| | |  Business News | October 2009 
Fair Trade Will Become Major Trend, Say Mexico Growers
 Emilio Godoy - Inter Press Service
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October 12, 2009
| | Fair trade initiatives have enabled farmers to boost their income, position their products better in markets, and improve organisational, social relations and business skills | |
Mexico City - Thanks to fair trade, Jorge Cetz - a lemon and mango grower from the southeastern Mexican state of Campeche - has gained access to markets and organised his cooperative better. But in order to enhance results under this form of sustainable production and alternative marketing, more support is needed, he said.
"There are fewer middlemen, so your products can reach consumers directly," the farmer told IPS. His cooperative, Lu'um Meyaj - which means 'We Work the Land' in Mayan - invested some 1,600 dollars towards obtaining fair trade certification for its products.
Despite good prospects for sales in global markets in 2010, Mexico’s organic and fair trade producers still face a major challenge: boosting the sector’s domestic market, which has been hit hard by the global economic meltdown.
"We need to make consumers see that fair trade is an alternative to prevent crises," Mauricio Alquiciras, market development director of Comercio Justo (CJ), a local citizen group that promotes fair trade, told IPS.
Comercio Justo was created a decade ago with the aim of promoting fair trade practices in Mexico, and is currently made up of some ten organisations of small-scale growers, from the southern states of Oaxaca, Chiapas and Puebla, as well as Michoacán in the northwest. They represent around 20,000 families in all, and produce a range of commodities, including coffee, honey, mangoes, lemons, passion fruit and sesame.
The group projects that the fair trade sector will grow two- or even three-fold in 2010. But estimates by Agromercados, a company that promotes fair trade goods, are much more modest, forecasting seven percent growth. This year the sector will see a five percent increase.
"Prevailing conditions are determining that fair trade will become a major trend. It’s inevitable, as conventional production options will be exhausted and will leave no other option," Rodrigo Díaz, representative of Agromercados, which markets the "Fértil" coffee brand, told IPS.
In Mexico, the adoption of fair trade practices was prompted primarily by the critical situation faced by small farmers, affected by lack of access to markets, low prices for their products, volatile commodity markets, predominance of the middleman throughout the entire chain of supply, and market control by transnational corporations.
Fair trade initiatives have enabled farmers to boost their income, position their products better in markets, and improve organisational, social relations and business skills.
"Mexico has the most dynamic fair trade sector in all of Latin America," Joaquín Muñoz, director of the French chapter of the Max Havelaar Foundation, an international fair trade certifier headquartered in the Netherlands, told IPS.
Precisely with the aim of furthering this practice and networking, Mexican producers and traders organised the First National Forum on Fair Trade and Organic Production, held Sept. 29 through Oct. 1.
Some 1,500 farmers, craft makers, organic and natural food and beverage producers, along with academics, grassroots leaders, environmental activists, and prominent figures from both Mexico and abroad, responded to the call of CJ, Agromercados and other local organisations to discuss the state of the fair trade movement and find ways to bolster it.
Key questions were raised, including, can fair trade transcend its current marginal position to become the dominant system of production and exchange?; can organic and fair trade products grow enough to reach mainstream consumers in Mexico?; and can fair trade organisations diversify from the production of export commodities to the manufacture of end products?
But participants also addressed recent criticism that sees fair trade more as a marketing initiative than a new model for economic justice.
Does this movement merely serve to perpetuate unfair trade practices inherent to the neoliberal model by providing large corporations with a gimmick to improve their image and placate socially and environmentally conscious producers and consumers? Or is it really the seed of a new, more just and equitable, solidarity-based society?
Participants unanimously sided with the second option, hailing fair trade as a viable and necessary alternative, and in that sense they agreed on the need to expand the movement and integrate all of the country’s fair trade initiatives to form a national common front.
Mexico has a long tradition of organic farming and fair trade practices.
In 1967, Finca Irlanda, a coffee plantation in the southern state of Chiapas, was awarded the world’s first organic coffee production certification, through the German certifier Demeter Bund.
The country can also be seen as having spearheaded efforts in fair trade practices.
In 1973, Max Havelaar founder Frans van der Hoff, a Dutch missionary with studies in political economy who had been working with the poor in the Santiago slums, moved from Chile to Mexico following the military coup that toppled the democratic government of socialist president Salvador Allende.
Almost a decade after his arrival, van der Hoff and a group of peasant farmers began to change traditional coffee trading practices in the state of Oaxaca, eliminating the middlemen and obtaining more money for each kilogram sold.
This marked the beginning of fair trade in Mexico.
In 1985, van der Hoff came into contact with fellow countryman Nico Roozen, an economist and activist who worked with the Dutch development agency Solidaridad.
Together they created the fair trade label "Max Havelaar", a name taken from the title of a nineteenth century novel by Dutch writer Eduard Dekker (1820-1887), about a man who defended the rights of indigenous people in the Dutch East Indies (present-day Indonesia) and battled colonial practices.
This label spawned a host of fair trade seals, certifications, labels and sets of standards.
Over the past ten years, 17 fair trade labels were created, 14 of them in Europe, and the other three in Canada, the United States and Japan.
In 1997, Fairtrade Labelling Organisations International (FLO) was formed as a global umbrella group of organisations that grant fair trade certifications. Based in Bonn, the FLO currently has 24 member organisations from 23 countries, sets international fair trade standards that apply both to producers and marketing companies, and grants 19 different certifications through its members.
Max Havelaar buys coffee, honey, cocoa beans and fruit marmalades from Mexican producers, and markets them in Europe. In France, coffee represents a third of the country’s fair trade market, which moves 300 million euros (477 million dollars).
Official figures indicate that there are some 120,000 fair trade farmers in Mexico, with around 400,000 hectares planted. The leading crops are coffee, honey and garden vegetables.
Although such practices bring in an annual 300 million dollars from exports, in 2009 official assistance for the sector amounted to barely 1.5 million dollars. But some government efforts have been made to support the sector.
In February 2006, the government passed the Organic Production Act that regulates this form of production and established the National Organic Production Council (CNPO), formed by government, producers, business and academic representatives.
One of the goals of this body is to create a national seal, similar to the one issued by the U.S. Department of Agriculture, which would be recognised both in Mexico and abroad.
"The government has to act smartly when promoting contacts between NGOs and other agencies," said Muñoz, who was one of the participants at the forum.
A possibility for expanding free trade is to incorporate domestic staples, such as corn, beans and nopales (an edible cactus native to Mexico).
"We need to foster the development of small farmer organisations. We also have to start working with basic grains," Alquiciras said.
The Fourth Study on Consumer Attitudes Towards Social Corporate Responsibility, conducted by the private consultancy firm Vivian Blair & Asociados in 2008, found that nine out of 10 Mexican consumers feel it’s important for companies to undertake socially-oriented actions, while four in 10 said they were willing to change brands and even stores to support a social initiative.
In the case of coffee, producers are guaranteed a minimum price and above that price they can earn an additional 10 to 20 percent as a social bonus and recognition of their products’ certification.
But the sector faces tough challenges, including expanding the market, achieving greater participation for small farmers, raising awareness among consumers, and securing increased government aid.
One of the main obstacles is Mexico’s demographics, as the country lacks a significant middle class, 20 million of its more than 107 million people live below the poverty line, and the daily minimum wage is only four dollars.
Meanwhile, fair trade continues to grow globally.
According to Fairtrade Foundation, the independent non-profit organisation that licenses use of the Fairtrade mark on products in the UK, "Despite the global recession, worldwide sales of Fair Trade Certified products grew by an impressive 22 percent in 2008," with international sales valued at almost three billion euros (4.38 billion dollars).
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