FairMatch Support

Fairtrade needs a review of the standards to support Amazonian collectors

2011-03-06T07:04:00.000-08:00

From '91-'96 I lived in Bolivia and was involved in the development of the first co-op in Riberalta for Amazonian nuts. The objective was to demolish the oligargy of a few existing processing units in the area that were setting the prices and the conditions for the whole sector.
The co-op organised collectors that went into the forest for months and started to trade their own nuts. At first they started toll-processing but after a while, with major support of the development industry, they started their own processing plant, "beneficiadora" and started trading kernels. First at the Alternative Trade market but later they introduced the organic amazonian nut as wel and got for both certification; organic and FLO.

When I left Bolivia they had a great future ahead with a variety of buyers in a range of countries. A couple of weeks ago I was back in the area after 15 years and visit the major actors in the Amazonian nut industry.

The changes where huge; instead of a limited number of 'beneficiadoras', there were 22 facilities. Three major ones not originated from the area with a clear business approach and with vision for investment in the region. Next to that there were a range of 19 other small and medium sized facilities. Competition is clearly around.

On the ground, the old baracca system, a system of modern slavery in which collectors left the season most of the time in debt to their buyers/suppliers had been almost demolished. The large consessions are split now and the land was given back to the communities. However, it is obvious the total setting is still in a transition and a variety of models occur currently.
Next to that there is no solution yet who is taking over the investment parts of the the owners of the baracas, the baraqueros, who were also keeping the roads open and did the maintenance of the bridges in the area.

In this setting the co-ops should have grown enormously. Unfortunately it became clear the growth of the co-op had come to a complete standstill. The only co-op with a beneficiadora had still only 150 members and had closed down their facility. Even with all the support coming from outside, with a specialized captive market, they were not able to survive.
Running a trading co-op is one, running business wise a processing facility turned out to be too complex in this moment.
The small other co-ops had to buy their stock and had to look for toll-processing. However they have to negotiate with the processors on prices and timing. The first is not too complex in a setting where there is enough capacity, the second however a serious bottleneck.
Processors would like to process their own nuts first for finance reasons, so the co-ops are always at the end of the line; which is increasing finance costs and harming reliability on delivery dates.

Currently far less than 1% of the production is ending up on the FT market where as the demand in the market is far higher. Private processors are interested but cannot play an active role in the setting due to the current FLO standards.

If the FLO standards would be open for 'farmgate' prices; 'farmers' co-ops could focus on organizing trade and link with professional processors that could supply at the agreed time and costs would diminish.

This would create more opportunities for more producers and that's what it should be all about. But the rules have to be changed first....

Loyalty; the new buzz word

2011-01-24T11:12:00.001-08:00

After some decades of focussing on codes and certification the new upcoming trend is on captivity of sources. The upcoming competition on sources for food does not favor the current codes and certification systems that just are setting conditions and requirements to access the western market. That period has gone because southern suppliers will sell to markets that are less complex and demanding.

We have to find new settings and work towards loyalty systems in the supply chains; create captive markets with mutual investments and integrate sustainability issues. Intrinsic improvement with lower auditing cost than currently.

Last week set up a number of pilots on loyalty in Western Africa.... already curious to the results at the end of the season....

Herman uit de Bosch

Inclusive supply chain development; key succes factors...

2011-01-24T10:19:00.000-08:00

Just back from a week in West Africa. There is a lot of discussion on how to improve supply chains, how to improve sustainability and it is always amazing how little is known on the key succes factors.

In the past couple of years more companies have become interested in captive supply chains and there is also a lot of interest from the NGO and funding agencies to get involved in economic development or supply chain development.
Companies are operating with the perspective that everything can be done by just making agreements and set the rules for supply... NGO and funding agencies by majority think in 'technical' partial solutions; you just link the actors or if the production is the problem; you just start planting trees, without questioning why the actors never co-operated before succesfully or the farmers did not plant themselves earlier,

It is our experience in the past, successes on supply chain development are hardly the technical solutions as such, the production improvement, the organizational issues or the certificatons to be the key factors for succes. These are merely necessary conditions to make it work.
The key succes factors is in the coaching and mediation that needs to be done when the supply chain starts moving for the first few times. The majority of the actors never worked with each other before and have to adjust their attitude towards each other. In spite of all written agreements in the preparation, every actor, from farmers to traders will go back to their traditional role in now time.

An essential part of our work is to mediate in conflicts in a very pro active way; monitore progress during the harvest in buying, analyze where improvement is needed and to be 24/7 available in case of conflict with the attitude to solve...

Problem is there are a very limited number of people who have the skills; who know where we have to move, speak the language of both the traders as well as the producers and are creative in solution finding...

In the preparation of the upcoming harvest in cashew we could already identify within the team the possible conflicts that wil definitely happen; farmers that just want to discuss prices, traders that have to start explaining their markets to their suppliers...
It was already obvious we are going to have an interesting harvest season in west Africa...

I'm already looking forward to it. Our team is ready! Lets move and more then 15.000 cashew producers connected. to african processors and finally to the retail...

Herman uit de Bosch

African Fairtrade cashew in 761 AH shops!

2010-10-21T07:03:00.000-07:00

From the 25th of October, after 3,5 year of work, 'our Fairtrade cashew' will be on the shelves of 761 Albert Heijn shops in The Netherlands. A serious milestone for all of us who have been involved in this process.

Africa is the major producer of cashew in the world. About 2.5 million farmers are involved in the production. Most of them small farmers. Unfortunately about 90% of the trade is exported raw to India and Vietnam to be processed there and re exported to the rest of the world. Farmers do not get good prices and the added value is not benefiting Africa.

That was the reason we decided about 3,5 years ago, jointly with the nut importer Global Trading, to organize farmers, link them to local processors and create a more direct linkage to the market. By using the Fairtrade seal farmers would have an incentive to team up.

After 1,5 years our work was noticed already and our efforts were taken into a major multinational project funded by both the private sector as well as donors like GTZ/Bill&Melinda gates Foundation and Dutch funding agencies like ICCO and HIVOS.

In the course of the past years about 15.000 farmers are organized now in various co-operatives. One in Burkina Faso, 2 in Ghana and 2 in Mozambique. Have of them are certified as well. In the course of the coming two years we plan to reach over 45.000 farmers.

Last year the first groups in Ghana were ready, but no market was found yet. Early this year, just before the season was starting in West Africa, an agreement was made between Albert Heijn, the roaster Intersnack and Global Trading and FairMatch Support for a first but major pilot.

The season was used to link 3 co-ops to local traders, local processors and finally linked to the end market. Easy on paper, but difficult in practise realizing neither of actors was used in collaborating with each other.

But they did and the result can be seen on the shelves in the coming months. A first but major step in the cashew industry; complete traceable cashew nuts, directly out of Africa with a fair benefit for all actors in the chain.

A successful pilot that will will be continued with the produce from Mozambique where the season for farmers is about to begin...

First Fairtrade Container has reached Rotterdam!

2010-09-19T00:55:00.000-07:00

After years of preparations, early September the first container of FairTrade cashew has reached the port of Rotterdam. In the coming months more will follow out of Africa and reach the shelves of the retailers.

In the past years a number of cashew farmers were organized in Ghana, Burkina Faso and Benin and they became Fairtrade certified. However no market was found yet.

Early this year some crucial actors; retailers, roasters, importers, processors and farmers decided to team up and make it finally happen. A major achievement in a sector where joint efforts are hardly existing. FairMatch Support has been stimulating this joint effort, within the African Cashew initiative, a public private project, funded by the Bill&Melinda Gates Foundation.

Creating this joint effort was a major achievement, but to make it happen turned out to be the major challenge in the end. The cashew market is a very archaic market and loyalty between farmers, buyers etc hardly exists. Especially processors, traders and farmers are very much opportunity oriented and at the start quite some side selling and buying took place. A lot of effort was put into keep all parties in line and a lot of mediation had to take place in price conflicts or denial of made agreements, especially upstream in the supply chain. It was clear, just creating the opportunity, organizing farmers, making the agreement was not enough. The major challenge was to keep them in line and to show them, staying in line would be more beneficial for them. The unexpected high prices in the harvest did not make it easier. Next to that some 'local issues' had to be tackles; Ivorian rebels did not allow the nuts to be exported to the processors...

But step by step the loyalty increased in the system volume that was collected was growing. We reached the agreed amount. More than 3500 farmers supplied the nuts and they will increase their cashew income with approximately 15%, and have created a new reliable outlet for their nuts.

With the lessons learned we will be ready for the next harvest, coming up in Mozambique in the coming months.

But first let us enjoy the new Fairtrade Cashew nuts, soon to be bought at the Albert Heijn shops in The Netherlands and probably other retailers as well.

Cashew, a beautiful nut with a story.

Mozambican cashew co-op certified

2010-03-07T05:00:00.000-08:00

After two years of preparations the Meucate Union with 2500 members in Northern Mozambique has been FLO certified at the end of last year. In the coming season their supply will sold at the Fair Trade market. This totals the number of farmers that have been certified with the support of FairMatch Support upto 6000 already and it is expected this number will raise in the coming months substantially so we will be able to seriously start supplying the retail with Fairtrade cashew!

Africa; Rediscovered by the major industries

2010-02-13T14:55:00.000-08:00

The last couple of decades only few foreign companies really showed interest in Africa. The continent was perceived as too risky to invest in.

The last years a silent shift is taking place. More and more companies have shown interest in the continent. From retailers, private labels to investors in processing industry. A first quick analysis might give the impression it is mostly because of CSR positioning.

However, a second analysis is creating a more interesting and more promising future for Africa. Due to the upcoming internal consumption of the BRIC countries there is already pressure on the current food sources worldwide. The naturalness of western companies of having access to these sources is changing rapidly because other buyers are interested; Chinese, Indian, Brazilian and Russian traders and investors are entering Africa as well and are buying and investing. To safeguard their supply western companies have changed their strategy and start investing. It is already obvious on a variety of commidities.

This interest is creating a serious opportunity for Africa and might change the position of the continent in the coming decades. One of the necessities to use this opportunity is that governments play with this new setting and avoid the sale of the land and bargain for the best investments. Only in that way the continent can seriously profit from this new opportunity.

Africans are getting connected...

2009-11-15T05:28:00.000-08:00

During a practical period in '84 in Kenya communication was mostly done by post. Thelephone landlines were scarce, expensive and the quality unreliable. If we had to call from Naivasha to the capital Nairobi we were still switched through a operated switch board at the post office. If the personal was having their break, no connection was possible.

Things have changes since then and it is known that Africa has skipped the situation for a good coverage of landlines directly to a good mobile network. Nowadays you can get simcards everywhere and call from almost each part of the continent.

So far it was only for calling. Last week I travelled through West Africa and when I passed the border of Burkina Faso to Ghana I switched my sim card to the MTN network and my PDA was directly downloading all my mail on my PDA from my E-mail account in The Netherlands! In a bus from Kumasi to Accra I did some bank transfers on our bank account through the local internet services on the mobile net.

From a terrace in Wenchi in the Brong Ahafo region in Ghana we had a conference call with Germany to discuss options to use mobile and ICT technology to improve the logistics and finance management in the supply of cashew farmers to the local processing industry. The use of ICT will give the farmers more info on the pricing and the options to sell. For buyers it will create the opportunity to make the collection and the use of working capital more efficient. In the midterm we should be able to start using the system as well for training...

In this continent the developments are really moving fast and ICT will increase the opportunities for development at a faster speed than we ever could have imagined....

Inspired by the movements on the continent I returned to Europe realizing our perception of the continent is single issue oriented and completely outdated... Africa is already completely connected...

Inbound services for co-ops in the Pacific: solar led lights

2009-09-16T12:00:00.000-07:00

FMS is one of the founding partners of the Pacific Growers Export Partnership. A joint initiative of teamleaders in 5 Pacific Islands; PNG, Bougainville, Vanuatu, Solomon Islands and Fiji. These teamleaders are the liason between the farmers and the traders and organize the trade locally. Major trading partner in this set up is African Pacific, a Sydney based company with a very innovative trade orientation.

First challenge was to organize trade out of the Islands but last year we started the first inbound services as well; a pilot was set up with the company Barefoot to introduce solar fed led lights into the islands. About 1000 led lights were sold in no time. Prices of the lights were about two months of kerosine costs and with a two year life expectancy the lights were sold in no time.

By doing this people safe money, their environment becomes less polluted and the system is much safer!

This year a new trade is being started to get more lights to the Islands! It learns that a co-op structure can be used for various ways!

African cashew on the move!

2009-09-07T12:25:00.000-07:00

Just returned from the annual meeting of the African Cashew Alliance in Abidjan. What started as a small group of like minded four years ago has grown tremendously with more than 160 congress participants out of more all African producing countries. This year even official delegations where present from the of major countries; India, Vietnam and Brasil. The global cashew is starting to take the African Cashew sector seriously!

Major issues were discussed; like the financing of the processing industry, improvement of the production, marketing etc.

The event was used as well to discuss the progress of the start of the African Cashew Initiative (ACI). This is unique collaboration between the private sector, implementing agencies like GTZ, Technoserve, ACA, FairMatch Support and major Funding Agencies like the Bill &Melinda Gates Foundation. The ACI is a four year joint project to give an extra boost to the African cashew industry in Ivory Coast, Ghana, Burkina Faso, Benin and Mozambique. FairMatch Support has to develop 'specialty markets' for cashew producers. This means organizing farmers, link them processors, get them certified organic or fair trade and find final markets. A real challenge!

We used the week as well for internal planning for our implementing team from Mozambique, Benin, Ghana and Burkina Faso and discussed the implementing strategies. It was great to have the whole team in one room; a lot of expertise with input from various angles.

On the flight back I realized we moved fast since we started this project 2,5 years ago. A lot has to be done to make it successful but some key elements are there to make it a real success.