TRADE by a large company. That’s because certification is complicated and costly. If they paid for certification, less money would be available to the grower or cooperative </li></ul><ul><li>Instead of relying on a certification company, they have to have assurance from a trusted 3rd party (like small tea cooperative) that the tea is grown without use of chemicals AND that the family and workers are benefitting from the fair trade premiums Level Ground contributes. </li></ul>Level Ground buys coffee from these growers in South America
<ul><li>They purchase coffee from 3,000 farming families who have formed a cooperative in southern Africa. The growers wash and sun-dry the coffee beans, and prepare the beans for shipment to Canada. </li></ul><ul><li>During Level Ground’s last visit, they agreed to purchase 96,000 Kg of coffee from this cooperative. This means their kids can go to school, houses can be fixed and a goat, cow or chickens can be added to the family farm. Other benefits of their Direct Trade Relationship with this cooperative. </li></ul><ul><ul><li>Members have been able to develop a better facility, and have developed new business skills. They now have computers in the office and an improved washing and sorting facility for processing coffee beans. </li></ul></ul><ul><ul><li>The road to their village has a new bridge. </li></ul></ul><ul><ul><li>Water is abundant even during the dry season due to provision of wells . </li></ul></ul>One Example of How Level Ground’s Direct Trade Relationship Benefits Workers
Another important part of FAIR TRADE and DIRECT TRADE relationships is that for each kg. the company purchases, they provide a fair trade “premium.” This money can be used to improve working conditions or for some other project or activity which directly benefits the workers. Decisions about the best way to use these premiums have to be made by a committee of the workers – not by the owner of the land or the manager. The manager can sit on the committee, but the committee members make the decisions after they consult fully with all the workers.
The farmers group in Ambikapur is a good example of a cooperative. They work together to make decisions about what is needed so not just one family benefits from the support provided by Fertile Ground. For now, Kel and I (with Pompy’s help) will work with the tea growers and their workers to help them organize this type of group. Together we can discuss how the group should be set up, explain the kinds of things the funds could be used for, and come up with a decision-making process that Level Ground would support.
Level Ground wants their customers and buyers in Canada to be confident that the business they operate is really based on principles of FAIR TRADE. Being open and honest with everyone is a way for them to be accountable. <ul><li>Here are some things they do to operate with transparency: </li></ul><ul><li>Level Ground staff members meet face-to-face with producers, co-operatives, and exporters to ensure the price of each product is distributed as fairly as possible, </li></ul><ul><li>They share the names of trading partners, and our entire purchase and payment history (in fact, you can read all that information on their website) </li></ul><ul><li>They provide opportunities for producers and consumers to offer feedback. </li></ul>A coffee worker with Hugo, one of the owners of Level Ground
<ul><li>Level Ground has set some standards for how the funds should be spent, which we will explain to you in more detail later. </li></ul><ul><li>In future, Kel and I think that one thing Level Ground would like is to find a reliable supplier of organic black orthodox tea from a cooperative or group of growers who have the capacity to process 1,000 kg./year – maybe more. </li></ul><ul><li>In the meantime, they are happy to purchase good quality teas through connections we have developed with what they call “micro-producers”. These are individual growers like Gobin who can only provide a few hundred kg. of tea. They would like to help Gobin increase his production so he can provide more tea – perhaps up to 500 kg./year. </li></ul><ul><li>Our challenge is to find two or three growers like Gobin who could provide different types of tea to Level Ground. </li></ul>