Dealing With And In The Global Economy: Fairer Trade In Latin America

Pauline Tiffen and Simon Zadek

Introduction

The last decade has seen a gradual convergence of what is considered by actors throughout the mainstream across all sectors as being an acceptable theory and practice of economics. People throughout both the developed and developing world have forcibly adjusted and made profound efforts to live up to the new conventional wisdom. But despite this many people are working harder for less immediate reward. For example, the majority of Mexicans are poorer than they were one generation ago, and in Nigeria incomes have fallen by a quarter since the mid-1970s and in other places it is worse⁽¹⁾. People wait patiently but often in vain to gain the benefits said to accrue from a global economy supposedly characterised by free trade and open markets. For an economics that "only recognises need if it is backed by purchasing power" does not effectively evade the negative social and environmental consequences of the economic adjustment that have been well documented in many forms from environmental NGOs to the World Bank. Whilst these negative views of the effects of the process of globalisation are correct, there is far less to date written about the 'openings' afforded by such fundamental change and the new concepts arising from the adjustment process; the varied struggles not just to cope with liberalisation and its consequences, but to make the most of it and to overcome or outdo it. This chapter aims to outline the efforts of a gamut of organisations who have attempted to deal with and alter the accepted norms of the new global economy. Even as barriers have tumbled down and intervention in the market has been all but outlawed as 'protectionist' under the new World Trade Organisation (WTO) regime, a 'fair trade movement' begun in the 1960s has begun to gain momentum. The exponents and champions of fair trade quite explicitly espouse and flaunt 'non-economic' values and purposes for trading and seek as a point of fundamental principle to see people as the ends and not the means of economic activity.

What is known about alternative or fair trading?

The movement and the alternative trading organisations (ATOs) that are behind it are offering a political concept and practice of a 'fairer approach' to business. The experience and reach of the movement is wide ranging - it is active in all continents, full of spectacular achievements in penetrating markets, overcoming booms and busts, and gifted with the self-sacrifice and heroism of inspired individuals operating in countries with oppressive regimes. But, academically speaking, the experience is scantily documented and thus, does not yet, arguably, qualify as theory. Like many social movements it is a de facto reality yet to be acknowledged by the de jure processes and formal contexts of intellectual thought.

So what is the alternative trade movement and how significant is it?

One of the few books written explicitly with a view to describing the origins and progress of the movement has been by Michael Barratt Brown, Fair Trade⁽²⁾. Much has changed since Barratt Brown published his book in 1993. The movement has grown in size and in many countries has gained a higher public profile. Within technical and development co-operation programmes, non-governmental organisations (NGOs), governments, and multilateral agencies alike are embracing the strategy of supporting small business growth in keeping with the ideological framework of a global market. In this context fair trade as a development strategy has for many traditional agencies come to represent a reasonable blend of market-based economy, and social justice and environmental interests. This is particularly the case for those disillusioned with the failure of most aid-driven development processes.

This recent development-establishment embrace belies a long and complex history which includes political as well as social and economic successes and impacts. Alternative or fair trade is small within the context of overall trade between the North and the South, developed and developing countries - probably between US$300-500 million in retail sales value per annum. But is this the whole story of alternative trade's significance? Thankfully not. While not shying away from values and volumes as indicators, this chapter aims to push beyond using the conventional measurement of wealth in keeping with the wider trends for the incorporation of previously excluded "externalities" into conventional statistics (Zadek and MacGillivray, 1995) [⁽³⁾] . To do this we will examine in some detail the philosophies behind alternative trade, the threats to livelihood and some different organisational experiences of small-scale farmers of primary commodities - coffee and cocoa - in dealing with the free market, and alternative approaches to creating enviromentally sustainable production for artisans living in rainforest zones. Alternative trading organisations have traded a diverse range of products over almost three decades, with, for many years a strong emphasis on handicrafts and textiles, with production based on traditional methods and techniques⁽⁴⁾. Traditionally alternative trade in crafts and textiles has been small-scale with strongly reasoned producer partnerships which have tried to offer opportunities to the most marginal of the rural and urban poor - women, the disabled, those involved in cyclical work (harvests) - with the particularly harsh and unremitting backdrop associated with these sociological groups and occupations in the developing world. Trade in crafts and textiles has also been a spring board for consumer education: about other cultures, wider economic development, world trading regimes and tarriff discrimination issues, for example the Multi Fibre Agreement. In the 1990s shops selling so-called ethnic crafts and household decorative items are the norm in most shopping areas - but a fraction have taken on any social emphasis or responsibility to care for the conditions of suppliers in the country of origin. As such, this traditional ATO activity - with total sales of around US$ 70 million in 1993-1994 - finds itself under constant and increasing competition.

Illustrative Scale Of Craft And Textile Sales Via Top

Ten Alternative Trading Organisations In 1993-1994

Source: Bridge Framework Manual, February 1996 p81 / ~ 1992-1993 figures.

The most rapid growth in recent years has been in food products, particularly coffee. This growth built on twenty-years work in building consumer awareness and solidarity was initially fuelled and accelerated by the Max Havelaar Foundation (MHF) in the Netherlands. In 1988, the MHF established a set of criteria to which conventional companies could adhere and receive an independent "mark" or seal of approval from the Foundation⁽⁵⁾. Among the criteria were baseline standards for trading green coffee covering, for example, a floor price paid to producers below which a company using the mark should not fall, regardless of the prevailing market price. Since 1988 almost US$20 million has been paid to MHF selected producer supply organisations just from the fair trade 'surcharge' on products - i.e. the differential between the market price and the price paid for coffee sold with the Havelaar seal of approval⁽⁶⁾. A further critical determining factor of the returns to small producers of coffee concerns the source of the commodity and the terms of trade. The criteria developed by the MHF went to the heart of the ancient dilemma of the weak and atomised position of most small scale farmers and artisans, primary producers, vis a vis local middlemen or market makers. Under the MHF scheme, all qualifying coffee is purchased directly from small-scale producer organisations, exported by farmer-owned or associated export companies. Affordable pre-finance is part of the deal and must be made available by the buyers to end farmers' dependence on local money lenders and to keep their coffee out of the hands of often unscrupulous exporters. The MHF message that viable trade could be underpined by a fairer deal to the economically-weaker partner - the small producer - has found increasing resonance in all industrialised markets. Coffee was a fitting 'traditional' commodity for the movement to work with in that small-scale peasant family farms are the dominant global mode of production, making up as much as 15% of world coffee production. Since 1988 other 'fair trade marking' organisations (FTMOs) have begun to spin off into a well coordinated international network (including TransFair International in Germany, Austria and the USA/Canada, the Fair Trade Foundation in the United Kingdom and Max Havelaar in Denmark, Sweden and Switzerland etc) which works on the development of product and trading criteria, the development of a producer register for each targeted commodity and global marketing of the message of fairer trade.

The fact that coffee brands on sale in industrialised markets with the respective fair trade seal have from 2-5% market share, with the highest percentage penetration in Switzerland. Fairly traded brands, furthermore, have achieved widespread - more than 90% - distribution through conventional outlets (e.g. supermarkets), illustrating the extent to which the fundamental premise of fair trade is seen by retailers as acceptable to the buying public⁽⁷⁾. This latter perspective suggests that the 'fair trade' experience in coffee is pointing the way to a paradigm shift in the marketplace, something not quite revealed by a conventional statistical analysis of market share, turnover and throughput. What distinguishes 'fair trade' from other trade?

The many active parties in the fair trade chain all play roles that are comparable to conventional trading - design and product development, production, logistics, transportation, marketing, customer service and consumer mobilisation (normally called PR or advertising). In fair trade, however, the motive, scale, orientation and ownership and end messages are distinctive.

In general terms the differences are as follows. At the heart of fair trade is that the primary producers come first, not the product or even the consumer. Local skills, natural resources and context are key. The alternative trader seeks to differentiate and to recast the value of inputs by the different parties in the trading chain, setting out deliberately to maximise the gains from trade that accrue to the Southern suppliers, the weakest 'links' or protagonists in the trading chain, rather than to themselves or to superfluous intermediaries.

Fair trade must therefore means in particular a 'good' price to the primary producers. But notions of 'fairness' are very varied as the attempts at conceptual differentiation listed below indicate. ATOs know the power and value of information about the market and seek to share this and thereby to strengthen the bargaining power of their trading partners relative to other local and international markets. There are no exclusive relationships. ATOs recognise the need for product and organisational development assistance. In most cases, marketing means raising the awareness of the consumer to social justice and environmental aspects of trade in general as well as the brand or product being offered. ATOs frequently involve producers in this process also - for exmple by voicing them as directly as possible to the consumer.

For a wide variety of other organisations that are not directly engaged in trading - political and labour organisations, social movements, environment and rights campaigners and so on - fair trade offers an opportunity for social organisation and mobilisation. A fairly traded product - whether a cotton shirt, an organic chocolate bar or a record - can offer a focal point for messages about how alternative economic theory might look in practice writ larger. Successful trading then becomes a tangible way to redress social and economic injustices of the past or to demonstrate the long-term viability of models based on more equal social relationships between buyer and seller, a more co-operative and less competitive exchange of goods between people. As such, many people are attracted to the idea of fair trade because it is a strong statement about the way the world should be, and provides a basis on which to critique the impact and effectiveness of the prevailing neo-liberal model.

Does it work ? What has it meant so far?

The fair trade movement is not homogenous. Some Northern trading companies in the movement are not-for-profit trading offshoots of NGOs working in conventional development cooperation, such as Bridgehead which is a division of Oxfam Canada. Others are now self-standing trading units, such as the Fair Trade Organisatie in the Netherlands - which also has a producer development arm, Fair Trade Assistance. Some have Christian roots and principles: Traidcraft Plc (UK), SERRV and Selfhelp (USA), for example. Twin Trading (UK) was established by the Greater London Council, and has a sister non-profit charity, TWIN (Third World Information Network), that engages in research, publication, and commodity trade development. Alter Trade in Japan, and CTM in Italy have their origins and client networks in the consumer and worker co-operative movements.

The Southern trading partners in the movement are also varied. Most have some explicit community orientation, but with many different organisational forms and traditions. Some are co-operatives, such as the Tabora Beekeepers Co-operative in Tanzania; some are community owned organisations, such as the trading associations of the ah±u in Mexico; some are parts of the government, such as Tanzania's coffee parastatal, TANICA; others are traditional communal arrangements, such as the Ejidos in Mexico which date from the revolution, or new forms entirely, based on a mix of modern business and village or indigenous traditions such as cocoa farmer organisations Kuapa Kokoo in Ghana and El Ceibo in Bolivia. The heterogeneity of the movement makes it difficult to reach general conclusions of fair trade's effectiveness in offering a 'good deal' to Southern producers. There is no single or commonly agreed set of measurable criteria against which the quality of all trade can be assessed, although there is a Code of Practice which has been subscribed to by all members of the International Federation for Alternative Trade (IFAT), which was founded in 1989 and aims to provide a forum for Southern producers and Northern importers (IFAT, 1993).

Despite the efforts of IFAT and others, however, the effectiveness of fair trade initiatives is hard to generalise through the prism of single and universally applicable rules. Effectiveness often needs to be assessed against criteria that take into account the specifics of the market which is being entered and the supply-side realities and challenges. However, it is agreed by the movement that a 'fair price' is a critical element of fair trade. Moreover, as fair trade enters the terrain of conventional trade, 'price' has become a major plank in the public positioning of products bearing the fair trade marks or seals. This point above all reinforces the simple message of the FTMOs that the " 'established' economic thinking fails adequately to describe production situations, where small-scale producers are forced to extreme levels of exploitation of themselves and their families"⁽⁸⁾.

IFAT Code of Practice

to trade with concern for the social, economic and environmental well-being of marginalised producers in developing countries - this means equitable commercial terms, fair wages and fair prices...not maximising profit at the producers' expense.

to share information openly....to enable both members and the public to assess ... social and financial effectiveness.

to reflect in their [own organisational] structures a commitment to justice, fair employment, public accountability and progressive work practices.

to ensure a safe working environment...to provide the opportunity for all individuals to grow and reach their potential...to ensure human conditions, appropriate materials and technologies...good production and work practices

to respect and promote development for and responsible to both people and the natural world

to manage resources sustainably and to encourage production in a way that preserves and develops cultural identity.

Source: Based on IFAT 1993

But what constitutes a 'fair' price can be understood in many different ways, as is the case in discussions about what constitutes a 'level playing field'. While the issue is certainly not purely subjective, there will always be a question of overall perspective and context. Below we list some of the ways in which actors in the fair trade movement have discussed and interpreted the meaning of a 'fair price'.

1. more than the local price currently available to the producer;
2. more than the price available from other international traders;
3. enough for producers and their families to attain a 'reasonable' or nationally recognised remunerative living standard;
4. a price that enables the Northern partner to be no more than viable, but not make a significant profit;
5. a trading regime that allows Southern producers to earn the same as their Northern trading partners;
6. fixing remuneration to all parties involved directly in the chain, reflecting input, skills and risk and not purchasing power or lending power alone - for mutual benefit.

A clear perspective as to what constitutes a 'fair price' is needed by anyone wishing to assess the 'fairness' of any particular trading relationship. For example, a British ATO, Traidcraft plc, has published in one of its social accounts a breakdown of the final retail price of several of the products that it trades (Traidcraft, 1994). It is apparent from the example set out from these documents that the producer receives only a small proportion of the total price, that the British government in fact receives more than the producer through Value Added Tax, and that Traidcraft makes a financial loss on this particular product. A reading of the full accounts for that year also indicates that the producers of this product get a higher price from Traidcraft than from local or other international commercial traders.

To complicate the matter further, the in-depth response to the question what is distinctive about fair trade transcends a debate only about price. All fair traders strive for a strategic and qualitative change in the trading process in favour of those who are traditionally the weakest. A floor price or other formulae-based approaches give a strong message in a market climate which resists all and any controls or economic instruments (taxes, subsidies, incentives etc.), but at best it remains only a symbol or emblem of fair trade and its moral and economic objectives. Fair trade aims to build better livelihoods for the poorest and weakest in the trading chain and to leverage developmental change and longer-term political shifts in their political and economic environment. Trade is the means for this end and so the signs of success might be manifested in a farmer or artisan's organisation as any or all of the following:

• greater awareness, the ability to plan and think strategically and to participate proactively in the marketplace whether locally or internationally
  
  
• greater bargaining power through knowledge, experience and access to infrastructure and inputs in the trading chain (via direct ownership or ability to negotiate terms from a third party)
  
  
• greater levels and equitable distribution of resources at the community level to invest in human capital for the future, the next generation.

Fair Trade-Versus-Free Trade; the Experience of Latin American ?

The acceleration of grassroots efforts to organise has coincided with particularly adverse conditions in the last decade for farmers in the production and marketing of crops and commodities for both local and international markets . The promotion of alternatives - in the broadest sense of the word - has been a priority and a human and environmental survival strategy. In addition to historically low prices for many formally traded commodities (such as coffee and cocoa), the period has seen the reduction or withdrawal of government price supports, technical and other advisory programmes and virtually all state-sponsored protection for indigenous agriculture and basic food crops notably corn (maize) and rice, under direct and often inequitable competition from imports. Changes in banking systems and an end to state support for agricultural credit has also meant a rise in exploitative loans and the consequent privatisation of land via forfeitures. In other cases, land is being abandoned with migration away from rural areas to the cities the sole option. How did farmers respond? What role did external non-governmental agencies and alternative traders play? What of the broader indicators of fair trade posited above - greater awareness, the ability to plan, think strategically and to participate proactively in the marketplace, gain greater bargaining power, and to make investment in human capital for the future? In this section we present examples from Latin America and try to consider objectively and from the farmers' own perspectives the impact. the case of coffee

An industry leader - Nestle - stated in a recent public statement that its own activities in the market had a more beneficial effect on small coffee producers that fairly traded or "charity" coffees. The company argued that:

• the most important benefit to coffee growers is to sell as much coffee as possible;
  
  
• the price paid to growers depends on the balance between supply and demand;
  
  
• the international market is neutral;
  
  
• there are many ways of buying coffee none more ethical than another. Nestle has concluded: "The charities are to be applauded for their efforts to help some cooperatives ...but Nestle's involvement in such work is already much more extensive"⁽⁹⁾.

This public statement may ultimately have historical significance in that it is the first time that the company has entered into public debate with advocates and practitioners of fair trade implicitly accepting that a company's social and environmental footprints are a legitimate basis against which its performance is measured by society.

THE FACTS AND FIGURES⁽¹⁰⁾

Important, in this context, is then to fully understand the changes that have been occuring in the last decade in the coffee regions of Latin America and to the people who work and live there it is necessary to review what happened in the coffee market in the period 1989-1995. Without this backdrop and some analysis of the causes and effects of this boom and bust, the scale and scope of the efforts made by farmers to organise and the extent to which fair trade coffee defied the market rules is hard to discern.

(a) The failure of the International Coffee Agreement. The principle cause of the price crash in 1989 was the failure of the coffee producers and consumers to renegotiate an agreement to take effect on expiry of the prevailing one. Consumers, meaning consuming countries, and particularly the most powerful market makers in the USA, no longer wanted to support an agreement regulating supply from coffee producing countries because: they wanted to stop the cheap (non-ICA controlled) coffee going into the Soviet and Eastern European markets being resold to the West illicitly (so-called "leakage");

the agreement did not enable the US to purchase what it wanted, which was less robusta coffee and more mild washed arabicas - notably from the producing countries of Central America and reflecting gradual but irrevocable changes in coffee drinking preferences and hemispheric geopolitics.

Consequently the International Coffee Organisation failed to broker a new agreement which hinged on a change in the allocation of "quota" - the quantity of bags of coffee a producing country may sell in a given year - to adapt to new situation and pent up market demand. Only Brazil had "surplus" quota and would not concede any part of its share. No agreement could be reached on how one producing country could be allocated a "quota". The historic but profoundly inappropriate methodology was based on volume of production. The result was the "liberalisation" or "freeing" of a formerly controlled or, at least, arbitrated market with great volatility in prices and production the result. Central American origins were early winners in a narrow sense. The main losers were the robusta and other lower grade coffee producers, principally African producers. Nobody directly involved in growing, processing and marketing coffee benefits from the uncertainty of price and supply of quality coffee.

(b) Short termism and the loss of relationship. The 1989 bust revealed to a new generation of coffee traders a simply truth: the longer you wait the cheaper the product. Earlier coffee trading practices reflecting "buffer-mentalities" and gentler times - holding stock, stock financing and longer lead times - were cast aside. "Just-in-time" practices reached the coffee trade, with the added incentive for the very brave or well-connected trader able to drum up a decent coffee at the last minute, of cent-per-lb savings or extra margin by the minute as prices descended. Volatility in any market attracts speculators keen to make a turn on the movement of decimal points on their computer screens. Even without the levels of financial incentive inherent in the downward part of a price cycle, this style of trading and buying is now almost the norm. Loyalty between buyer and supplier is increasingly negligible and long-term trading relationships are sacrificed in this post 1989-crash "zero-sum" trading game. The trading risks are substantially increased for suppliers too, since litigation, claims and arbitration will more certainly follow (back down the trading chain or up stream) when, as a result of less "slack" in the chain, the consequences of supply failures - i.e. from delays, adverse conditions, defective quality etc. - are ever greater.

(c) Booms and busts - the risks and benefits of financing coffee. The levels of stocks of green coffee in consuming country warehouses are a critical factor. Levels have traditionally been held at 2-3 months supply of projected consumption. In the bust and boom cycle described in the 1989-1996 period stocks were held at higher than normal levels initially - approx. 20 million bags in the USA and Europe against a 10-12 million bag norm. This "fall back" stock checks any rise in supplier prices. The FACTS AND FIGURES box above highlights the relationship between declining levels of stock in consuming countries, rising levels in producing country (via the retention plan) and the recuperation of the price. For most suppliers of green coffee the prices rose in a clearly orchestrated manner, the harvest period, and gains falling principally to importers and end users. Few small-scale producer organisations have recourse to financial resources to hold on to their product in general, but rather for lack of liquidity are forced to sell to the local acaparador ('coyote') or intermediary. Farmers lose ownership of their product relatively fast. They are seldom able to enter consciously into this macro-level market-shifting dynamic and attempt to influence it to their advantage or at the very least to minimise risk.

Price Speculation And Volatile Markets

The View From The Farm

"For four years, no, longer actually, since 1986, we have been really badly off. Now the new [rising] prices finally compensate for this. They give us something to work with. Finally there should be some money to invest in technology. We've been doing everything the hard way...by hand. Lots of members in the coop didn't give up the struggle, didn't give up tending their farms and being good coffee farmers, though."

Q: Why didn't they give up?

"Because even in the bad times our coop has always provided members with services that no-one else does: access to a doctor - of course not a fully qualified doctor...and we have always given at least some 'anticipio' (cash advance) when members delivered their coffee. Money now is our big preoccupation. Other traders have arrived and are paying 370 soles per quintal in Jaen [the nearest large town]. We've been paying 350 and don't even have enough credit to keep that up... some members would probably sell to the others to earn that bit extra, others even if they don't want to may have to!"

"Over the last four years buyers haven't been near us, certainly not to the farm gate. Now they are pulling up outside our houses in large trucks! With cash in hand."

Q: How are you dealing with this?

"Each coop has an Education committee - apart from technical training they are responsible for keeping members informed about the markets, clients through meetings and discussions. Our coop is a Chapter of the OCIA* and as such we were able to sell our organic coffee at around US$ 103 per quintal. This is at a time when local traders were paying 100 soles [around US$ 50]. So many members are aware and are happy. Some are not and they will feel let down if we cannot compete now the traders are finally back..." Source: Author's notes of a conversation with the President of Bagua Grande coffee co-operative, north-east Peru, Sr. Mario Villalobos Perez, 1994.

* Note: OCIA - Organic Crop Improvement Association - certifying body.

Similarly, few producing countries can sustain the levels of liquidity or the political cohesion necessary to plan and play a permanent buffer stock role. The producing country retention plan attempted in this period can be said to have worked - given the market demand for 'milds' the solidarity and co-operation of Central American and Colombian producers were pivotal - and the initiative and collaboration shifted the market. But, few commentators are certain if Brazil, a major player in every regard (scale of production, historic significance as a producing country etc.), ever actually held and financed new crop stock in accordance with the scheme. (d) Coffee production and emigration to the cities. Since the late 1980s, the price for coffee is generally thought to have fallen well below the viable cost of production. Break-even is assumed to be US$0.70-0.90 per pound depending on type and mode of production. At this level or lower, costs remain uncovered and labour is under-rewarded; plant care declines and so then, concomitantly does quality and yield; income levels to families fall with other socially and economically inevitable results: emiseration, malnutrition, migration from the rural areas and great damage for future generations - human capital for these marginal communities. what did farmers do 1989-1995? the case of mexican coffee.⁽¹¹⁾ As the market tightened about them, farmers from all over Mexico came together in a catalytic process of definition, solidarity and reorganisation.This was not an isolated process and indeed the efforts spread over state and national borders and across continents. The following local-to-global summary shows the depth and range of actions initiated and undertaken in the tense and difficult period under review.locally: long-time organisational struggles for land, for direct dialogue with the state/governors, the national institution for coffee, INMECAFE, the state and private banks and state credit and technical and agricultural service institutions, come to a head.

The Social Consequences Of Coffee Market Busts And Booms From The Perspective Of Coffee Growing Communities, North Eastern Peru

"Coffee is THE cash crop here. Bad prices mean great hardship. Continued bad prices (as we have seen since 1986) influence all activities in the community...In school we really see the effects in our students. They are eating less and so their attention span is poor, they take poor notes, they are tired and can't concentrate. Some stop coming completely: the walk is too far, or if they are sick, their parents can't afford medicines. The parents can't afford to buy books or uniforms." "When there is no work people, particularly the younger, more educated ones, leave....they go and work on 'the other crop' [he is referring to coca]. They go to be labourers for the drugs people or even to grow coca. The only substitute right now for coca is coffee."

"In times of low [coffee] prices malnutrition stands out - skinny children, ribs showing, no shoes and a variety of diseases...for example walking to school with no shoes makes kids prone to getting 'pique' [a parasite that bores a hole in the sole of the foot]." Carlos Carranza Fuentes, teacher at the school for the last 5 years, in charge of the school medicinal herb garden.

"I went to Lima once. To see if I could get work. But I'm a farmer. What can I do in a city? I spent 15 days there, walking around, looking, asking. That was enough." Eleazer Arbildo, coffee farmer. Sr. Arbildo has 10 brothers and sisters and two children aged 8 and 12. His farm and house is nearly two hours walk from the village and coop.

Source: Interviews made in 1994 by the author.

state level reformation and refocus of many farmers organisations into new more independent (non-CNC operated and dominated) unions of coops, Ejidos, state-level networks e.g., the Coordinadora Estatal de Productores de Cafe de Oaxaca (CEPCO) formed by 30 independent farmers organisations, building on years of grassroots efforts and struggle, to tackle the new insecurity in the state and the market; access to external credit from ethical banks e.g. EDCS⁽¹²⁾. Other non-governmental institutions supported the efforts to meet, diagnose and prepare strategies, for example OXFAM and the Inter American Foundation.nationally: Coordinadora Nacional de Organizaciones Cafeteleras (CNOC) is formed with approx. 65,000 coffee farmers organised local or regional unions, federations and co-operatives in six states of Mexico, its own export trading arm is set up Promotora de Cafes Suaves de Mexico and some CNOC members invest in and support the development of a company to own and promote a new brand for their coffee in the USA, Aztec Harvest.

regionally: Union de Pequenos y Medianos Productores de Cafe de CentroAmerica, Mexico y el Caribe (UPROCAFE); Frente de Cafetaleros Solidarios de America Latina; Via Campesina in Central America; Enlace Sur-Sur (Caribbean) are formed to exchange experience and offer support (see aims of UPROCADE below).

inter-continentally the Small Farmers Co-operative Society (SFCS) including coffee farmers co-operative unions from East Africa formed in 1992; market-based TWINcafe (information, New York futures hedging and options service, credit fund and market representation for SFCS members). First international Conference on Organic Coffee held in Chiapas (1994) with 200 international visitors and participants.

Summary Excerpts Of Aims And Manifesto Of Uprocafe

To work together to improve the standard of living of authentic small-scale producers and to address the specific problems each member faces To deepen and strengthen relations between coffee producing organisations, by promoting exchange of experiences of production, financial and organisational management and trading. To promote processes that contribute to the appropriation of trading mechanisms by the farmers themselves To develop action plans that will build strong organisations of producers and good co-ordination in each country To function as interlocutors with international institutions and generate solidarity in support of the demands of the different organisations To strengthen regional and national unity to contribute to the defence of the rights of the members and to promote the ideal of Latin American integration. Source: UPROCAFE Constitution document/Mexican press articles.

Mexican farmers access the market.⁽¹³⁾

From small beginnings, though, another process also began in this period. Only three Mexican coffee organisations had regular "fair trade" sales opportunities before 1993 - UCIRI (Oaxaca), Coalicion de Ejidos Atoyac (Guerrero) and UNCAFESUR (Chiapas) hence there was more pressure and focus on the effort to develop a 'comercializadora' or trading arm oriented towards and competent to deal within the conventional coffee market. This was set up as the Promotora de Cafes Suaves. Furthermore, Mexican coffee attracts a duty on entry to the European market as a non-ACP origin, gets no special treatment under the General System of Preferences tariff arrangements and is excluded from the exemptions afforded Andean coffee producers, such as Peru under various anti-narcotics programmes. The tariff has acted as a disincentive to Mexican coffees in the European market and accentuated the need to develop access strategies on better terms to the USA market. The outline summary of the strategic access process of Mexican farmers shows a dynamic result.

In 1988 Coalicion de Ejidos (Atoyac Guerrero) export 250 bags of green coffee without passing via the (PRI-dominated) Confederacion Nacional Campesina (CNC); INMECAFE is successfully lobbied to give quota stamps directly to a farmer's organisation for the first time. By1994/1995: second-level farmers organisations have reached levels of organisation sufficient to achieve trading norms and are exporting via the Promotora to export markets

the grassroots constituents of the 11 primary level organisations number at least 60, with an estimated 45,000 farmer members and a range of social and ethnic origins and organisational forms

all eleven organisations have made contact and "broken into" the alternative or fair trade market adding to the returns and sense of contact and achievement

Aztec Harvest - a direct promotional sales initiative (set up and owned by five CNOC farmer organisations) into the USA gourmet and specialist organic coffee market grew to incorporate coffee from nearly 1000 farmers in 42 villages after its inception in 1992.

in the harvest period 1994, the Promotora de Cafes Suaves de Mexico - the trading arm of CNOC members - traded 51,354 bags of green coffee to US and European markets with an approximate value of US$ 6.5 million (FOB-free on board).

Union de Ejidos de la Selva (Chiapas) opened a coffee shop in a fashionable part of Mexico City to promote the consumption of high quality coffee and increase the Mexican public awareness of environmental and social issues in Chiapas.

Gaining the premiums on fair trade contracts at times when prices were below the cost of viable production was undoubtedly crucial and made the difference between bankruptcy and survival for many small-scale coffee farmer organisations in this period. The market was at its most unrelentingly free and destructive. In the words of a well-travelled journalist familiar with both Mexico and Peruvian situations: Can a trade that rewards its producers so little, that preys on their poverty in this way, be anything other than contemptible?⁽¹⁴⁾ But the knock-on effects of access to fair trade markets and increased activity by farmers in other trading arenas may be far wider and of greater significance in the longer term. The effects are both quantitative and qualitative. In Tanzania, for example, a co-operative union can enter the formal auction where all exporters must under the current national system meet to buy coffee and can 'bid up' the price of all their coop's coffee to other buyers. With Cafedirect or other fair trade forward contracts in hand, the other buyers are being forced to compete in a way that would not otherwise happen. Fair trading alongside conventional trading is, albeit in a small way as yet, ratcheting up other companies' standards of behaviour, producer expectations and product prices to achieve more remunerative levels of return for farmers.The value of this knock on benefit has not been calculated.

To conclude this coffee case with a short qualitative assessment it seems most appropriate to use the views of a coffee farmer. A few years ago, before initiatives like cafedirect and Max Havelaar it seemed as if farmers were only good for walking long distances with coffee on their backs...I think that the 'comerciantes' (local traders) just couldn't imagine that one day we'd be working directly with people from outside. Not just that...but that they'd be interested in us enough to come and visit. The comerciantes certainly never thought we'd learn to trade ourselves. When we are not trading...when we have no market or no credit ... the price the traders offer us goes down.

What about the Bigger Picture ?

(a) Environmental dimensions of fair trade

"Unless we build markets for forest products and make sure the benefits flow back to local communities, forests will continue to fall to loggers, ranchers and farmers who see no other option." (Mike Saxenian, Conservation Enterprises Director, 1991)

Given the constraints imposed by the economic system and consumer interest in low-priced products, achieving sustainable agriculture and environmentally neutral trade is a challenge. A complex issue in general, one particularly problematic aspect is the common, but artifical distinction between environmental measures and impacts on the one hand and social and economic policies or regulations on the other. This division of the 'indivisible' is often the bane of policy process and debate within and between international organisations⁽²³⁾. The following is a short synthesis of these issues as they affect agricultural production and fair trade:

integrated pest control, whether with minimum or zero chemical inputs, may reduce yields and thus producer earnings - who pays for this is a questions that the free market cannot and governments are unwilling to address

• local imperative to address even clearly unsustainable practices which are detrimental to the soil and fertility
  
  
• the failure of 'northern' consumers to adjust their consumption practices and expectations but nevetheless attempt to regulate against the entry to their markets of so-called "unsafe" or "unsustainable" products is a political issue and smacks of a new era ahead of "bio-colonialism"
  
  
• trade across long distances is seen as contrary to the principles of sustainable practice because of the use of non-renewal fossil fuels and the resultant displacement of local production and thus agricultural self-sufficiency
  
  
• while there is clear complimentarity between environment-friendly and people-friendly agriculture there is not an absolute overlap e.g. certified organic production can be undertaken in exploitative conditions and with poor or non-existent labour provisions (and vice versa).

Debate about the environmental dimensions of fair trade and international trade in general still lacks an appropriate framework to assess what might be termed 'competing' negatives in an equitable way. In the short term, fair trade aims to offer a response to people facing oppressive poverty and to increase their ability to defend their rights. However, it is necessary to question for the longer-term, the overall impacts of different modes of production and ownership (where the profit goes and the balancing of the short- and long-term). If producers are weak and atomised in the trading chain, they will be forced to compete wherever they operate in the world. Such competition often forces standards down to a lowest common denominator.

The Tagua Initiative⁽¹⁵⁾

The Tagua Initiative is a project of Conservation International, which was founded in the late 1980s to harness economics to promote conservation by creating international markets for products such as tree oils, plant fibres, fruits, nuts and latexes. Begun in 1990 the aim of this initiative was to link rural harvesters of the ivory-like nut of the tagua palm tree with makers of buttons, jewellery and arts and crafts.

Environmental Threat Clearing of forests - some of the richest rainforests including the wild tagua palms, on earth stretching from Panama to Brazil - for agricultural production; lack of incentives to protect natural resources.

Region: Esmeraldas Province, Ecuador and El Valle, Gulf of Tribuga on Colombian coast. Bio-geographic region known as the Choco. Per capital income in the region US$600 p.a. about half Ecuador's national average and well below the national average in the areas of Colombia.

Organisations: Comuna Rio Santiago Cayapas - 311 families, about 1244 people, Fundacion Inguede- a Colombian NGO running workshops and diagnostic and research elements of project in conjunction with botanical/palm tree experts of the National University of Colombia, Conservation International, CIDESA - project Coordinators, ten scattered communities composed mainly of black descendants of slaves living by fishing and farming.

The Venture Before development of inexpensive plastic earlier in the century one in five buttons manufactured in the US was from tagua with Ecuadorian exports reaching a peak in the 1920s of US$20 million a year. Relationships developed with garment manufacturers and agreement on "environmental" marketing message in return for a royalty. The royalty is for tagua project and other bio-diversity product initiatives, (including the marketing of Brazil nuts from the Tambopata conservation area). Tagua results include the following highlights:

By 1993 more than US$100,000 was generated in royalties.

By May 1993 - 850 tons sold within Ecuador 40 tons exports to USA and Japan.

More than US$ 1.5 million wholesale value in button sales. More than 30 garment manufacturers with markets in USA, Europe, Canada and Japan.

By 1994 - marketing support and back-up operation in marketplace self-financing, although technical problems emerging with modern detergents.

Other lessons from the initiative show that local processing, not just product collection, increases financial returns and incentives for local people to protect their biological resources; local enterprises should be supported with loans and not grants and activities geared for local as well as international markets.

The complexity of the environmental dimensions of fair trade is illustrated in the case of the Tagua Initiative, which has sought to resolve some of the fundamental challenges of a social and environmental nature via market access and market-making efforts in the fair trade mould.

(b) Socially responsible business

Another area of 'fair trade' activity has been the growing rapprochement to the idea by the broader community of 'socially responsible businesses'. These include a wide range of business sectors, including banking (see 10). Most prominent of the retail and brand-based chains have been the British cosmetics company - The Body Shop - and the US ice cream company, Ben & Jerry's Homemade. Both have experimented in high profile 'fair trade' initiatives as a part of their overall socially-oriented policy and practice. The Body Shop has traded with communities in several Latin American countries, notably Brazil and Mexico. Ben & Jerry's 'fair trade' purchases from Latin America has included coffee from Aztec Harvest which is used to flavour the company's ice-cream products.

Unlike the experience of the ATOs to date, the claims of commercial companies to be trading fairly with small producers have been challenged. Companies like Ben & Jerry's and the The Body Shop have been accused through the media of exaggerating and distorting their activities for public relations purposes. Some companies have responded to these challenges by opening their business practices to external inspection. The Body Shop and Ben & Jerry's in particular have moved towards comprehensive 'social auditing' of their activities (Zadek and Raynard, 1995)⁽¹⁶⁾. These companies approach to social auditing has included discussions and consultations with a range of "stakeholders" in the company: including Southern producers, the selection and application of key benchmarks, indicators and targets, external verification, and public disclosure. For example, The Body Shop's recently published Social Statement included independent assessments of its 'Trade Not Aid' activities with Southern producers. The document highlighted a mixed record of achievements, but with an overall picture of positive economic gains to Southern producers (The Body Shop, 1995).

Interestingly, both of the companies involved proactively in fair trade have interpreted the principle behind 'fair trade' as one that they wish to apply more widely, that is including relationships with community-based producers in the North as well as in the South. This is a noteworthy and legitimate "build on" to the alternative trader's original North-South concept which properly belonged to a period of post-colonial independence and predates the reality of the global market. The set of aims and principles for operating equitably between North and South which are presented on the next page were developed in 1985 at the founding Conference of Twin Trading⁽¹⁷⁾.

They show a emphatic North-South division of labour and aspect to the problem of unequal bargaining power between parties in the economic system. They could be reworded to reflect the shift in axis to a new economic divide and the globalisation of need and economic difficulty for people working at the margins in all societies.

(c) The marketplace and consumers?

There are a number of factors influencing the evolution of 'fair trade' but engaging the interest and commitment of consumers to purchase fairly traded products over the "unfair" variety is a significant challenge. Although a consistently positive view emerges from a surveys of consumers' ethical concerns - the majority of whom say they support the notions behind the fair trade concept⁽¹⁸⁾ - the same proportion do not yet translate this intention into purchases. Furthermore, according to the Director of Transfair International, Martin Kunz, consumers cannot easily detect between false and genuine claims, even with the rise in the presence and authenticity of seals and marks denoting more carefully substantiated claims (chemical free, fairly traded, recycled contents etc.). Other European fair trade mark initiatives have experienced a constant and uneven battle between the pulling power of their own "endorsement" compared to the "credentials" of a familiar, heavily promoted mainstream brand or a corporation perceived as solid and trusted⁽¹⁹⁾. Companies wish to awake less often to banner headlines and public relations headaches such as the following:"The man on the left (a footballer) has a contract with Nike worth ú2m. The workers who made his shoes get ú40 a month."⁽²⁰⁾ A spokesman (with the title of Head of Human Rights), from a rival company went on the record in the same article with a report his company's "extensive programmes for monitoring and audting workplace conditions..."A second illuminating example involving allegations of child labour and harsh regimes with pay at 20 pence an hour for 12 hour days in Central America:"Exposed: shame of Gap's child labour sweatshop"⁽²¹⁾ The factories supplying the Gap contravened even the company's own code of conduct and international labour laws. Of the sub-contractor, the company spokesman was quoted saying: "We will track this [situation] down and stop it."

There are two phenomenon however in the domaine of the consumer that are provoking companies to review their own operational systems - the capture of market share by the new fair trade brands and the negative impact on sales of public responses to disclosures of poor or negligent corporate performance in the social and environmental areas.

The Principles Developed For The Development And Practice Of Twin Trading⁽²²⁾

1. This statement of principles applies equally to South-South and North-North relations as well as to those between North and South, although it must apply most particularly to the latter, since these principles have been most frequently disregarded in their case.
   
   
2. The basic principle of all exchanges between countries, whether of goods or services or technological equipment, patents and know-how, should be the mutual benefit of the peoples of those countries and not the profit of private capital.
   
   
3. All projects and exchanges should be directed towards abolishing inequalities of income and wealth and towards overcoming the results of existing unequal exchange and underdevelopment in the past.
   
   
4. Every effort should be made to prevent the establishment of monopolistic or monopsonistic positions in the market whereby prices of exports to the Third World are raised and prices of Third World products held down or rendered unstable.
   
   
5. All development projects, products, machines, tools seeds etc. and technology made available to the Third World should always be subject to the free and independent choice of the Third World parties.
   
   
6. Financial arrangements - credits, loans, grants etc. - should be more easily available and freed of conditions, whether political or other and should be designed to ameliorate rather than exacerbate Third World indebtedness.
   
   
7. All restrictions on trade imposed by First World governments, whether tariffs or non-tariff barriers, especially on finished products, should be lifted so that Third World countries can enter a fair world division of labour.
   
   
8. Joint projects of First and Third World producers should be established to work out alternative technologies in appropriate fields to meet the real needs of their peoples and to conserve scarce energy and natural resources.
   
   
9. Third World producers should receive positive assistance to diversify their range of products and to increase their participation in the processing, refining and marketing of their natural resources, possibly through joint agreements with First World producers.
   
   
10. Planned agreements for trade and technology exchange should be encouraged, including forms of barter and countertrade, not only between nation state governments, but between regions, cities and other localities, and between communities.
    
    
11. Training in the necessary skills for developing new technology and the opening up of professional posts to Third World candidates should be a major element wherever appropriate in development projects and technology agreements.
    
    
12. Corrupt practices, bribery and backhanders of any sort must be eschewed and prevented in all trade relations and technology agreements.
    
    
13. Trade unions in First and Third World countries should seek opportunities for meeting together to draw up a code of labour for manufacturing industries in order to universalise best practices, such as the ILO Code.
    
    
14. Workers, whether in co-operatives or in other forms of economic organisation, should be encouraged to develop their own decision-making arrangements and methods of work.
    
    
15. Equal opportunities for women, for all races and faiths and for disabled persons should be guaranteed in all trade agreements and development projects.
    
    
16. The international boycott of trade and other economic relations with the apartheid regime of South Africa should be maintained and strengthened.

(d) Fair trade as catalyst - qualitative competition

The other driving force behind the success of the fair trade movement and the take-up of social issues by mainstream corporations is its capacity to influence mainstream business directly by its very presence in the market. The scope of this phenomenon may just be emerging, namely: the ability to transfer the operational principles of fair trade, without compromise, into extremely effective and competitive business. Fair trade - trade which systematically weights its total quality and operational systems in favour of primary producers and is re-writing the rules on consumer communication - has begun, in practice and in the full face of competition with conventional private companies to prove effective and successful at several levels including across normal commercial indicators. In this way fair trade is beginning to achieve a crossover into the territory of conventional business: taking market share in the industrialised countries, outperforming conventional companies and their trading systems in the third world context.

Three examples illustrate this critical approach to achieving leverage over markets dominated by large multinationals.

1. The El Ceibo Co-operative in Rio Beni region of Bolivia was set up in 1978 by migrants from the highlands arriving originally to the region in the 1950s. By 1994, the co-operative's annual earnings from sales of organically certified cocoa beans and chocolate sold to health food stores and fair trade markets and outlets in 1994 reached US$ 600,000. El Ceibo, - a federation of 37 cooperatives with about 900 farmer members and 100 employees - has attracted attention for its integrated approach which has built its international commercial activity onto a social and organisational system based on traditional practices including equitable distribution of earnings, "consensus building" assemblies, respect for reciprocal obligations. The marketing has effectively targeted 'niche' and specialist segments of the market, namely the ethical and organic sectors⁽²³⁾.
   
   
2. Kuapa Kokoo is the only farmer owned and run company in Ghana since the liberalisation of the internal market for cocoa in 1993. It was set up and is run with the assistance of Twin Trading. After three years in operation, with around 5,000 farmers and trading 4,000 metric tonnes of export grade cocoa per harvest, it has overcome much prejudice experienced in the early period as a farmer oriented operation and is recognised as the number one of the highest performing cocoa trading companies in Ghana (except volume) when compared with the other licensed cocoa companies. Kuapa Kokoo is profitable, is paying healthy bonus to members and delivers excellent quality cocoa. Its has an effective operational system based on 'just-in-time' and village level co-operation, operational control and trust, with a rapid turnaround and use of capital (the largest cost of business in Ghana with interest rates at 45%). Its loan repayment record is second to none in the sector. Other companies in the sector are gradually being obliged to re-organise and upgrade their treatment of farmers in the rural areas⁽²⁴⁾.
   
   
3. Cafedirect is the UK's leading fair traded coffee brand, now available in most retail outlets throughout the country. Cafedirect not only guarantees to its suppliers that it will never 'follow the market down' below a floor price level (126$ per pound - based on earlier International Coffee Organisation assessments and the Max Havelaar baseline criteria) but also pays a standard 10% premium on top of the market price. In mid-1992 with green coffee prices at 50 cents/lb cafedirect did not flinch from its bottom line policy and consumers continued to support the newcomer on the shelves. . Prior to the launch of Cafedirect in 1991, the conventional market wisdom indicated that there was little, if any "market share" to be obtained by any other method than "purchasing it": this means the merger or acquisition (and revamping of) an existing brand. In the performance conscious environment of the mainstream market for fast moving consumer goods (FMCGs) Cafedirect, now with a 3% market share in the smaller but significant roast and ground market, has challenged the common wisdom, quite possibly irrevocably. In particular, this has been done by offering a product of impeccable quality credentials and a clear "raison d'tre" way beyond the normal product selling propositions. Sales of the product and market research indicate that consumers are not immune to 'non-conventional' product related propositions and that cafedirect may have precipitated a tangible "crossover" in purchasing interests - from the often registered ethical "intent" to the actual purchase, made in a conscious and reasoned stances way. What all of the fair trade initiatives have shown - with their capture of 2-5% of market share - is that even minor shifts in consumer purchasing power register high on the 'Richter scale' of corporate management priorities and things to watch. There is absolutely no reason to believe that this trend - and thus mainstream companies' interest in addressing the "threat" or the "opportunity of fair trade markets - will diminish as long as non-governmental and campaign organisations continue their efforts to reach and articulate issues of concern to consumers - whether on the human and enviromental costs of farming or on "clean clothes - and consumers continue to find them credible⁽²⁵⁾.

Corporations do risk a general lessening of their credibility because of commercial and industrial accidents, errors of communication and consumers have experienced directly and indirectly greater economic uncertainty at the hands companies engaged in dounwsizing and streamlining exercises. Fair trade - as a complementary variant on the environmental cradle-to-grave approach - is increasingly positioning itself as one of the few solutions to the apparently profound "corruption" in the trading chains, where profit is put before people at all levels. It is interesting then to notice the audible and strong echoes of the FTMO concept in the following May 1996 statement (author's emphasis added) from a major UK retailing chain:

We buy our fresh beef from a strictly limited number of approved suppliers in the UK and Ireland. We work in partnership with these suppliers and the farmers to ensure the safety and quality of [our] beef and are therefore able to keep track of all stages and links in the production chain⁽²⁶⁾. However, BSE - so-called mad-cow disease - the subject of this leaflet and the need for a reassuring consumer message, is only the latest in a long line of trading and production systems which have failed with a direct and discernible impact on people: non-tamper-proof Tylenol tablets, HIV contaminated blood products, poor supervision of building regulations et al. At any scale and for most economic sectors, it is certainly necessary to question whether legislation is a part of the equation of future success in fair trade. The World Trade Organisation rules, for example, opposes regulation that judges the quality of a product by the way in which it has been produced. The major thrust of opposition to this approach has been premised on its environmental implications. However, the social justice dimensions of this approach are also critical, since it currently forbids countries from banning the imports of goods that, for example, are produced using labour in highly exploitative conditions. Similarly, it is not impossible to see a place for the operational norms and principles of fair trade as an integral part of conventional business quality standards and quality management practices, such as those set by the International Standards Organisation. Fair trade practice and initiatives are feeding directly into this wider lobbying process.

" Alternative trade can be viewed as a flea on the hide of an elephant, a tiny presence capable of making its giant host sit up and take notice... The alternative trade movement, by grappling with what conditions should make up "fair trade labels" can help movements of workers, environmentalists and others trying to define new labour and environmental parameters in trade agreements."⁽²⁷⁾

Concluding Remarks

'Fair trade' is a description of an experience and multiple interlocking efforts by a number of organisations who produce, who trade and distribute, who promote and want to shape the way trade is done in practice. In tackling a range of both traditional and non-traditional commodities, constantly developing new insights into sustainable production and marketing and in this way it challenges the ideology of 'free trade', where costs and benefits are narrowly defined and seldom include the wider issues of welfare, mutual benefit and the 'common good'. Success beyond the small-scale of the current movement will not arise only by adding more 'fairly traded' products to the shopping baskets of consumers around the globe - simply by increasing market share in the traditional sense. But, growing market share will certainly mean that the mainstream market will continue to pay attention and watch its own practices with care. The original alternative traders have an important role as the "compass" - the "true north" for the movement as it expands. Larger scale success will depend on other developments, including greater synergy through the various strands of the fair trade movement and the continuing and honourable uptake of the method and goals by mainstream corporate business. Quantitative change is, however, required for these forms of qualitative trading and innovation to be converted into effective challenges to the dominant inequitable and environmentally destructive trading patterns.

References

Barratt Brown, M. (1993) Fair Trade, Zed Books, London IFAT (1993), Code of Practice, IFAT, Manila

MacGillivray, A. and S. Zadek (1995) Accounting for Change: Indicators for Sustainable Development, New Economics Foundation, London

The Body Shop (1996), The Body Shop Social Statement 1995, The Body Shop, Littlehampton

Traidcraft (1994), Traidcraft Social Audit 1993/94, Traidcraft, Gateshead Zadek, S. and P. Raynard (1995) "Accounting for Change: the Practice of Social Auditing", Accounting Forum, Autumn

Endnotes

1. The Mystery of Growth, The Economist, May 25th 1996, p16

2. Other useful documents include Fair Trade: Guide to Good Practice, produced in 1995 by Towns & Development, Bridge Framework Manual: An Explanation of the Fair Trade Programme of Oxfam UK and Ireland, February 1996 and Fair Trade: A Rough Guide for Business produced by Twin Trading in 1994, reprinted in 1996.

3. For example the Environmental Economics Department of UNEP now openly notes and rejects as inadequate otherwise classic economic indicators such as GNP for the tracking enviromental developments (ICO Conference 27/28 May 1996 on Coffee and the Environement).

4. The earliest ATOs in their modern form were Oxfam Trading (then Bridge) in the UK, and Fair Trade Organistie (or its predecessor) in the Netherlands.

5. The Foundation is named after the eponymous hero of a Dutch 19th century literary classic - a work of fiction in the mould of Robinson Crusoe which features a young man's realisation of the inevitableconditions for workers on the coffee plantations in the Dutch colonies of south-east Asia.

6. David Ransom, "The well-informed coffee drinker's directory", New Internationalist, September 1995

7. Gaining access to supermarket distribution is significant because the trend is away from local shops to large-scale retailing. In the UK four retailing companies (supermarkets) take almost 50p out of every ú1 spent on the purchase of groceries. Source: Roger Cowe, "Supermarket forces offer mixed blessings", The Guardian, April 13, 1996.

8. Transfair International in Some Basic Thoughts on the Future of Fair Trade Marking - working document 12.95/Version 1.2.

9. Consumer fact sheet issued by Nestle UK in June 1995 Title: Nestle does more good for coffee growers in the Third World than all the charity coffees put together. Version dated 9.3.1995

10. Sources: Twin Trading records and coffee trading staff

11. Sources for Mexico Section include: Cafetaleros. La Construccion de la autonomia. Cuadernos desarrollo de base 3, CNOC 1991; Twin Trading records; David Griswold "In Harmony with the Rainforest", cited in Lori Ann Thrupp Bittersweet Harvests for Global Supermarkets: Challenges in Latin America's Agricultural Export Boom World Resources Insitute, August 1995

12. The Ecumenical Development Cooperative Society, with its head quarters in Amersfoort, the Netherlands but with project and loan officers situated throughout Latin America, is an ethical bank that since the mid-1980s has made substantive supports to supplier organisations connected to the fair trade initiatives, as well as direct to the Northern counterparts. Other such banks include: Shared Interest and Mercury Provident (now Triodos) UK, Triodos and Hivos/Stichting Doen the Netherlands, RAFAD/IGS (Switzerland). The latter are part of a global network of ethical, environmental and anthroposophical banks (INAISE) supporting fair trade.

13. Sources for market access section: Twin Trading records, Jos Algra, Novotrade Consult b.v., The Netherlands, "Coffee the View from the Valley" by David Ransom, New Internationalist, September 1995.

14. David Ransom, What's Brewing? New Internationalist, September 1995. See also New Internationalist issue on Mexico, of January 1994 which includes reportage of a visit to small-scale coffee farmers in Chiapas.

15. Sources for this description include: Lessons from the Field II, Marketing Bio-diversity Products by Laura Tangley, Conservation International, Washington DC 1993; Author's conversations and correspondence with CI staff of Conservation Enterprises department (formerly Seed Ventures). See also: Sustainable Harvest and Marketing of Rain Forest Products, Island Press 1991 - a collection of conference papers from experts in ethno-botany, business development, conservation biology, sociology and other fields edited by Mark Plotkin and Lisa Famolare of CI in with the Asociacion Nacional para la Conservacion de la Naturaleza (ANCON).

16. Ben & Jerry's has been carrying out social assessments for eight years, and the first The Body Shop social audit published in 1996 covered 10 stakeholder groups, one of which was 'fair trade' suppliers.

17. Delegates to the Conference came from NGOs, progressive local authorities in Britain, continental Europe, Africa, Asia, Latin America and the Caribbean at the invitation of the Greater London Council to discuss and to conceptualise a new approach to trade and exchange between people of the North and the South and thereby to contribute to the initiation and launch of Twin Trading and the associated registered charity TWIN (Third World Information Network).

18. For example in a recently survey by the Co-operative Wholesale Service, 60% of those surveyed said that they would be willing to boycott a shop or product because of concern about environmental or social performance. Almost 80% then said that they felt that retailers and manufacturers should provide more information on environmental matters and ethical issues in order to help them make their purchases.

19. Presentation by Martin Kunz of TransFair International at IFAT Regional Conference, Oxford, May 1996 and positions of Transfair International in Some Basic Thoughts (op cit) and correspondence with the former General Secretary of Max Havelaar in May 1996.

20. The Independent 4.12.1995

21. (front page) The Sunday Telegraph, 21.01.1996.

22. Third World Trade And Technology Conference, Statement of Principles adopted at closing plenary, 22 February 1985, County Hall, London

23. Lori Ann Thrupp Bittersweet Harvests for Global Supermarkets (op cit) p124-125; Twin Trading market reports.

24. Max Havelaar, International Cocoa Register reports, Heini Conrad; TWIN Records.

25. For information on specific product or sector trade campaign reports available contact the following UK based organisations: World Development Movement, Oxfam, Christian Aid. Specifically referred to in this chapter are: Clothes Code (op cit - Bridge Framework Manual, Oxfam Fberuary 1996 and After the Prawn Rush by Kevin Blundell and Eileen Maybin, May 1996.

26. Safeway consumer leaflet - a guide to the facts about our own brand beef products.

27. John Cavanagh (with Richard Barnet), Global Dreams: Imperial Corporations and the New World Order,quoted in the Jakarta Post, December 1994.

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