Introducing Fair Trade high above the Clouds

In the last posting, I wrote about Vie and Basil Reyes’ approach to localizing Fair Trade as a step-by-step process. I was interested to learn more about their work so we went to the northern mountains of the Philippines to meet their partners and see their coffee roasting machines in local communities. What I found clarified much about the step-by-step process they were speaking of when I met with them.

Chou and I took the 9-hour overnight bus to Banaue, one of the Seven Wonders of the World. It is only an hour up the curvy mountain road from Lagawe in Ifugao province, so I might as well enjoy the sights while conducting my inquiry! Besides, this trip is self-funded, so I can set my own agenda... Perks aside, the inquiry went forward a day later.

In Lagawe, I met with Father Valentin and Father Marion, priests at the local Roman Catholic parish. I was interested in what they were doing and how they came about forming a local farmer’s cooperative, CoRDI, which is  both a short reference for Cordillera Mountain range and Coffee Research and Development Institute. We met over a freshly brewed coffee sitting at the KAPEHAN, the small café situated on parish grounds between the church and the school. Father Valentin holds Master’s in Development Management and established the Social Action and Development Center which is run out of the parish. Upon meeting him I quickly realized this was no regular priest! 

He explained his involvement in the local community, “Since 2001, I involved myself in the promotion of Indigenous Peoples Rights by conducting Indigenous Peoples Rights Act (IPRA) education… I also involved myself with environmental education and monitoring of government projects because we are trying to promote good governance. Later we tried to do political education, especially during the elections. We are trying to explain to people regarding the patronage politics that influences all aspects of our life, especially in development direction.” 

Like many countries around the world, patronage politics is the Achilles heel of democracy. Father Val explained, “Politicians run for office, but it is too expensive, so who will support them? Contractors, gamblers… [Once in office] politicians decide on development projects based on the needs of the contractors. We call them ‘juicy projects’ because instead of responding to the real needs of people, they are responding to the financial interests of the contractors.”

 

I could understand the interest a Catholic priest would have in promoting good governance, but I was curious how the Social Action and Development Center got involved in coffee production. He shared his experience in conducting environmental education with people living high in the cloud forests of the Cordillera Mountain Range. “They were converting their forests into vegetable gardens. Of course we asked why. They said that it is because they also wanted to survive. We asked them what were the alternatives, and our approach was from the perspective of faith and religion. We said, ‘Look, God created everything, and He made everything for us to survive. Now we are destroying it.’ They said, ‘How can we survive also? We have needs like food, education for the children, health.’ I asked them to list their existing resources and they named several fruits and coffee. For the fruits, we convinced them to have training in Sante Fe on how to harvest fruits, to turn fruits into jam, juice and fruit preserves. They went back and they were successful. We thought since they were successful, we needed to introduce another source of income, and we went into coffee.”

Father Marion, interim manager of Cordi Cooperative

I was impressed! I was speaking with a Father who was very in-tune with the needs of his flock. Typically the people in this area needed only one hectare to support their family, and Father Val inquired as to why they needed more and turned to tearing down the forest. “I found that the rich people, the capitalists, come in and offer capital for the farmers. They would say, ‘do you have a forest?’ The farmer would say yes. ‘Do you want to convert the forest to vegetable garden?’ And the farmer would say yes. ‘Then cut down the trees’ and later come in with the heavy equipment to level the land. Then they would say, ‘here is your capital for vegetable seeds and inputs like fertilizer and pesticides’. At harvest time the capital provider would say, ‘I will bring the truck and carry your vegetable to the trading post.’ Then afterward, the capitalist would say, ‘this is the remaining balance.’ It was a very small income for the farmers for four months labor. The farmers realized one hectare is not enough, which was the intention of the capitalists.

My question is this; why is it that you hear in Manila the price of the cabbage is around 30 or 40 Pecos per kilogram, even 60 Pecos, but here in the trading post it is 5 or 10 Pecos? It is a very big difference. No wonder the farmers say that one hectare is not enough and have to clear more and more.

Ifugao Kape, product of the Social Action and Development Center

Father Val went on to discuss the role of a syndicate that is controlling the local trading posts and shipping the mountain grown vegetables to Manila. We also discussed possible alternatives, such as his fruit jam and preserves project. Those are sold by the Sisters at the Good Sheppard in Baguio, the nearest city halfway to Manila. “The sisters are trying to help the farmers and for those producing organic food. Good Sheppard Sisters is an established outlet. There are many food products there, and one on display is Ifugao Kape.”

Father Marion, me, Father Valentin and the user-friendly Bote Central Coffee Roaster

With the coffee roaster from Bote Central, the enterprising priests have set up two coffee brands made by CoRDI. Lagawe Blends is made by the cooperative and sold locally at KAPEHAN. Ifugao Kape is the brand made for the Social Action and Development Center, and the market range for this premium blend reaches into neighboring provinces. In the discussion, they confessed their need to work on the marketing side of the venture. Chou and I decided that one thing we could do was buy ten bags of the Ifugao Premium Blend, and give them away to possible buyers and retailers we come across in the journey. 

When we returned to Banaue, we sat with the owners of two lodges listed in the Lonely Planet – that influential guidebook that exerts an inordinate amount of influence over backpackers from all over the globe. Both were receptive to our sales pitch advocating they buy and promote coffee grown and roasted by their neighbors. We even did the calculations of scoops per cup. Selling a cup of freshly brewed coffee for 35 Pecos (US $0.80) would net them over 500 Pecos per bag in profit. Admittedly, it was a bit strange for the lodge owners to be given a sales pitch by a couple of dusty tourists toting the coffee roasted from an hour down the road, but we had fun. We gave away all ten coffees on our journey back south with contact information to reach Father Val. 

During our two day stay at the Parish, the Fathers also shared with me the inner workings of the cooperative, prices paid to farmers for Robusta and Arabica coffee beans,  limitations and profit margins, challenges they have encountered since they were established a little over a year and a half ago, and the origins of the project.  Father Marion noted, "planting coffee in Lagawe as a business venture began in the 50's, years before any roaster was introduced in the community."

Sharon in Coffee Heaven!

The Philippines adopted a One Town One Product promotion to encourage rural development. The OTOP promotion for Lagawe was designed a team led by Sharon Grace. “Fortunately when the new mayor was elected he came to me to ask what the OTOP should be. He wanted to change to making handmade brooms but I was able to convince him to stay with coffee. The new mayors usually want to change everything, to make their own mark on the community.” Father Marion added, "He did not change it but made the program more strategic. Mayor Cabbigat of Lagawe and his team proposed a new direction for its OTOP--to produce Arabica-Based Coffee Blends or in short Lagawe Arabica Blends...Thus,in partnership with the department of Trade and Industry and SN Aboitiz Power Inc, the coffee program in Lagawe began to take shape. Lagawe Blends became the brand that preceded coffee brands in Ifugao. Another brand -Terraces Brew by Unique Cooperative was also introduced almost at the same time and it was generally marketed in Banaue, Ifugao."

Under Sharon’s guidance, the LG, or local government unit spearheaded the development of Lagawe’s coffee enterprise, establishing minimum prices paid to farmers for organically grown high quality beans. Father Marion explained, “When the time came to make it a business, the government had to create a cooperative, or to tap local investors to put into the OTOP. So we created a cooperative.  We have 71 members now.”

Although Arabica brings in twice the price per kilogram, the farmers have 2-3 Robusta coffee trees on their lands left over from the Halcyon Days when the Philippines was the number 2 exporter of coffee in the world. To revive those neglected trees takes an effort, but it is an immediately available resource. In addition, CoRDI farmers are planting Arabica with great care to ensure they meet the requirements for organically grown. 

 

Father Marion explained that CoRDI had to accept a few provisions set by the LG in order to take over the business venture started by the LG. One was to maintain the prices paid for green coffee beans. “Last year when the farmers realized when we bought their coffee direct from them, they were surprised. The LG started buying for 100 Pecos / kg for Robusta while Nestle was paying 65/kg at that time. They were surprised, but it was in the general interest of the farmers.  LG set the pricing and we had to keep up all the programs and the pricing.” 

Arabica Seedlings!!!

Another requirement was to continue the reforestation efforts. After our discussion they showed me around the premises. Walking by a nursery on the way to the coffee roaster behind the church Father Val noted, “We have already produced over 20,000 Arabica seedlings and distributed them to the farmers who ask.” Reforesting with Arabica coffee, what a great idea!  It takes three years for the trees to produce, and in a few years, there will be a lot of Arabica produced in the nearby area of Tinoc. To this, Father Marion added, "In Lagawe, most of the 53,000 Arabica seedlings distributed and planted in 2009 died during the drought in 2010." Despite the setback, I see their ambition is far ahead of their marketing strategy, but in doing the work of the Lord, I suspect they will have an advantage in what will amount to be a venture in Fair Trade coffee.   

While learning about the challenges and functions of a cooperative, I inquired about Fair Trade. New to the concept, Father Marion admitted he was still in the process of learning about the principles beyond providing fair prices for farmers. Over the time we shared, my research with CoRDI Cooperative turned into an opportunity for capacity building and experience sharing. I spent many hours with Father Marion as he graciously took me around the area to meet local farmers, and allowed me to join him and Sharon Grace on a coffee buying expedition to a village near Sagada, a few hours’ drive away from Lagawe. 

For those interested in the coffee buying expedition, please go to my facebook page where Chou has posted many photos of our journey. Also feel free to connect with me there, I am always interested in meeting the people who read my blog.  

Sharon Grace and Father Marion let Chou and I join them on a coffee buying expedition

Father Marion summarized the mission of CoRDI, "We are working to establish a real local coffee industry in Lagawe, in Ifugao Province and in the Cordillera, in partnership with as many who share our vision and our concept that coffee can be a sustainable fuel for growth and that can be seen from a myriad of lenses or from many perspectives....from enterprise, from sustainable agriculture, from environment conservation, from eco-tourism..."

During my stay in Lagawe and in Sagada, I began to see more clearly the reason Vie and Basil Reyes make Fair Trade a step-by-step process that can take a period of 2-3 years depending on the community.

To say,

      "Fair Trade is about Social Change"

                                       is an understatement!

Locally, Fair Trade challenges a myriad of issues: the concept of business as usual; the role of women in the household, in society and within an organization; the participation of children in family operations; the role of organizational management and levels of participation by members/producers; and how to deal with partnering organizations and suppliers. Fair Trade is a game changer. Nothing remains the same once these concepts are adopted.

For Bote Central to introduce Fair Trade first by technically supporting local partners which depend 100% on their local economies, is as practical as it is useful. Their undertaking is nothing short of a commitment to initiating social change in every community they engage. Meeting with the partners, I saw directly the challenges and social issues they embrace. I also saw the value of localizing Fair Trade. 

I believe that Vie and Basil have begun moving Fair Trade in the direction it needs to go in the future if it is to be a sustainable endeavor. Complete dependence on trade with the North has proven to be unsustainable. Reflecting on the lessons learned from the recent Global Recession, I believe more attention has to be focused on developing Fair Trade in local communities.  Local outlets supported by local economies. I am not advocating for the end of trade with the North, but to introduce Fair Trade as a locally applicable model for doing business.  To diversify markets. 

As for introducing Fair Trade to a community, providing practical support and easily integrated guidelines is a good place to start. Fair Trade in action more than words.

Imagine this: 

Local beans, local processing, local roasting, local sales, 
and local consumption all contributing to a local economy. 

Not one bean exported, but Fair Trade localized! 

Thank you for joining me in this journey. Feel free to follow this blog and to add your comments, ideas or suggestions as we go.

Sincerely,

Mitch Teberg, MA

To Make Coffee Sustainable

In late 2006, I met a “Development Specialist” from Japan. He was working with a minority group in the highlands in Vietnam and that they were growing new crops for export to Japan as a way to reduce poverty. Being familiar with the region, I asked, “Has the crop led to an increase in the nutrition levels of their children?” The blank look on his face was a giveaway; they were growing a cash crop for export to Japan. The project had nothing to do with the physical well-being of the people or for local consumption despite the nutritional value of the crop itself. Nor was the project aimed to develop local markets with a high value-added crop that is both affordable and locally available thereby supporting the increase of nutritional levels of an entire community. 

As for the influx of cash for these subsistence level farmers; what were they buying with their new found consumer power? Well, he didn’t know but that wasn’t his concern. Subsistence level farmers simply need cash to buy products on the market, end of story. That was the school of thought he had clearly graduated from, the University of Economics devoid of any social or cultural context and in absence of humanity. 

As it was with the Development Specialist, the best way to expose our blind spots we begin by asking relevant questions in their simplest forms. 

The same format of questions can be made with Fair Trade. During my inquiry in the northern mountains of the Philippines, I was pondering the development of local markets with locally produced goods inclusive of socially and culturally recognized benefits. I repeatedly asked myself, “How can Fair Trade be integrated to benefit local communities more than it does through trade with the North?”

In the most direct and simplest form I asked myself, “How can Fair Trade be localized?”

Basil and Vie Reyes have also been asking these questions. They founded Bote Central and started a new Filipino Coffee brand, Coffee Alamid. Through their efforts, they have been making Fair Trade a local concept throughout the Philippines, but not in the conventional manner. Their basic question is even more direct to the local context; "How to make coffee sustainable?" 

 

Vie explained the history, “The Philippines used to be number four exporter of coffee in the world. Then many other nations came in and the Filipino coffee died out. Filipino farmers started to cut down their coffee trees because the prices were too low. Now we are importing coffee. Farmers preferred not to work in coffee, but in vegetables and other crops; cash crops. So what we did initially, we thought the farmers need help in producing more coffee. But we were wrong. It wasn’t sustainable” 

With a sincere interest in reducing rural poverty, they generated a renewed interest in reviving the neglected coffee trees in select communities. It takes three years for a tree to produce, so it made sense that the trees left from the golden days of Filipino coffee be tapped once again as an immediately available resource. But simply putting coffee beans on the market isn’t going to do much towards poverty alleviation. 

Here is where a Fair Trade advocate will smile and think to his or herself, “Community Development through the creation of a Fair Trade Cooperative!” Well, yes, but Vie and Basil take it a step further. Admittedly, their approach is unconventional and it should be noted they are not even vaguely concerned about international markets or Fair Trade labeling. 

Vie explained, “We don’t use Fair Trade or the Fair Trade network, not yet. It is not necessarily our style of working with producers because it is complicated for them. There are only a few coffee producers here that are into Fair Trade.” Rather than focus on the abstracts of Fair Trade principles from the onset, they want to develop local markets that reflect Fair Trade in action more than words. Vie describes it as a step-by-step process. The first step is to identify and work with a community which would benefit from their approach.  

“What we are doing with the communities we are working with is that we want them to have a complete cycle. Basil is an inventor, so I told him to come up with a roasting machine and at the community site they could roast coffee. That way they could have their own coffee. So he put one together using fuzzy logic and they are computerized, fully automatic, very user friendly and can be used to roast. I am not technical but I can use this. So what we did was make it so farmers can produce their own coffee, come up with their own product. They can have their own brand and sell their own coffee in their local communities, and in the simplest form they can drink their own coffee and not buy instant coffee.”

Basil added, “We put up a roasting facility so that locals can roast their own coffee, because roasting facilities in the Philippines belong to corporations like Nestle. So, I build roasting machines for them. Easiest way to solve the problem!

Basically I built the roasting machines for farmers to earn more; they have to go for value added. The best way to value add, is to roast the coffee. Unfortunately there were no roasting machines or facilities available to the farmers. Farmers don’t need roasting machines they don’t understand at all. They just press the button, the machines sets it, and forget it. You can’t teach them the art of roasting. Roast master stuff. So I built a roasting machine and they are all over the country, testing my prototypes and at the same time they make money. Farmers can roast their own beans like in Sagada …In some cases we changed them from electricity to gas – in the rural areas, stable electricity can be hard to find. 

Why is this revolutionary or even noteworthy? To begin, over fifty percent of the coffee consumed in the Philippines is imported, and most of that is in the form of Nestle’s instant coffee. Surprisingly, instant coffee is a 10 billion Pecos (US$ 226+ million) per year market and this financial drain to the coffers of a multi-national corporation is not sustainable. It is a sad commentary when a multinational corporation enters your market and redefines the coffee culture of a traditional household industry slow roasting beans over an open flame and steeping the fine grounds through a cheesecloth filter, to that of instant powder packets. Not to mention this corporation is the same advocate for international free trade policies of GATT and the WTO which wiped out the coffee farmers nationwide as new competitors entered the fray producing ever cheaper coffee from ever poorer nations. In the race to the bottom of who can produce more for less, the Philippines lost their position in the 1980’s.  

The Reyes’ face a battle on three fronts; first is to reinvigorate the coffee growing industry; secondly, to reclaim the definition of coffee from the multi-nationals; and thirdly, to introduce the concept of Fair Trade in local markets. That includes generating a sense of ownership amongst farmers over their produce and to convince communities to consume their own produce. 

“So, we are promoting Fair Trade on the Philippine market for locals. When we think of export, we think local is better… we try to promote Fair Trade: Drink Filipino Coffee. That is my starting point. The trouble here is that people don’t patronize our own coffee. They want the imports because they think it is a lot better. We are trying to change the landscape of Filipino coffee. Revolutionize. That is how we are trying to do Fair Trade. Not necessarily by talking about Fair Trade, we let the FTOs do that... It is the spirit of Fair Trade we are going after. We want the market to understand what Fair Trade is all about; the local market. Not necessarily talking about Fair Trade, Fair Trade, Fair Trade, but for the actions. It is what is inside Fair Trade. That is how we are doing; it is really not a big job. If you tell them what Fair Trade is all about, they don’t understand. Fair Trade principles are just words. There has to be something for the people in the forest to live life better in the forest where they get their sustenance and their livelihood”

The Kindred Spirits

To generate this spirit of Fair Trade, the Reyes’ speak of building relationships and incubation periods during which they introduce Fair Trade principles in a step-by-step process. 

As for my experience in meeting with Basil and Vie, it was invigorating. I learned much, but listening to a genuine story teller like Basil is a captivating experience. I asked him to share his process and he opened up; “It is easy to become a trader. It is more difficult to build a friendship. I enjoy having friends up in the mountains, but that’s another story. I spend 2-3 days when I go up there. Sometimes I just go there to relax. You know, no work, just be with the people there, enjoy the scenery, enjoy their foods, talk to them about nothing; enjoying the good air out of the hustle and bustle of the city. It is easy for me to be with them.

It takes two to three years before the social barriers are broken down. I become part of a community and the trust level and confidence level is enough to be able to transact a friendly exchange. Initially they think I am like any other buyer until I become their friend, then everything else changes. 

So it takes some time for these people to open up. We are establishing a relationship, but it takes longer for these people, unlike business, show me your money and your goods. Here we have a relationship. We don’t have contracts. We look them in the eye, shake their hand and hope for the best. It is based on trust and integrity; Fair Trade values.

Most important is the relationship. That is the idea, to make coffee sustainable.”

Success is two parts to me. First, I get friends there, and secondly I can buy the product I need. I like mountain climbing that is my other selfish motive. I like the outdoors. I can go to places where other people cannot go because they are my friends. There is a cave there or a waterfall there. These are all benefits for me. 

When I was a teenager I would go to the mountains and enjoyed nature. It all started there. It so happened that my friends were indigenous. It was the only place where you could go and the guys were dirt poor, didn’t have money and only a few things in his hut, and he boils water for me and digs up the sugar that is buried in a can so people won’t take it, and we start talking. Can’t beat that; that is why I go up. 

Basil went on to give examples of the relationships he has developed throughout the nation and the effect he has had. “In Sagada, the most expensive coffee in the Philippines is there because everybody there is roasting their coffee; you cannot get the green beans. They won’t sell because they make more by roasting them. I do get beans from Sagada because I started everything there. I developed friends, I developed relationships.

 

In Lagawe (in a neighboring province to Sagada), the cooperative has its own café and there is a roasting facility as well. It is theirs. They run it themselves. The concept is that there will be small Community Starbucks, CommunityBucks. What happened there is we can see signs of success, little successes. 

In Sagada you see less instant coffee in the stores, more brewed coffee and more of their own community brand. If you go there, you cannot buy green coffee beans because they can make more money selling a finished product. Farmers make more money on the local marketplace than they can by exporting raw beans. 

In the south in Jolo it is quite dangerous. I am sure you have heard about the extremism there. Here Farmers group themselves together, they put up a facility, they ask for grants and they paid for a coffee roaster. Now they are running a coffee business there and they want a second roasting machine. In the war stricken areas they have hope for the women and children. They don’t just trade bullets and armaments, but they are trading coffee. We are starting a peace movement with coffee. 

Vie stated succinctly, “When we work with local growers to roast their coffees, we teach them to make a finished product that is purchased by the community. The initial costs are paid back to us over time. We have a system where the communities or the producers must be accountable, otherwise they don’t take care, they don’t see it as a tool for themselves. Generate a sense of ownership, accountability, basically running a business.”

Meeting with Vie and Basil was as transformative as it was informative, and I had to see for myself! I decided to head to the mountains to meet the cooperative in Lagawe with its own community coffee shop, and to see the coffee roaster in Sagada. My inquiry will be posted in the near future, but I can assure you that the coffee was terrific! 

Thank you for joining me in this journey. Feel free to follow this blog and to add your comments, ideas or suggestions as we go.

Sincerely,

Mitch Teberg, MA