Day 13 – The Fair Trade Story

Day 13 – The Fair Trade Story

ftusa On the other side of the value chain is the story of Fair Trade. Fair Trade quinoa comes with guarantees that producers are paid a fair price for their product, receive technical assistance, social development funds for community use and long term contracts with buyers. Fair Trade targets marginalized producers offering an extra level of protection by establishing a base price guarantee to farmers, regardless of market prices. Quinoa sold with this Fair Trade certification has a wholesale price that is slightly higher than non-Fair Trade quinoa. This difference represents the money going towards the social development of the producers through farmer-directed education and infrastructure investment.

Bolivia’s quinoa is produced by what once was Bolivia’s most disadvantaged producers; farmers and miners from the salty, dessert flats of the windswept altiplano where temperatures regularly go below freezing and people live in cold, adobe homes with thatched roofs and little access to electricity or clean water. The Bolivian president, Evo Morales, is from this region, and with new government programs addressing the poverty of the countryside, quinoa farmers now have more access to electricity, telephone service, medical attention and schools. In the past seven years with the growth of the quinoa market, for the first time quinoa farmers are entering into the middle class, building small houses in the city and buying trucks for transportation services. Because of quinoa’s growth and value, the need for Fair Trade protections was largely overlooked by the Bolivian farmers. But now with the severe drop in the price of quinoa due to new competition from other countries, the farmers are more aware of the importance of Fair Trade guarantees, explains Sergio Nunez de Arce.

b corpNunez de Arce is a Bolivian social venture capitalist who recognized the market potential for quinoa and founded Andean Naturals, a B Corp., in San Francisco, California in 2004. Andean Naturals is now the world’s largest buyer and seller of Fair Trade quinoa. Andean Naturals also has their own brand that they sell directly to consumers.

Nunez works closely with FairTrade USA, a Fair Trade certifier that specializes in working with large corporations such as Wal Mart, Pepsi Co., Hershey, and Kellogg to bring Fair Trade brands to the consumer market. Some say FairTrade USA’s approach is controversial because they make Fair Trade accessible to large corporations with histories of human rights and environmental abuses which is exactly what Fair Trade protects against. Critics say that the large corporations are using Fair Trade brands as a way of “greenwashing” their image and appearing more socially responsible then they actually are. Some believe this contradiction erodes consumer confidence in the Fair Trade certification. Never-the-less, large wholesale-retailers such as Pepsi Co. can absorb the extra cost of the Fair Trade premium and still be competitive with their products by being both the distributor and retailer. In addition, by being customers of Fair Trade, these companies bring a tremendous amount if hope and advantage to traditionally marginalized people and help open new markets and opportunities.

The quinoa that Andean Naturals distributes comes from its sister company in Bolivia, Jachi Inti Industrial SA (JISA), which has 139 members producing certified organic quinoa and 46% who are also certified Fair Trade. According Yeris Peric, General Manager of Andean Family Farmers, the production branch of Andean Naturals, an average of 20 to 25 containers (more than 400 tons) of organic quinoa a month is exported, mostly to the US. Andean Natural’s JISA processing plant in Bolivia is safety certified and employs 170 people, processing, explained Nunez, not only the Fair Trade Andean Naturals quinoa but that of other certified organic organizations as well, such as ANPQUI. In total, 500 tons of Fair Trade quinoa was distributed by Andean Naturals in 2014.

Besides paying fair market prices, and employing Bolivians in the processing plant, Andean Naturals also contributes to a social premium fund managed by an elected group of producers. Last year Andean Naturals paid $269 per ton in social premiums contributing a total of $134,500 to social development programs. As the quinoa market matures, price protections and Fair Trade branding become more important. Nunez explains that Bolivian quinoa’s world market advantage is its organic certification, heirloom varieties, high quality production, and strong partners. Farmers who six years ago earned $35 a month for their quinoa are now earning $400 to $600 a month with Andean Naturals. Nunez looks forward to expanding the Fair Trade quinoa program and continuing to help alleviate poverty and use natural resources sustainably.

More about Fair Trade quinoa is coming as studies with Fair Trade farmers begin the end of July…