Today, we bring you on another Equal Exchange visit; this time to Peru’s “White House”, or the Presidential Palace as it is called in Peru.

Well, we didn’t actually make the trip ourselves; rather, our chocolate bars did.

How did this happen?  Santiago Paz, Co-President of Cepicafe, and good friend to many of us here at Equal Exchange, was invited by Peru’s Vice President, Marisol Espinoza, to lunch at the Presidential Palace.

The background:  Cepicafe, a small farmer coffee co-operative located in Piura, Peru is one of Equal Exchange’s long-term partners.  Along with the members of other Fair Trade co-operatives in northern Peru, Cepicafe helped launch Marisol Espinoza’s political career.  A prominent journalist, with roots in the mountains of Piura, she often wrote about the challenges facing small farmers, learning much from her relationships with the co-ops.  Eventually, she was encouraged by the farmers to run for Congressional office.  To the surprise and delight of many, Marisol ran on an anti-mining and pro-small farmer platform – and won!  Her election illustrates one of the most important achievements of Fair Trade – the ability to influence regional politics.

In 2005, Ollanta Humala ran for President and invited Marisol to join his ticket.  She consulted with Cepicafe and other co-ops in the region and with their support, accepted his invitation.

Celebration in Piura after the 2006 Presidential elections.

Today, Marisol is Vice President and continues to use her position to support progressive economic and social policies affecting rural communities throughout Peru.

And so, last week when Santiago was invited to dine at the Presidential Palace, what did he decide to bring Marisol as a gift of appreciation?

Why, Equal Exchange chocolate bars of course!

Jessie Myszka of Equal Exchange and Melissa Hoover, Executive Director of the U.S. Federation of Worker Cooperatives, at the White House meeting on cooperatives

In 2003, while meeting with coffee producers on an Equal Exchange visit to Guatemala, our farmer co-op hosts were proud to show us the power lines that snaked up the mountainside. Electricity had arrived just three months before our visit. I couldn’t help but wonder how life would change in Pueblo Nuevo; what unintended consequences would occur as a result?

This past Friday, I heard another side of the electrification story, this time recounted by staff of utility companies from the American midwest. Rural electrification in the 1930s took place through the formation of co-operatives because private companies believed the provision of electricity was not a profitable goal: electricity co-ops proved them wrong. During that time, 44 percent of the U.S. population was rural. Today, that percent has dropped to 16 percent. Still imagine: what would it be like if the power lines had never come?

Last Friday, I sat in a small auditorium on the White House campus with 150 cooperators from dozens of industries. White House staff and the National Cooperative Business Association (NCBA) had invited us to educate the administration, Department of Agriculture (USDA), and Small Business Administration (SBA) about what we co-operatives have done and what the federal government could do to help – or to get out of the way.

Now history repeats itself. Last week, the USDA announced a new loan program to extend broadband to rural communities. Access is important not only for schools and medical facilities, but also contributes to an infrastructure that supports both businesses and employment opportunities – thereby allowing communities to stay rural and sustainable. Customer call centers can be “insourced” to the countryside rather than exported abroad. This was just one example of the NCBA’s key message to the White House, USDA, and SBA: not only do co-operatives do better at sustaining the economy, but we co-operatives can offer solutions to the problems of the Great Recession. For example:

• Nationally, mortgages provided through credit unions have much lower foreclosure rates.[1]

• Of the hundreds of organizations who borrowed money from the Cooperative Fund of New England (CFNE) since 1975, 75% are still in business.[2]

• CFNE also boasts a loan repayment rate exceeding 99% – much higher than conventional loan repayments[3].
• Worker co-operatives contribute to individuals’ assets and are much more likely to redistribute hours than lay workers off during the recession.

• In a recent survey by the Consumer Federation of America, people rated consumer co-operatives more highly than for-profit businesses on quality and service. For example, 74% of respondents agreed that co-operatives “have the best interests of customer in mind,” compared to only 52% of for-profit businesses.[4]

The speakers – from the USDA, National Economic Council, Domestic Policy Council, to the Chief of Staff Jack Lew – often began their own presentations with an anecdote about how after reading the co-ops’ profiles prepared by NCBA, they discovered that they had several personal connections to the co-operatives. Like lamp posts turning on one by one on a dark road, the prevalence of co-operatives and the benefits provided was illuminated:  no single light could be sufficient on its own.

[1] http://www.cutimes.com/2009/09/02/cus-foreclosing-on-fewer-homes-than-banks-and-not-as-quickly “In general, credit unions appear to be foreclosing on a smaller percentage of their mortgage loans than other financial institutions and are usually taking longer to do it, according to credit union executives and NCUA data.”

[2] NCBA case study for this White House briefing.

[3] The rate for SBA loans in 2009 was 12%, but this is not a fair comparison as it is a single year. The rate was 2.4% in 2004 and 8.4% in 2007. http://money.cnn.com/2009/02/25/smallbusiness/smallbiz_loan_defaults_soar.smb/

[4] NCBA news release, May 2, 2012.

Action Alert: Tell Starbucks and Green Mountain to Support Small Fair Trade Farmers!

Fair Trade USA  (formerly TransFair USA) and its new initiative, Fair Trade For All,  aims to expand fair trade certification to include coffee plantations.  “Fair Trade for All” has been a major point of contention in Fair Trade USA’s split from Fairtrade International (FLO).  For more on the Fair Trade USA/FLO split, see Fair World Project’s (FWP) statement. Putting aside the secretive and unilateral nature of the initiative, certifying coffee plantations has a number of critical problems.

Small producers and democratic cooperatives are core to the founding principles of the fair trade movement and market.  By definition, small producers are vulnerable, excluded and under resourced in the global market. In the coffee sector, small farmers produce approximately 70% of the global coffee supply. Despite the current high prices in the coffee market, many fair trade coops are still unable to sell the majority of their coffee under fair trade terms. Expanding fair trade certification and market access to large-scale plantations will assure that fair trade cooperatives continue to remain vulnerable to volatile international markets and undermine 25 years of fair trade development. Importantly, consumers will be unable to distinguish between small farmer and cooperative coffee from plantation coffee. Fair Trade activists have sent thousands of letters to FTUSA, Fairtrade Internaional and IMO in support of small farmers. Learn more about fair trade and plantations by reading “Fair World Project Statement Regarding Coffee Plantations and Hired Labor.”

Take action and tell Starbucks CEO Howard Schultz and Green Mountain CEO Larry Blanford to Support Small Fair Trade Farmers!

Before I came to Equal Exchange, I spent most of my working life in the produce departments of consumer cooperatives.  I hefted 50-pound cases of potatoes and cabbages, cleaned delicate bunches of cilantro and spinach, and built mountains of broccoli and apples that customers quickly reduced to foothills.  Seward Co-op, where I spent eight years, was a particularly good place to work, with a membership (including me) that highly valued a sustainable local economy.  Our member-owners wanted to know who grew their food, not just be assured that it was organic.

Local farmers brought their produce to our back door, and stayed to chat about the weather, the progress of the season, their CSA or farmers’ market successes and failures, the challenges of transportation and distribution, and so on.  Some of them aired age-old feuds, but most of them respected each other, and certainly most of them knew each other.  Organic farmers have had to do their own crop research, develop their own cost analyses, figure out their own marketing strategies – it stands to reason that they share skills and knowledge, and have thereby built a community.

Seward Co-op sent me several times to the Organic Farming Conference in La Crosse, WI, sponsored by MOSES (Midwest Organic & Sustainable Education Service.  There I had the privilege of watching farmers not only teach and learn from each other, but get down on the dance floor.  Oh, and this conference is the only one I’ve ever been to that had good food – it’s all organic, donated by and bought from mainly local producers and distributors.

When I started at Equal Exchange, I learned that most tea, including fair trade tea, comes from plantations.  And plantations (or estates, as they’re often called) are not simply “big farms.”  Tea plantations in India often include bonded labor – families working the same jobs for generations, with no ownership or control over their work, dependent on the benevolence of wealthy owners or transnational corporations.

Remembering the bountiful snack and hot-beverage tables at MOSES, I decided I wanted our tea, perhaps the only small-farmer tea on the US market, to be on those tables.  I wanted the farmers I knew and admired to be able to delight their tastebuds or feed their addictions (whichever it is) with a product grown and harvested by people like them – small businesspeople who own their little piece of the world, make their living from it, and feed the rest of us.

It was the last weekend of February and Equal Exchange co-owner Luke Fowler and I were fired up about the progress of our campaign for authentic fair trade.   We wanted to make the connection between family farmers here and family farmers in the rest of the world.

And we did.  And it was awesome!  At other events (not farmer-focused ones), it’s been difficult at times to convey the authentic fair trade message.  I think many people who want to make ethical choices in their lives, but don’t have time to research, don’t even realize that fair trade is for and by land-owning small farmers organized into democratically controlled cooperatives.  Well-meaning consumers assume that fair trade costs more because it means higher “wages” paid to workers, as opposed to better “prices” paid for farmers’ crops.

This assumption makes perfect sense if you think about the way most people work in the US.  We have jobs, or else are trying to find jobs.  We rent our bodies, minds, and time to our employers.  Our lack of any ownership stake in our jobs tends to make us forget that some people do own their jobs, and not only their jobs but the land on which their livelihoods depend.

The farmers we talked to at the conference seemed to understand right away the difference between small farmer cooperatives in fair trade and large-scale plantations.  Many responded with parallels they saw in the organic movement – especially how large-scale corporate agriculture has sought to weaken organic standards time after time.

Years ago, Riverbend Farm owner Greg Reynolds told me that for the previous couple years, he’d earned a wage effectively lower than his employees (whom he tries to pay as livable a wage as he can afford).  But, he emphasized, unlike his employees, he owns the farm.

Ownership matters.  Farmers know this.  Worker-owners know this.  Food co-op members know this – they often put it on their bumper stickers.

And I think it’s safe to say that people like Greg don’t just own their farms – they own the organic movement.  Companies like Monsanto, which have actively prosecuted farmers for common agricultural practices like saving seed, have no right to say or even influence what’s organic and what isn’t.  Which is why I think we ought to be listening to small farmer cooperatives and their representatives when they say that plantations can’t be part of fair trade.

If you support your local organic farmer, why would you buy plantation coffee?

“Fair Trade, in Fair Trade USA’s scheme, doesn’t mean anything. In order to increase the market share, they have allowed large and small players in the system; organized producers and those who are not organized; good products and bad products.  What is the message that this is going to send to consumers?  In wanting to make everything Fair Trade, we are left with no message. Fair Trade means nothing.”  Santiago Paz

Santiago Paz, CEPICAFE coffee co-operative, Fair Trade Futures Conference, Sept. 2011

When TransFair/Fair Trade USA chose to disregard the wishes of Fair Trade producers, Alternative Trade Organizations, activists, and other long-time actors in the Fair Trade movement and leave the international system to create their own “Fair Trade” certification system which includes plantation coffee and cacao, justifiably they angered many Fair Traders.

On the surface, it’s hard to argue with an initiative entitled, Fair Trade For All. I mean who doesn’t want producer empowerment for all farmers everywhere? The trouble is that once you go beyond the catchy name, you quickly bump into two stark realities. 1) Despite their claim that this initiative will benefit farm workers and small producers, Fair Trade is a model which works for those who own and run their businesses.  In the case of small farmers, fair trade builds support for co-operatives and other associations.  If you add plantations into the Fair Trade system, the benefits of the model will go to plantation owners, not the farm workers who toil in the fields and groves.  So it is important to compare small farmer co-operatives (where the farmers collectively own and run their business) with plantation owners (where one person, or a corporation) owns the business.

Historically, Fair Trade was created in recognition of the fact that plantation owners already receive tremendous support from government subsidies, agriculture policies, international trade agreements, bank credits, and programs which provide technical assistance and field trainings.  Small farmer organizations, on the other hand, are at a complete market disadvantage in almost every respect.  They have never been able to compete in the same market because the playing field has never been level.

2) With their new initiative, Fair Trade for All, TransFair/Fair Trade USA has proclaimed that plantations and small farmer co-operatives can co-exist happily, peacefully, and productively in the same system.  What’s all the fuss about?  It sounds nice, and if it were so, there would absolutely be no protest.  The tragedy is that it has taken 25 years of blood, sweat, risk-taking, mistakes, and losses to build a healthy supply chain for small farmer co-ops.  Finally we can say that small farmers have a voice and a seat at the table, have some degree of economic and political power none of which came magically or overnight.  But, our work is not finished; there is still so much more to be done.  Give a plantation owner additional benefits, beyond those already afforded, and you will wipe out the advances small farmers (and other Fair Traders) have worked so hard to achieve.

TransFair/Fair Trade USA walking away with the fruits of 25 years of the movement's collective labor.

Finally, a philosophical question:  If Fair Trade was created to balance an unfair playing field for small farmer organizations, and Fair Traders (producers, traders, and activists) who built the system and named it Fair Trade have always been strongly against plantations in coffee and cacao, what do you think about an organization that steals the name Fair Trade, walks away from the international Fair Trade system, and creates a new certification system in which coffee and cacao plantations will sit side by side with small farmer organizations?  Is that not theft?

In the coming months we will ask our producer partners to weigh in on these questions.  Today we start with Santiago Paz, Co-Manager of Cepicafe (the Piuran Coffee Growers Association) in Piura, Peru.  We asked him why he believed that plantations should not be included in the Fair Trade system and what he thought the impact would be on small farmer co-operatives now that TransFair/Fair Trade USA has allowed plantations into their certification scheme.  Here’s what he has to say:

“Since the 1990s, Fair Trade has supported the reactivation of co-operatives and small producer organizations. Fair Trade gives us an advantage.  It allows us to become more competitive: coffee sales have grown; our product supply has diversified; we have broadened the market; and our sources of financing have increased.

Fair Trade has been made up of small, organized producers. The first phase of Fair Trade was marked by solidarity and the social commitment of the consumers: “These are small, organized producers that should be supported.” Quality defined the second phase: the organizations became more professional and their supply was characterized by superior quality. Fair Trade was economically viable, socially responsible and environmentally sustainable.

There are many examples in Peru: Cepicafe, Cocla, La Florida, Ceovasa, etc., all of which became political actors that continue to play an important role in the economy. Fair Trade has allowed us to become visible and it has given us the ability to influence political decisions at different levels of political power, guiding the role of international co-operation.

Fair Trade is about balancing unequal competition. The decision of Fair Trade USA to include plantations in the system is a serious threat to small farmer organizations. The small producers cannot compete with the plantations and large companies that have taken control of the market and of the decisions being made by Fair Trade USA.

Fair Trade, in Fair Trade USA’s scheme, doesn’t mean anything. In order to increase the market share there are large and small players in the system; organized producers and those who are not organized; good products and bad products.

What is the message that we are going to send to consumers? How are they going to identify us? In wanting to make everything Fair Trade, we are left with no message. Fair Trade means nothing.

… What is clear and seems to be difficult to understand in the North is that a producer organization can never compete with a large plantation. A co-operative is much more than a company that buys and sells coffee; it is a mechanism for development, practicing a solidarity economy by which the producers also hope to resolve their problems, such as a lack of highways and the need for healthcare centers and schools.

From my point of view, Fair Trade cannot stop generating development, this must be emphasized. This was Fair Trade’s originating ideal and it should not be abandoned. Fair Trade is help for self-help: it helps to strengthen your organization so that you can use this to resolve your problems.

Fair Trade USA has taken the wrong path—rather than continuing to fight so that Fair Trade can be more alternative trade, it is moving very close to traditional trade; it is playing by the same market rules which it aimed to change and is endorsing these same practices.

In our opinion, Fair Trade USA is leading us to the destruction of Fair Trade. In the short term, we are experiencing the consolidation of Fair Trade to that which is big. On one side the big importers and on the other side, big producers and exporters. This won’t last for very long and in the end the consumer will discover that s/he is supporting something that is different than what is being promoted.”

So, what do you think? Are we going to allow TransFair/Fair Trade USA to make away with all we have collectively built and set small farmers back 25 years?

Click here to add your name to the growing list of people who support Authentic Small Farmer Fair Trade.

Cartoon courtesy of John Klossner. Copywrite 2012.

This March, as part of Equal Exchange banana Month, we are featuring news from our farmer partners, producer profiles, and articles written by those retail partners who had the opportunity to accompany us on our visit to Peru. The following excerpt is from a wonderful article written by Travis Lusk, Seward Co-op Produce Manager which appeared in the December January issue of The Sprout.

Equal Exchange bananas epitomize Principle Six (P6). They’re from farmer-run cooperatives — small-scale banana farmers in southwest Ecuador and northwest Peru — and are sold to cooperative grocery stores in North America. Equal Exchange bananas are also a premium product of outstanding quality and reliability. Seward Co-op’s partnership with Equal Exchange highlights two cooperatives working together to improve the quality of life for consumers and producers.

Bananas are the highest-volume product sold at Seward Co-op and at most grocery stores across the country. Despite this popularity, many consumers are unaware of the back-story of the tropical fruit. In October 2011, I had the pleasure of visiting Peru, along with other cooperators from Equal Exchange, and learned much about how indigenous communities organize to grow and export bananas.

Read more here (go to pages 9 – 10).

To learn more about Seward Co-op’s philosophy on bananas, read here.