Global Policy Forum

Fair Trade Begins to Bear Fruit


By Inés Bení­tez

Inter Press Service
May 2, 2007

The living and working conditions of thousands of small farmers in Guatemala have seen much improvement since they joined the "fair trade" system, which sets new rules for the game in an otherwise difficult global market.

"Before, we lived in great need. The association helped our town to export products, and with training," says Francisco Ijón, marketing assistant of the Chajulense Association, a group that has embraced the criteria of fair trade for its 1,800 coffee growers in the western regions of Quiché and Huehuetenango, where the vast majority of the population is indigenous and poor. Certified by the Fairtrade Labelling Organisations International (FLO), the Chajulense Association exports coffee to Europe and the United States, and began to diversify its production, adding honey and cardamom spice. In 2006 it exported 675,000 kg of organic coffee -- grown without using agrochemicals.

According to official figures, 56 percent of Guatemala's 12.7 million inhabitants live in poverty and eight of every 10 poor Guatemalans live in rural areas. Although the farming sector generates 75 percent of the country's jobs, it represents just 23 percent of the gross domestic product (GDP). The rules of fair trade are different from the rules of the dominant international trade system, and from those championed by defenders of free trade. FLO grants a Fairtrade seal after making sure that the farmers' or production organisations comply with a series of criteria, such as paying fair wages and providing a safe work environment, respect for the environment, eradication of child labour, gender equity and reinvestment in the development of their communities.

One of the benefits was the arrival of automotive transportation on the coffee plantations: the work was very hard until the 1990s, when "farmers who didn't have animals to do it for them had to carry the coffee beans on their backs and had to do a lot of walking. Now the vehicles meet them halfway," says Ijón. Guatemala has 23 groups that export under the Fairtrade seal, most of them small coffee farmers, and a few honey producers. They are assured a minimum price that covers their production costs (essential in the devalued Central American coffee sector): 1.26 dollars per pound (450 grams) of certified coffee (not organic), and 1.41 dollars/lb of organic coffee.

There is an additional payment -- five cents of a dollar per pound for regular coffee and 10 cents for organic coffee -- earmarked for organisation, member and community development, explained Verónica Pérez, the local communications director for FLO, in an interview for this article. The official minimum monthly salary in Guatemala is 178 dollars for farming and 183 dollars for other sectors. The farmers of the Chajulense Association earn around 90 dollars per quintal (43.3 kg), and they produce 10 to 25 each month, says Ijón.

"Fair trade opened up the market for the small farmers, something that doesn't occur with conventional trade," says Baltazar Francisco Miguel, general manager of the Barrillense Farmers' Association, made up of 580 organic coffee producers in Huehuetenango and Quiché, who export to Canada, Europe, Japan and the United States. According to Miguel, the members can earn 25 to 100 percent more than in the conventional market, and they also receive credits from the coffee buyers. Loans are very difficult for small farmers to obtain in Guatemala's national private banking system.

"The small farmers want compensation for their work. The people are humble, poor and illiterate, but they produce something called coffee and they want to earn enough to live decently," says Gerardo Alberto de León, manager of Fedecocagua, the federation of Guatemalan coffee cooperatives, with more than 20,000 members, 65 percent of them participating in the fair trade system. Fedecocagua became the first organisation to export coffee under a fair trade arrangement. That was in 1973, and the coffee went to the Netherlands and Germany.

Across the seven countries of the Central American isthmus there are already 90 organisations certified by FLO that export coffee, honey, sesame, sugar, bananas, cacao, dried fruit, peanuts or cashews, says Kieran Durnien, in charge of FLO's operations in the region. In the opinion of Ron Van Meer, a business consultant for Fairtrade Original in Latin America, the organisation that supplies the Netherlands with products from the fair trade market, the conventional system of exchange "distorts the relations between producers and consumers."

"It is not a matter of maximising earnings, but rather a kind of trade that takes into account factors like the human being, the environment, the non-use of child labour; that is, trade with justice, sustainable over time," Van Meer said in an interview. Fair trade sales saw a 32-percent increase from 2004 to 2005, according to data from FLO, which has certified 586 organisations in 50 countries in Africa, Asia and Latin America.

In Guatemala, fair trade has developed more in agriculture, but the system is also applied to artisan groups, where most of the participants are women. Mayan Hands involves some 230 indigenous women from 11 communities in the southern regions of Xela, Sololá, Chimaltenango and Baja Verapaz, who make handcrafted textile products for export to the United States. Annual sales for Mayan Hands reach one million quetzales (131,578 dollars). The group was founded in 1989, under the initiative of anthropologist Brenda Rosenbaum.

"We pay probably three times more than the conventional market," says director Deborah Chandler. Mayan Hands guarantees a job, provides the materials, and at the beginning of the school year provides a bag of school supplies for the children of the artisans, who earn 32 to 197 dollars a month, depending on hours worked and the type of textiles produced. "The women always say that even more important than the money is knowing that they are going to have work each month," Chandler adds.

But the situation of the artisan sector is more difficult than that of the fair trade farmers, because their products are not for daily consumption, and they face competition from the cheap and abundant items coming from Asia. Mayan Hands is a member of the U.S.-based Fair Trade Federation, and its products are sold by solidarity shops, churches, weavers' associations, and peace and justice groups.

"We need markets that are guided by other criteria. We don't want hand-outs, we want fair prices. It's essential to raise the awareness of consumers," says Harriet Gottlob, a German woman who runs La Casa del Amaranto, a solidarity shop in downtown Guatemala City. On the shop's shelves are colourful jars of mango and mandarin marmalades from Quiché, honey from Petén, and milled amaranth from families in the high plains, organic coffee, plant-based soaps and shampoo, and essential oils from the tomillo and pine.

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