Thursday, February 3, 2011

Trade not aid or aid through trade?

Animma Aroy with her cell meeting minute book

Trade not aid or aid through trade?

This was the challenge from Tomy Matthew, the promoter of Fair Trade Alliance Kerala (FTAK), to a group of visiting Traidcraft campaigners. He put forward that the narrative around Fair Trade, despite an initial acceptance that aid is disempowering, has crept back into the charity 'help the poor farmer' version.

Tomy is not alone in his concerns. In answer to the question posed by an interviewer for a Candian radio station 'if Fair Trade is NOT a poverty alleviation strategy, what is its purpose?' Frans Van der Hoff, the co-founder of the Fairtrade label,said:

Getting a more democratic system into the market can build upon a world where everyone can live [well]. To alleviate poverty, I never said it, because I hate it, because its a world upside down. First you produce poverty and then the north all of a sudden says we will alleviate what we have produced. No, that doesnt work. No, you have to go to the system which is producing poverty and create a quite different system Its an endeavor to correct the charity approach of Fair Trade which we hate. I buy so that the poor bugger can have a better deal. Its ridiculous and that we dont want…”

I'm coming back to this topic, that I briefly discussed in the Small Farmers. Big change blog post, as I have just got back from a visit to one of FTAK's 'social premium' projects in the hilly and beautiful Waynaud area. I have come back several pounds heavier from the generosity of my hosts and also with some food for thought.

The farmers' cooperative decided to spend some of their social premium on a project to see if was possible to increase the earnings of the very small isolated hill farmers of Waynaud; all whom fell beneath the poverty line and who weren't at that time part of the cooperative. They worked with local partners and selected a strip of land which included 34 farmer families to take part in the pilot. All the families were given the option to buy on credit cattle,pigs, chickens, cash and food crop seeds and were given three years to pay back the loan. 
Instantly the families got milk and eggs from the animals which they could then sell and over time they harvested the crops. Depending on their circumstances they selected a mixture of cash and food crops; coffee for example takes 3 years to yield so it's a longer term investment. Interestingly, and despite the complicated logistics of getting small quantities from these hard to reach farms, FTAK agreed to buy their crops so they were brought into the Fair Trade system, rather than just passive recipients.

The evaluation of the pilot showed some very impressive results, all farmers had increased their incomes and most had managed to more than double it e.g. a farmer named Susamma had increased her income from 19000 Rs in 2008 2009, to 34,100 Rs in 2009-2010. The group of farmers also formed a cell and collected a fee from each member every week in order that they can continue to provide micro-finance for future ventures. FTAK will now roll out the programme to other areas.

I was impressed and eek, dare I say it, yes the poor buggers are getting a better deal! I was impressed because it had concrete results, I was impressed because the leader of the cell was a strong smiling woman called Animma Aroy who kept impeccable records and accounts from the repayment and micro credit scheme. I was impressed because the cows and chickens that they got last year now had babies meaning their income would grow again and I was impressed because they've set something up that will continue by itself and that brings the most marginalised producers into the Fair Trade system.

The temptation now is fall back into that comfortable 'save a farmer' campaign line and write up this case study and shout about it to campaigners, but this would skew the reality of the FTAK farmers as this is just a tiny story from a few members of the 3,500 strong membership so I will resist! But it also shows to me that the social premium can be used to further the core aims of Fair Trade, rather than simply a pleasing distraction.

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  1. What do you think about the misuse of aid money by governments? At least Fairtrade is trying to do something different.

  2. Hi Ceri

    I think there is a well reported problem of corrupt governments misusing money so that it never ends up with the people who need it.

    Fair Trade is a completely different system which gets around government corruption by working directly with producers.

    But we also need aid for lots of situations, for example disasters and emergencies or where basic infrastructure is missing.

    So I guess we need both! And for both to do their part well in trying to ensure that the money gets to the people it's meant to help.

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