Fairtrade farmers moving up chain up thae

Banana farmers in the Eastern Caribbean have been making positive strides in their bid to have a greater say in the decision-making in their industry and as a result of that to be able to ensure greater returns to the farmers. In particular, Fair-trade farmers in the islands of Dominica, St. Lucia and St. Vincent and the Grenadines, have taken significant measures to shorter the banana chain and bring the producer closer to the market.{{more}}

In furtherance of longstanding expressed demands of the farmers, and in compliance with regulations of the FLO Cert. body, the registered Fairtrade producer organization in the islands, the Windward Islands Farmers Association (WINFA), on March 20th 2008, signed an historic agreement with the exporting and marketing company, WIBDECO. This contract, the first-ever official Fairtrade contract signed by the producers, gives WINFA the sole right for the export of Fairtrade bananas.

Previous to this, there was a curious arrangement in the Windward Islands under which, although WINFA was the registered Fairtrade producer organization, private and state-controlled companies actually signed the annual contracts with WIBDECO. This gave these companies access to farmers payments allowing them to determine costs for services rendered and placing the farmers at the very end of the banana chain, receiving only what is left after all the intermediaries had their share.

This arrangement had never been a sustainable one, for while under Fairtrade rules farmers were supposed to receive a price not below their cost of production, in reality the system of the extraction of what amounted to “tributes” by the companies often led to insufficient returns. With the constant price pressures on the market and the multinational-led efforts in the WTO to scupper preferential arrangements, many farmers have had to leave the industry. (From a high of 25,000 farmers in 1992 there are now less than 4000 farmers exporting bananas from the Windwards).

So direct trading had been long advocated by WINFA and its member bodies, the National Fairtrade Organizations (NFTO) of St. Lucia, Dominica and St. Vincent and the Grenadines. The signing of the contract with WIBDECO, replacing the companies was the first stage in this process. In preparation of direct trading, the NFTOs and WINFA established their own infrastructure for managing the process. St. Lucia was the first to engage in direct trading as of April 2008 and Dominica is due to begin in mid-July. St. Vincent where there is still an anachronistic law imposing state control over banana exports, amicable discussions between WINFA, the local NFTO, the Banana Association (state-controlled) and the Government, have produced agreement on a phasing out of the Association, the repeal of the state-monopoly law and for the NFTO to fully take over the Fairtrade export business.

There has been massive farmer support for these positive measures. In all three islands farmers have made it abundantly clear, by overwhelmingly and unanimously approving them, that they not only intend to manage their own affairs, but to do so more efficiently than in the past. General Assemblies in St. Lucia (March), St. Vincent and Dominica (April) have endorsed the way forward. Moreover farmers have, in the case of St. Lucia demonstrated unequivocally where they stand.

In the face of opposition and hostility by the St. Lucia Banana Corporation, previously the dominant company there, including trying to get a Count Injunction to stop WINFA/NFTO from trading, St. Lucian banana farmers sold 77 per cent of their fruit in the first week of direct trading via the NFTO. Direct-traded Fairtrade fruit now make up 99 per cent of St. Lucian exports. Not only, that but the cost to the farmer for services has been significantly reduced, thereby increasing the farmers income. One other favourable consequence is that the signing of the contract facilitates the consolidation of the industry in a way hitherto prevented by the multiplicity of companies. In St. Lucia, the NFTO has been able to work out a co-operation agreement with one of the companies, the most efficient at that, the Commercial Farmers Organization. This strategic co-operation is also bringing benefits to the efforts of both the NFTOs in Dominica and St. Vincent in preparation for their own direct trading. Meanwhile, at a sub-regional level, the NFTOs and WINFA have been mapping out a strategic plan for rationalization of the industry, cutting costs and diversification into other crops and areas of activity.

One such area is another pioneering project, a farmers-owned, multi-island investment. In a joint investment, WINFA and the NFTOs have purchased a small agro-processing plant in St. Vincent together with a small estate. It represents the first such farmer-led practical demonstration of regional co-operation as well as WINFA’s commitment to diversify farmers options. The plant produces juices, jams and jellies under the MONTAQUE label sold up to now on the St. Vincent and the Grenadines market but it is being refurbished and plans are for regional exports as well as tapping the Fair-trade market. In addition the physical location of the estate lends itself readily to an opportunity for WINFA to further its plans for agro-tourism. A strategic plan for the development of Montaque has been drafted and is being implemented.

These initiatives indicate than in the face of mounting challenges-on the international, regional and local levels, WINFA and its farmers are being very proactive both in terms of securing the livelihood of farm families as well as in spreading the range of activities. At a time when the European Commission seems determined to press ahead with tariff cuts in MFN bananas, undermining the competitiveness of Caribbean fruit and when the US-owned ASDA supermarket chain has initiated another devastating round of price cuts, Windward farmers are hard pressed to maintain their place in the market.

Stout resistance to the plans of the Commission, increased international co-operation for a banana multi-stakeholder forum, continued and growing support in Europe for Fair-trade products and support and facilitation of farmers diversification efforts are essential for the survival and livelihood of the farming families in the islands.