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Playing fair with global commodities

How Canadian co-ops have aligned to protect small producers worldwide

Sept2014-F4-CoffeeCoops-147039760

The birth of Canadian cooperatives a century ago bears a striking resemblance to today’s fair trade movement in developing countries. Both are based on the principles of democracy, fairness and equality. So it is little wonder that co-ops in this country are enthusiastic supporters of fair trade producers in other countries.

Coffee was the first and is the most ubiquitous fair trade product in Canada. Whole-bean and ground fair trade coffees began showing up on Canadian shelves almost 20 years ago, but coffee has since been joined by about 30 other commodities including tea, bananas, olive oil, rice, sugar, wine and various beauty products. Globalization has brought great opportunities for producers in developed countries to sell their goods overseas. By contrast, weak economies in poorer nations – combined with a crowded commodity chain that reaps most of the profits – often leave farmers and producers with little to show for their efforts and scant opportunity to break free of poverty.

Fairtrade Canada’s role

Similar to grain cooperatives that took root in Canada early in the 20th century as Prairie farmers’ solution to their difficulties in receiving fair prices for their crops, the fair trade movement is based on a desire to empower small-scale farmers in developing countries by boosting income for employers and employees. That, in turn, leads to improved services and living conditions. Fair trade also streamlines the distribution process between producer and consumer by reducing the number of intermediaries and brokers in the export chain. According to Foreign Affairs, Trade and Development Canada, more than one million families in about 50 developing countries are currently benefiting from fair trade practices.

Fairtrade Canada, a national not-for-profit organization, is the only Canadian member of Fairtrade International, which coordinates fair trade labelling and certification around the world. Fairtrade Canada is responsible for certification, licensing and promotion of fair trade products in this country. Certification ensures fair prices are paid to farmer and worker organizations, working conditions are monitored regularly and the environment is protected, says Marika Escaravage, Fairtrade Canada public affairs and communications specialist. To ensure producers and workers are fairly compensated, they are paid what is called the Fairtrade Premium, Escaravage says.

According to Foreign Affairs, Trade and Development Canada, more than one million families in about 50 developing countries are currently benefiting from fair trade practices

“The Fairtrade Premium is an amount that is paid in addition to the Fairtrade Minimum Price, or market price if this is higher,” she says. “Cooperative members decide democratically how to invest this premium to improve their community
and business. This can take the form of infrastructure projects or investments in health care and education, among others. Fairtrade firmly believes that farmers and workers are best placed to assess their own obstacles and needs. That’s why Fairtrade International is the only fair trade certification to have stakeholders from producer communities with a 50 per cent voice in its general assembly, the main decision-making body.”

Sharing principles and values

Several Canadian cooperatives, including credit unions, are active in the fair trade movement. For example, Winnipeg-based Assiniboine Credit Union ($3.9 billion in assets, 131,350 members) is a major supporter of and participant in the Manitoba Council for International Co-operation’s (MCIC) annual Fair Trade Challenge, a one-month program during which Manitobans are encouraged to buy fair trade coffee, tea and chocolate.

Fair trade involvement by Assiniboine goes even further. It provides fair trade coffee and tea in its head office and most of its 22 branches and looks for fairly traded products when purchasing items for promotional purposes. “Assiniboine supports fair trade by educating and activating our staff and our members,” says Randa Stewart, vice president, marketing and communications. “We make sure that people are aware of the fair trade movement and the positive impact of purchasing fairly traded products.”

Zack Gross, outreach coordinator for the MCIC organization Fair Trade Manitoba, says it is working toward securing a fair trade city designation for Winnipeg in 2015 and Assiniboine is on board as a supporter. Should it win its fair trade designation, Winnipeg will join 19 other communities in Canada that meet specific criteria.

Local council must pass a resolution supporting fair trade and agree to serve fair trade tea and coffee at its meetings and in its offices. As well, at least two fair trade products must be available in area shops and cafés. Fair trade communities must also aim for a target number of fair trade retail outlets based on population. They must demonstrate that fair trade products are used at a range of worksites and community organizations, such as places of worship and schools. Towns with the designation furthermore encourage media campaigns and popular support for fair trade. Finally, a local fair trade steering group must be convened to ensure continued commitment to its Fair Trade Town status.

Assiniboine credit union has also made a significant financial contribution to the Canadian Museum for Human Rights, opening in Winnipeg on September 20.

“Fair trade and ethical purchasing is important to Assiniboine because the principles and the values those things are built on align perfectly with our values as a financial co-op,” Stewart says. “Our mission is to provide financial services for the betterment of our members, our communities and our employees, so they fit very well together. Even though our operations are local, we understand we have global impact and we’re part of a bigger global community.”

‘Hope for a better future’

One of the first Canadian cooperatives to get involved in the fair trade movement was Just Us! Coffee Roasters Co-op in Wolfville, Nova Scotia (Canada’s first Fair Trade Town), which in 1995 became North America’s first certified fair trade coffee roaster. Just Us! co-founder Jeff Moore heard about a cooperative of small coffee producers in the Chiapas region of Mexico and decided to see it for himself. He arrived in the midst of a civil war “basically being fought over coffee,” he says. Moore visited the Mayan mountain village of San Pedro, high above the conflict, and met Antonio, an organic coffee farmer and member of the cooperative. “When Antonio concluded [our conversation] with, ‘This is the first time we have had hope for a better future for our families and communities,’ I knew I had to do something,” Moore says. Back in Nova Scotia, Moore, his wife Debra and three friends started Just Us! as a cooperative, inspired by their Mexican partners.

coffee and fair trade co-ops

“Twenty years ago, the ideas of fair trade and organic were little known or understood, but with our fresh roasted coffee and our pioneering values, we just took off,” Moore says.

“A key supporter from the beginning was Co-op Atlantic (the second-largest cooperative wholesaler in Canada) and when we quickly grew beyond the comfort zone of our original banker and they decided to pull the plug on us, it was Nova Scotia’s Valley Credit Union ($140 million in assets, 12,000-plus members) which miraculously came to our rescue, even though at the time they didn’t do small- business loans.”

Valley Credit Union followed its cooperative principles when it decided to back Just Us! Coffee Roasters, says sales and marketing manager Catharine Herber. “In 1995, Valley Credit Union had recently gone through an amalgamation of several credit unions and still was in the inaugural stages,” Herber says. “Valley Credit Union recognized the potential of Just Us! Coffee Roasters and the financial management skills of Jeff and Debra Moore bringing strength to their business model.”

The credit union difference

Herber emphasizes a difference between credit unions and banks when backing small companies such as Just Us! Coffee Roasters Co-op. “Other financial institutions have relied upon analytical tools to review business financing requests. Our philosophy is getting to know people and not just financial statements,” Herber says. “It’s quite simple; we take time to understand small businesses and their goals and our ability to structure loans and repayment in a non-traditional manner to suit specific needs and situations. We genuinely believe in small groups and their ability to have large impacts and Just Us! Coffee Roasters’ revolutionary business model of fair trade aligned with our own beliefs of ‘doing the right thing.’ Therefore, the decision to assist with funding came quite easily.”

As the fair trade movement has grown and become more successful, Moore says, it has attracted multinationals, larger producers, plantations and middlemen. In response, small-scale producers have attempted to differentiate themselves with the launch of the Small Producers’ Symbol (Simbolo de Pequeños Productores, or SPP). “It is fairly new, but is already being adopted by Just Us! and many of the pioneering fair trade roasters in North America and Europe,” Moore says. “It can be used alongside other fair trade certifications or on its own.”

Another Canadian co-op that is helping to improve people’s lives far outside Canada’s borders is Planet Bean Coffee in Guelph, Ontario. One of Planet Bean’s sources is Cafe Femenino, a cooperative composed of women in the Andes Mountains of Peru who grow organic, fair trade certified coffee. The women of Cafe Femenino use part of their profits
for community projects, says Planet Bean founder Bill Barrett, and have a goal to reach women all over the world. To that end, Planet Bean supplies Cafe Femenino coffee free of charge to Guelph women’s shelters through Guelph Wellington Women in Crisis.

Training and assistance

It is not uncommon for Canadian co-ops to offer training and assistance to co-ops in developing countries. For example, Planet Bean is endeavouring to make it possible for workers of the Li Maya co-op in Mexico to establish their own coffee roastery. The 186 member families of the co-op in the Chiapas region recently acquired a coffee roaster but lack the skills to launch a wholesale coffee roasting business.

After visiting Li Maya, Planet Bean production manager Elijah Lederman launched in June a crowdfunding campaign at Indiegogo.com to raise $5,000 to enable Li Maya representatives to travel to Guelph to learn how to roast, brew, market and sell their coffee back home in Mexico. “When Elijah visited the farmer co-op in Mexico and saw the opportunity for them to get into the local coffee market, we put our heads together to figure out how we could get them started and keep them going,” Barrett says. “One of the ideas that guide co-ops is that they should work with other co-ops in building a people- centred economy. We purchase all of our coffee from farmer co-ops and try to do as much of our other business in the co-op sector as well.”

“I’ve seen first-hand the differences we can make”

—Randa Stewart, VP marketing and communications, Assiniboine Credit Union

Meanwhile, Canadian taxpayers are assisting the creation of a cooperative of small farmers in Colombia. This past June, the Canadian Cooperative Association (CCA), on behalf of Foreign Affairs, Trade and Development Canada and the Cooperative Development Foundation of Canada, launched a five-year, $15.3 million project that will make it easier for 17,500 small-scale Colombian farmers to sell their products, including cacao, coffee, fruits and vegetables.

The project will put farmers into legal cooperatives and give them marketing, tech- nical and management training, according to the CCA. “Cooperative enterprises can help farmers achieve together what they are unable to do in isolation,” says CCA executive director Jo-Anne Ferguson.

A way of establishing peace

The Colombian government sees rural associations of farmers as a way to establish lasting peace in areas that have seen decades of armed conflict, and the CCA is helping to transition the farmer associations into registered cooperatives. “Through cooperatives, communities re-learn how to cooperate and function in a democratic manner that harnesses collective action, rebuilds the social fabric and creates economic prosperity,” Ferguson says. “This is critical in communities that are coming out of recent conflict, as in Colombia.”

Consumers in Canada can take comfort in knowing the premium they pay for fair trade co-op products is giving a boost to people’s lives thousands of miles away. yet Canadian co-ops feel a pinch by aligning with fair trade businesses. “Financially, fair trade does put a strain on us,” says Just Us! communications director Kathy Day. “There is no denying that certification is an expense and keeping up direct, authentic relationships with other fair trade co-ops is also costly.”
But Day says the extra costs are necessary to remain true to Just Us! Coffee Roasters’ founding principle: People and the Planet Before Profits™.

Assiniboine Credit Union’s Randa Stewart says anyone, anywhere, can lend a hand toward curing the world’s ills – and supporting fair trade is one way to go about it. “The world’s economic, social and environmental challenges are all people- made, and if they’re all people-made then people are the solution, so all of us have a role to play,” Stewart says. “I’ve seen first-hand the differences we can make, whether it’s providing grants to micro or small enterprises or working with community organizations that are helping to break the cycle of poverty by providing access to affordable financial services and providing money-management training. We are absolutely committed to making a difference in the world.”◊