Business World

Monday 19 February 2018

How Fairtrade farmers and retailers rebalanced the scales

Sarah McCabe travelled to the coffee co-ops of Nicaragua and Honduras to see the difference Irish businesses can make when they buy fairtrade products

Harvesting coffee beans. Cristina Mittermeier
Harvesting coffee beans. Cristina Mittermeier
Women sorting beans at Soppexca coffee co-operative
Sarah McCabe

Sarah McCabe

The coffee lined up in front of me in three rows of five cups, made from beans eventually destined for Bewleys, should taste of chocolate, Raul Talavera says. It is made from arabica beans, rather than the lower-quality, hardier robusta used in instant coffee. You will also pick up a clean sort of sensation, he adds.

Raul, master cupper at Nicaragua's Soppexca coffee co-operative and five-time judge at the country's Cup of Excellence competition, teaches us how to properly taste the drink - a quick succession of slurping and spitting, one cup after another.

I search for chocolate but my palate shows me up: all I can taste is coffee.

Ireland's largest coffee company Bewleys is Soppexca's biggest customer. It began buying from the co-operative in the early Nineties, starting with one modest container. Today Bewleys buys around 30pc of Soppexca's annual output of 25,000 bags.

The two trade entirely under fairtrade terms. This means Bewleys commits to paying a minimum price for the product, set by Fairtrade International - $1.40 per lb - and a premium of 20c per lb on top of either the $1.40 or the market rate, whichever is highest.

The fairtrade system is used to help farmers of all sorts of products commonly produced by the developing world, from bananas to cotton. The farmer gets a fair and guaranteed price in a market prone to volatility. In return, they must adhere to a set of core expectations, such as forming a democratically-run co-operative that operates a general assembly, produces accounts and partakes in independent audits.

The co-operative must ensure women have equal status in the organisation and promote sustainable farming practices. The decision as to how to spend the extra money is left open, something that has provoked criticism from some quarters.

"Fairtrade is unique among all trade certifications in that it guarantees a fair price and a stable price," says Bewleys managing director Jim Corbett, who travels to Nicaragua almost every year. Bewleys has strong ties with the country, its procurement director Paul O'Toole is Nicaragua's honorary consul in Ireland. About half of all Bewleys coffee is bought under fairtrade terms - but Corbett and his team are raising that to 100pc.

Located in the Jinotega region in the north of Nicaragua, Soppexca processes and sells beans on behalf of more than 700 member farmers. Locally-born Raul has worked there since he was small. He is qualified as a Q Grader, an internationally-recognised certification for coffee tasters. An in-house Q Grader is unusual for a coffee co-operative in a developing country, but Soppexca has two. They give it better credibility and bargaining power with buyers.

I met Raul, general manager Fatima, and president Andreas, on a hot afternoon in January, halfway through a week's travels through Nicaragua and Honduras with Fairtrade Ireland. Millions of beans drying on tarpaulins under the sun, raked every 20 minutes or so by workers, provided the backdrop to its dry mill processing plant. The co-operative has roughly 700 members, who this year will supply around 35 to 40 bags each. They will receive about $100 a bag, a monthly income of $350.

The dry mill is big, loud and confusing. At the end of the production line is a long zig-zagging conveyor belt, where around 60 women sit and pick through processed beans, looking for duds. It looks like hard, monotonous work. Soppexca has an electronic sorting machine, one of the managers tells me, which can sort through 12 bags an hour, just as fast as the 60 women work. But they have decided not to buy any more because this employment is so important to the local community.

Maria Sanchez is president of the workers' union. She has been working at dry mills since she was 15 and says she has never had such good working conditions. It is the first workplace where the women are unionised, she tells us. They are paid on time and have a canteen and a small shop with credit facilities. Management pay into a social security fund on their behalf, meaning the workers have a pension. She spent 10 years at her previous job in the belief that social security was being paid - it wasn't.

"Soppexca's growth over the years has been fantastic to watch," says Corbett. "They are so much further along than many other co-operatives. The organisation is run efficiently, they know their product, they invest in their people. We are trying to replicate the success of our relationship with Soppexca in Africa now."

Nicaragua is the largest of the seven countries that make up Central America. Dotted with volcanoes, it is sandwiched between Honduras to the north and Costa Rica to the south. It is one of the poorest countries in the western hemisphere and agriculture accounts for about a fifth of GDP.

Despite being one of its principal exports, for a long time Nicaraguan coffee was perceived as low quality. The industry was hindered for decades by political instability, civil war, natural disasters and diseases. Farming methods have improved, as has its reputation, and Nicaragua is now ranked about sixth in South America for coffee. (Columbian followed by Guatemalan coffee tops the charts.)

Tropical fruits are another important export. We find new mango group Copfrula (the Co-operative of Organic Fruits of the Lake Apoyo) and president Bismarck Reyes at the end of a long, bumpy dirt road in the Masaya region of Nicaragua, not far from its capital city Managua. We eat freshly plucked oranges with its management committee in the shade of banana and cocoa trees; on this farm everything is grown together.

Copfrula has 14 members, four women and 10 men. Between them they have just 54 manzanas of land (a manzana is about 70pc of a hectare). The farms are mostly worked by the members' large families - but only grown children, Bismarck quickly points out. Nicaraguan authorities have gotten stricter in recent years about sending children to school.

Copfrula signed up to fairtrade less than a year ago. It is not yet focused on delivering things like education for labourers; that is a long way off. What the fairtrade premium and guaranteed price will do in the short-term for Copfrula is lift its members out of poverty and give their fledgling co-operative a chance of success.

Copfrula will produce 1m mangoes this year, that's about 360 tonnes. Before joining fairtrade it received around $131 per processed tonne. Now it is guaranteed to get at least $151.

This higher and more stable price means there is more incentive for younger family members to stick around, says Bismarck. The land they farm has been handed down for generations - in Bismarck's case, four generations - but lately children have been abandoning farming in favour of the city and jobs which promise better pay.

Ciaran Durnien helped Copfrula to secure fairtrade certification. Originally from Northern Ireland, he has spent 18 of the last 25 years working for NGOs in Central and South America. Of the countries he has worked in, the fairtrade system has had the biggest impact in Honduras, he says.

"Signing up to fairtrade is ethically better, but it's also in coffee companies' commercial interest to back it," Durnien says. "It is better for their supply chain. Three quarters of the world's coffee is made by small producers. Keeping them alive makes the whole industry more sustainable."

Back at home, Peter Gaynor still has a hard time convincing many companies. He is managing director of Fairtrade Ireland. The organisation is celebrating its 20th anniversary in Ireland with the launch of Fairtrade Fortnight on February 29.

"We have gone in Ireland from nothing to having fairtrade products in all the main retailers. And out of all the countries in the world where fairtrade products are widely sold, Irish consumers have the highest unprompted awareness of the concept.

"But sales don't match that awareness. The big challenge now is to turn it into greater market share for fairtrade products.

"Take fairtrade bananas, for example. Bananas are an iconic product from developing countries. In the UK, fairtrade bananas make up about 35pc of the market, in Switzerland it is 55pc. In Ireland it's about 9pc.

"We have asked all the big Irish supermarket chains what percentage of their total banana sales are fairtrade - and not all of them have responded. We are asking for more support both from Irish suppliers and Irish retailers," Peter says.

"But on the other hand we have many fantastic supporters. On the coffee side, a lot of fairtrade coffee in Ireland comes from coffee chains rather than supermarkets - Insomnia, Centra and Topaz all sell 100pc fairtrade coffee, and many others are involved too.

"After the economic collapse, some firms didn't want to know. We lost a couple of licensees. Peoples' priority was value. We are enjoying a lift thanks to the recovery.

"I'm looking at the next 20 years now. We want Coca-Cola levels of awareness and sales to match. The rise of ethical shopping is helping too; the internet means people are more informed about who they are buying from. I think consumers are also growing tired of cheap, throw-away goods. They want sustainability."

Fairtrade Fortnight runs from February 29-March 13. Check out to see how to get involved

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