Fairtrade needs a review of the standards to support Amazonian collectors

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

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...

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