Question and Answer with Paul Rice, President and CEO of Fair Trade USA: Part I: Cooperatives and Estates

Written by on May 4, 2012 in Green - No comments

If fair trade continues to stand on the model of excluding the poorest of poor, excluding the majority of people in product categories in industry- it’s really on moral thin ice.
Fair trade has to be more inclusive.”

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Your wait is over! It’s finally here. The post I know you’ve all been dying to read: President and CEO of Fair Trade USA, Paul Rice, shares the reasoning behind Fair Trade USA’s decision to leave Fairtrade International and their plans for “innovation.”  So sip on a cup of freshly brewed, fair trade coffee, grab a bar of chocolate (fairly traded of course!) and prop up your feet because this interview is rich and juicy.

Question and Answer with Paul Rice, President and CEO of Fair Trade USA:
Part I: Cooperatives and Estates

Question: ”What was the biggest motivation in your decision to leave
Fair Trade International?”

Paul: ”Leaving FLO… (Laughing)…How much time you got?
Fair trade desperately needs innovation in order to expand impact. The historic fair trade model is not scalable in our view and we are not content just serving a few million farmers a year while billions of people around the world struggle with poverty. And it’s our belief that fair trade can be a relevant model for poverty alleviation on a grand and global scale. Out of that belief and analysis, that fair trade could make a bigger impact if it were simply innovated, we proposed an innovation agenda that FLO was not willing to support. It wasn’t our first choice to leave FLO. It was our first choice to innovate, but when FLO decided they wouldn’t come with us in that journey, separation from FLO became inevitable.”

Question: ”Why the push for plantation certification? Why not focus on certifying more cooperatives?”

Paul: ”I’ve been organizing cooperatives since 1983. I can tell you for a fact that this polarized, 2- dimensional framing [of fair trade]–the small farmer in the co-op vs. the small farmer working on the estate– is not the reality on the ground. We are talking about the same family. It’s the same family.”

“There’s an inevitable math at hand here. Most small farmers have 2 or 3 acres of land. If you have 2 acres of land and 4 kids, there’s no way you can leave a land inheritance to all of them. Maybe 1 or 2…”

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The story of Santiago and Armando:
“My buddy Santiago Rivera is a classic, coffee farmer, a 4th generation farmer, owns 3 acres of land and lives on a mountain top in Nicaragua. He studied until the 2nd grade. He struggled to put food on the table his whole life.  He joined a fair trade co-op in the ’90s and started to make a little more money each year. His oldest son, Mercedes, who works on the farm will inherit the land.  His oldest daughter, Rosario, married and moved away to her husband’s farm. Santiago’s youngest daughter, Yolanda- and this is a classic fair trade, success story–was pulled out of school at 6th grade because the family couldn’t afford it.  But shortly after her family became fair trade certified. The village set up a fair trade, scholarship program and Yolanda was the first person in entire village to finish high school. She went on to college and is now the co-director of a health center in the region.  However, Armando, Santiago’s youngest son, is 21 and is never good in school and didn’t want to apply for the scholarship. He likes farming, but there is not enough land for his dad, his brother and him to farm. He works for $3 per day at a large coffee estate down the road. He’s a farm worker. When I sat on their porch in December, we go back every year….I stay very connected to these communities I’ve known since the 80s…. I talked to Santiago. Armando was there and it hit me on the head like a ton of bricks. These great ideological debates we have in the States- when you peel it apart- what we are talking about is Santiago, a fair trade farmer and Armando, a farm worker on an estate. I didn’t pose the question but you can imagine what Santiago would have said if I had asked him… “Santiago, does your son deserve fair trade too?”  He’s not going to say no, don’t let the plantations in. He’s going to say “yes. I want my son to be paid a fair wage and to have good working conditions.”

“For me, at the heart of it, if you look at it in human terms, the real communities we are talking about are the same people. The same families in co-ops and large estates. To draw an artificial line down the center of the community and say ‘all people on this side are eligible and if you’re on the other side of the line, you’re not….It’s unethical and unprincipled.’”

Reach more small farmers in next few years than FLO could ever hope”
“Are we abandoning small farmers: No! We are going to reach more small farmers in the next few years than FLO could ever hope to because we are going to open up the model to small farms who aren’t in co-ops. We are piloting in Columbia, starting with 1000 farmers, hope to include 5000 in the project. We are going to engage that network of independent smallholders and give them a path to organization, using access to the fair trade market as part of incentive.
It’s a pilot- I think it will work, I hope it will work. But if it doesn’t work, we won’t continue it. The point is we are absolutely committed to small farmers, we are committed to small farmers being empowered and getting organized and we are also committed to farm workers on large farms.”

“I would argue that this is broader, more inclusive model is the only way fair trade can maintain its moral authority. If fair trade continues to stand on model of excluding the poorest of poor- excluding majority of people in a product categories in industry- it’s really on moral thin ice- this is where we found ourselves and this is why we felt so committed to innovating the model and, even when it led us to leave FLO. We feel very deeply and we aren’t trying to convince everyone we are right. We are very committed to innovation for impact. We don’t expect debate to go away. We celebrate the debate. We celebrate the fact that there are people who are concerned that co-ops might get hurt. Obviously, we aren’t doing this lightly. We obviously agree that is a potential risk and we are managing for that. I can tell you suffice to say that the debate is part of our journey as a movement. It’s necessary.”

Question: ”How, in practice, are you managing for the impact the certification of estates will have on cooperatives?”

Paul: ”Innovating slowly and with care, we plan to implement 10 – 20 pilots over the       next two years. We will assess results at both the farm level and the sector level, reporting on system-wide sales for both cooperatives and pilot farms to ensure new producers is not displacing the sales of current cooperatives. To further strengthen existing Fair Trade cooperatives, Fair Trade USA is developing innovative new partnerships to connect, create and transform the lives of farming communities worldwide – this is our Co-Op Link program. These partnerships enable targeted projects that help farmers improve quality, increase productivity, improve access to capital, and become stronger business partners.  A few of our current partners include: Ansara Family Foundation, Aspen Network of Development Entrepreneurs (ANDE), Atlas Coffee Importers, AVINA Foundation, Green Mountain Coffee, Kiva, Progreso, Rabobank, Rabobank Foundation, responsAbility, Root Capital, Scientific Certification Systems, Sustainable Harvest, VIVA Trust , W.K. Kellogg Foundation and the World Bank.”

“The opponents of what we are doing are asserting that fair trade doesn’t work on estates, that it only works for small holder cooperatives…. I would really caution people to draw quick conclusions on that. The reality is there’s been some research around the performance of fair trade on large estates in terms of lifting farm workers out of poverty, improving incomes and living standards, working conditions and also empowering them. Most of that research is very positive.  It’s not negative.”

“People say, ‘Have you seen the research that says fair trade doesn’t work on large estates?’

“I say: Show them to me. Show them to me. Because what I’ve read and what I continue to read is actually very positive. It very much matches my own personal experience and part of what led us as an organization and me as a leader here to these crossroads was our experience on larger fair trade farms over the last 3, 4 5 years. We didn’t just say, ‘Oh what a great idea, let’s extend the farm worker model to coffee.’ We actually spent a lot of time on the fair trade certified estates.”

“And my personal feeling and impression of my team from all these interactions is that fair trade works. It actually works. Not to say that it’s perfect and that we can’t improve on it. We want to improve on the farm worker model and we have very specific ideas of how to do that. But the bottom line is that it’s working. It’s really amazing.”

To be continued…

Julie Fahnestock

Julie lives in Cambridge, MA and is currently pursuing her MBA in Managing for Sustainability at Marlboro Graduate School in Vermont. She has a background in international development and grassroots organizing and is passionate about equitable wages, labor rights and the global income disparity. Julie is also a new blogger for Just Means and Socialearth. If you can't find Julie in Cambridge, she's probably on the beaches somewhere in South Florida.

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