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240. FTUSA’s Independent Smallholders Standard: The empowerment agenda

Opponents of FTUSA’s Fair Trade for All initiative have focused in their public communications on the participation of coffee estates in the U.S. Fair Trade market, and characterized their resistance as a stand for smallholders.  They have mostly ignored the fact that FT4All also opens the door to independent smallholder farmers.  On the rare occasions when this aspect of FT4All has been addressed publicly, it has generally been by people who oppose it.

Equal Exchange, one of FT4All’s leading opponents, last week argued against the participation of independent smallholder farmers in the U.S. market during an online forum.  Cooperative leader Merling Preza, another vocal FT4All opponent, suggested it will undermine incentives for smallholder farmers to organize and weaken the cooperative model.  Both questioned the idea that it could lead to real farmer empowerment.

But FTUSA suggests in its Independent Smallholders Standard (ISS) that its central goal is to help independent smallholder farmers “organize as a path to empowerment.”  More important than what the ISF Standard says is what it proposes to do: create real incentives for smallholder farmers to organize in ways that may move them closer to the cooperative model than perhaps critics have suspected.

The Standard frames a long-term vision of farmer empowerment that involves the gradual and collaborative development of smallholder farmer organizational capacity over a period of six years.  That process begins modestly, with a pretty short list of minimum requirements for independent smallholders to qualify for certification, and some initial steps  at collective action for community development and social organization facilitated by Market Access Partners.

Specifically, the Standard calls for Market Access Partners and groups of previously unaffiliated smallholder farmers to work together to conduct community-wide consultations to help identify the needs the community considers most urgent (Needs Assessment, section EM-DM 2), develop strategies to address those needs (Fair Trade Plan, section EM-DM 3), and form a democratically elected body to administer the Fair Trade Premium in service of that strategy (Fair Trade Committee, section EM-PTA 1-4).

(Yes, there are lots of acronyms.  Download the Periodic Table of the Acronyms to aid in the digestion of the Standard.)

Over time, these organizational efforts take on more complexity as farmers move down the road to commercial independence and true empowerment.  These include the establishment of one or more Administrative Organizations that could perform the functions or deliver the services that are commonly conferred on committees in the context of formal cooperative structures.  They also include the establishment of an Internal Control System (ICS, ES-MS 4) – a farmer-managed process that is generally associated with ensuring compliance with the terms of organic group certifications, but also serves as an important channel for the flow of information and market intelligence both downstream (from farm to market) and upstream (market to farm) that is a critical component of smallholder competitiveness.

Perhaps the most interesting aspect of the Standard’s design is the financial incentive it creates for organization.  The ISS, like the organic certification process, refers to an initial three-year compliance interval.  Unlike the organic certification process, in which farmers must fully adopt organic practices on the farm from day one but don’t qualify for certification premiums in the marketplace until three years of audits have been successfully completed, the ISS promises premiums from day one.  The long wait for market premiums in the organic transition process, combined with productivity declines that can be steep, creates a financial disincentive for cash-strapped smallholder farmers to complete the course.  This has been especially true in the current context of high prices, as farmers have not wanted to risk the promise of high returns on conventional coffees now for the promise of organic premiums three years from now.

The ISF Standard does the opposite, mitigating the risk of farmer organization with financial incentives.  Once a farmer passes the initial audit, her coffee is eligible to be sold under the Fair Trade Certified mark.  More importantly, she and the other Registered Farmers in her community earn both the Fair Trade Price and Fair Trade Premium on the sale of that certified coffee.  In areas where cooperatives are scarce and farmers have not had sufficient incentives to organize for the market, the financial incentives provided under the ISS may help farmers overcome their reluctance to act collectively, which FT4All’s critics and advocates alike agree is the source of real farmer empowerment at origin.

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Read other posts related to the FTUSA Independent Smallholders Standard.

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