Fair Trade Labels Ensure Returns For Farmers

KANDY, SRI LANKA - Organic farmers in this hilly, central region of Sri Lanka are convinced that they have a simple fair trade model that could be replicated in other parts of the world."What we have created is the most sustainable model of fair trade and organic food in the world,'' insists Sarath Ranaweera, founder of the Small Organic Farmers Association (SOFA), speaking with IPS.

'Fair trade' international trading partnerships help disadvantaged producers, farmers and farmers' societies to get better prices for their products, while ensuring quality and environment-friendly products. They bring suppliers (farmers/producers), traders (exporters and retailers) and consumers together in an equitable partnership where the consumer pays a premium for the product and part of the premium goes back to the farmer/producer for his social welfare and uplift.

Last month SOFA received a fillip when the Fairtrade Labelling Organisation (FLO), a leading standard setting and certification organisation approved it as a model of good practices. "SOFA is a great model that we could use to replicate in the rest of the world," said Christophe Alliot, deputy director of France's Max Havelaar, the French member of FLO, after a field visit.

Products that carry the fairtrade certification guarantee that producers in the developing world get a better deal, according to Alliot.

Alliot and two of his colleagues from FLO partners in New Zealand and Britain were in Sri Lanka attending a two-day meeting of the NAP (Network of Asian Producers), a grouping formed two years ago under the FLO umbrella to provide a voice for Asian producers. During the Sri Lankan visit, the FLO team decided to visit Ranaweera's project in the hills and was astounded with the model.

"Its is quite amazing how these farmers have combined biodiversity and organic food production," said Alliot in the backdrop of efforts by FLO to look for a sustainable model that would convince doubtful consumers that producers are actually benefiting from the premium price.

In fact, Ranaweera, whose SOFA initiative follows his own entry into the production and marketing of organic food through his company Bio Foods (Pvt) Ltd, is an acknowledged expert in fair trade and travels around the world talking with consumers and convincing them that producers benefit from FLO.

"Fairtrade wants to use our model as the organisation is under attack in the rest of the world. I am constantly being asked to speak to consumers on how fair trade benefits farmers. Consumers, at international gatherings, ask us to show proof that the money (premium) is actually going to producers," said Ranaweera, who has degrees in food science and technology, and agriculture in addition to experience as an international consultant in tea processing and research.

FLO, he said, was planning to send a team to work with a group of undergraduates from the University of Peradeniya in Kandy to formulate a workable model based on the SOFA initiative.

W.R. Punchibanda, 64, is a typical hill farmer who grows tea, coffee and spices on his sloping 2.5 acre land but earned little till SOFA came along. "Around 1980 I would pluck some tea leaves from the garden and sell it to the local shop for a few Sri Lankan cents per kilo to buy bread or some food. In a month, we would get about Rupees 50 (four US cents) from tea," he said, seated in his simple brick house surrounded by a rich assortment of shrub jungle, fruit trees and vegetation -- and leeches on rainy days.

But when Ranaweera came along and sold the concept of SOFA to farmers in Kandy and adjoining districts in 1998, Punchibanda -- now the president of a SOFA affiliate -- saw his tea earnings rise to rupees 2,000-2,500 (22 dollars) per month. "That's not all; SOFA has done a lot of welfare work (using the Fairtrade premium) looking after members and their families and taking care of the community."

Ranaweera argues against the common fair trade practice of getting producers to double as marketers so as to get the best possible price and shut out the middle man. "Our model has proved that producers need not be bothered with selling and marketing, as long as they are guaranteed a price and assured markets."

SOFA, with more than 2,000 farmers and some 30,000 dependants in the production chain, is the first ever Fairtrade association of spice producers and touted as the most sustainable farmers' organisation because it gets the Fairtrade premium direct to its coffers. Tea, for example, receives a premium of one Euro per kilo in the price tag if sold in Europe and this money goes straight to the producer.

"Our model is simple and sustainable. Our company takes care of the marketing and quality certification, while the producer (farmer) gets a minimum guaranteed price set by SOFA. The farmer need not worry about marketing or quality certification; he has his buyer and assured price," said Ranaweera. Bio Foods spends millions of rupees every year on quality certification for Fairtrade labels (carried on every pack) and other requirements.

''Small farmers involved in organic food production don't have resources to prove it by certification which is costly. We try to help them by reducing the certification fees (to qualify for Fairtrade labelling) or partly fund them,'' said Alliot.

Ranaweera, who created the SOFA model and is constantly helping farmers to improve their price, quality and standards, and ensure what he calls a living wage, believes empowering farmers at the village level is the future for countries like Sri Lanka. "There is no use of urban development if village communities are not empowered. The fruits of development must start from the village and move upwards rather than trickle-down,'' the Sri Lankan scientist who wants to dedicate himself to helping small farmers and village communities noted.

Rangit Gunasekera, chairman of FLO's Sri Lanka consultative body, describes Ranaweera as an amazing personality. "He has spoken and practiced fair trade much before anyone else in the world. He started his campaign in 1993 and the SOFA model is now unmatchable." Sri Lanka was the first Asian producer to embrace fair trade many years ago and has the highest number of Fairtrade members (21) in Asia after India with 57 members, while Thailand is at third place with 13 members.

SOFA members pay a subscription of Rupees10 ( cents) per month for the upkeep of the organisation, and this revenue plus the per kilo premium it gets from Fairtrade labelling, help to develop the farmers and their community.

FLO International, an umbrella organisation, was launched in 1997 to set standards and to support, inspect, certify disadvantaged producers and harmonise the Fairtrade message across the movement. Currently there are over 20 labelling initiatives -- all members of FLO International. There are now Fairtrade certification labels on dozens of different products based on FLO's certification for coffee, tea, rice, bananas, mangoes, cocoa, cotton, sugar, honey, fruit juices, nuts, fresh fruit, quinoa, herbs, spices and wine.

(c) 2007 Inter Press Service

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