Posts Tagged ‘rural livelihoods’

Fair Trade: from oppressed to oppressors?

Fairtrade accused of failing to deliver benefits to African farmworkers screams the Guardian headline. Alright, the headline doesn’t exactly scream, but if they can use journalistic clichés then so can I. Either way it’s certainly not good news for Fair Trade.*

So where’s that precious premium going, then, you might ask? Why into the hands of that holy grail of much development aid: the “rural capitalist” smallholder. That terminology comes from the conclusions of the the DFID-commissioned SOAS report behind the headline. That conclusion, however, switches the quotation marks, putting quotes around “smallholder” (presumably on the basis that are not all farmers so classified have operations that are especially small) and not around “rural capitalist”. It is an interesting indicator of possible cognitive bias.

But a premium for smallholder farmers is exactly what I always thought was the main point to Fair Trade, so what’s the problem? I see a whole raft of issues bundled up here, not all of which necessarily reflect badly on Fair Trade, but which nonetheless do lead to some uncomfortable questions about where now.

  1. Have FLO and their brethren just become too successful for their own good? The bigger you are, the harder it is to maintain the highest standards everywhere. Especially when you are relying on economies of scale to make the business proposition feasible.
  2. The myth of the noble peasant. I suspect most people in FLO know it’s nonsense, but their marketing plays right up to it.
  3. Even if they knew the myth is codswallop, how much did FLO, its senior people and backers, know about the high prevalence of wage labour in some of their agricultural producer sectors? Not much presumably because the report claims to demolish another myth: that “very little wage employment has been created by smallholders in Africa.” One might suggest that, given their business, FLO ought to have understood better, but it seems the failing might be rather more widespread than just the FLO.
  4. Who better to hold down the wages of casual labourers than people living in the same village, who know exactly how much work you can extract from someone for a few shillings, and know exactly how desperate their fellow villagers are for work?
  5. Lots of aid projects try to stimulate rural capitalists. Why? Because every project needs to identify local leaders and other agents of change: local entrepreneurs are highly prized. (Who do you think all those micro-financiers are lending to?) Plus, other things being equal, a greater proportion of profits earned by such people is likely to stay in and circulate within their communities. Newly minted capitalists may spot other business opportunities in their communities, and invest, which would be missed entirely by outsiders. Conversely, it is hard to design economic development projects that specifically benefit the poorest of the poor that aren’t either incredibly expensive or just hand-outs in disguise.
  6. What’s the counterfactual? According to the report many of these labourers are amongst the very poorest in local society, and often disadvantaged for other reasons. Maybe they struggle to get employment on other farms with better wages and employment conditions? They might be no better off as a result of Fair Trade, but it seems hard to argue they are any worse off.
  7. All of which might suggest a storm in a teacup were it not for the fact that the Fair Trade Foundation say fair trade is “about better prices, decent working conditions, local sustainability and fair terms of trade for farmers and workers in the developing world” (my emphasis added). Whoops! Did they over-reach?

So what now? The report contains a whole raft of recommendations for fair trade organisations, donors and governments, and yet many of these recommendations, especially to the latter groups, the authors themselves acknowledge are highly difficult if not downright infeasible to implement in the setting of smallholder agriculture. For FLO they include a bunch of technical corrections which may help to a degree, but which will probably also make the whole Fair Trade standard that much more complicated, and therefore more intimidating to smallholders.

The authors also suggest fair trade organisations should invest more in research (now there’s a surprise coming from a bunch of professional researchers!), and better monitoring. However, where will the money come from? The report implies where it thinks there is some fat that could be trimmed:

“These recommendations are unlikely to be welcomed by Fairtrade organisations, or by the supermarkets that profit from the important public relations and product differentiation opportunities that certified products provide.”

And so we’re back to one of the main criticisms of fair trade over the years: a great proportion of the consumer product price premium stays with supermarkets, and only a very small proportion makes its way back to the farmers. As indeed is true for the non-premium bit of the price. The trouble with much fair trade labelling, alas, is that it implies that this normal law of economics is somehow reversed in the case of the price premium on fair trade labelled products.

Would fair trade work without those excess profits for supermarkets? I know too little to tell, but one has to guess that market penetration would surely be lower if it were less profitable for the supermarkets, and so, at the very least, there is a trade-off that fair trade organisations need to weigh up.

Ultimately, the bigger problem seems to be the question: can fair trade live up to all its claims reliably on a tiny slice of the product price? If fair trade organisations take a bigger slice how ethical will that be judged? Do we view this as money taken from the consumers (who are paying more) or from the producers (who could receive more if the fair trade organisations’ slice was smaller)? Fair traders have a real problem any time the debate shifts towards the latter consideration.

Many economists think the basic premise behind ‘fair trade’, namely paying a higher price than you have to, is just plain poppycock. But the many achievements of the fair trade movement to date suggest that its rationale is no more poppycock than assumptions of rational economic decision makers, and indeed that it fits very well that gap between theory and reality. The problem is that those assumptions of economic theory work well enough in so many other cases to suggest the gap (and thus its market value) is quite thin.

That does not bode so well for fair trade, but I would not write off the power of human willing self-delusion so quickly. Yes we might all be better off buying the cheaper coffee and then sponsoring a child, but consumers like to think they are doing good when they buy ethically labelled products. It’s part of the modern feel-good sales pitch. If someone is going to trade off that, better they have the moral intentions of the FLO and its peers. The next time I have the option, I’ll probably choose to buy fair trade. There are far worse ways to indulge oneself in this world.

* The Fair Trade Foundation have their own response alleging some methodological flaws in the study. Through the grape vine I gather the researchers are pushing back strongly. I am not in a position to judge how serious is the flaw nor how significantly it might affect the final conclusions.

If I were an African farmer

Not so long along ago Save the Children UK produced a bunch of adverts highlighting how anyone born into a rich country had won the ‘lottery of life’ in terms of expected well-being etc. I.e. however much we might feel like things weren’t great, that in fact we are incredibly lucky, and that globally we are the privileged 1% (or whatever the proportion is). This was popularising a fairly well established philosophical point known as the Veil of Ignorance, which asks you to consider how fair various aspects of public policy are if you do not know in advance which family you will be born into.


However, such invitations to consider the hypothetical can suffer from a sense of individual exceptionalism. (Or at least it does with me, I confess.) It goes like this:-

A key requirement of any good development worker is the ability to empathise with the people you are trying to help. (Without such empathy you probably wouldn’t be working in this sector.) So it is that on many an occasion I have thought how I would act if I were a poor rural farmer like those in the communities we are assisting. I’m a fairly bright guy (if I do say so myself) and I’ve been involved in a lot of innovative work, so even if my educational opportunities were way lower than the fantastically good education I received in the UK, I like to think that as a rural farmer I might rise above the crowd; I would try lots of different things, not everything would pay off, but enough would that I would be one of the most successful farmers in the village, respected by my peers. I may well have some position in the community leadership.

And indeed were you transplant me now, as a grown adult, into such a village I don’t think it is being too arrogant to suggest that something like that would happen. (In order to make it a fair experiment, I would have my entire technical knowledge bank wiped, and have only access to the same information other villagers have.) The life would be tough, much tougher physically and health-wise than my current life, but I like to think I would succeed.

Nature vs. Nurture

But is this really a fair thought experiment? Who am I really? We are all products of the culture in which we, and our parents before us, were brought up, and the resources that were available. We know, for instance, that the diet that a mother eats during pregnancy, and the diet of a child during its first few years, are critically important for later physical and mental development. And not just the diet; my parents talked to me a lot when I was very young, they provided a stimulating play environment, and once I was old enough encouraged me to read. The most valuable aspect of my education was not the knowledge and technical skills I learned, but the capacity to think critically and to think for myself, the thirst for new knowledge and experience, and the self-confidence to try such things. All of which is very hard to separate out from the person I am today.

Quite simply, if I were born into a rural village around here I would not be the same person. Not being the brawniest or healthiest child I may well instead have ended up something of a loser.

A hundred years ago, colonialists would routinely dismiss local people as stupid and ignorant. They were racist, but not totally wrong. They just did not understand the sheer magnitude of advantages they had in life being born a European. Even now it requires a tremendous leap of imagination to truly put ourselves in the shoes of someone born into poverty. If I were a poor African farmer, you might pity me or scorn me. If you are a development worker you might desperately want to help me, to listen to my problems, and try to see life from my perspective. You may strive not to get too frustrated when I am unable to articulate my situation or take apparently irrational decisions. I hope you would respect me. But you would not see me as an equal, because in most things I simply would not be your equal.

Beaten by Geography

A couple of issues recently have gotten me thinking about the limits of what we can achieve in development, especially when combined with conservation.

Being an organisation that has such dual aims we work in some pretty remote villages, a long way removed from infrastructure such as tarmac roads, electricity supplies or banks and markets. To complement our work, and also to build financial literacy, we have been looking at introducing a microfinance scheme into the villages. We talked to a local expert, and he emphasised that it is best if a substantial proportion of loans go to local enterprise development (IGAs = Income Generating Activities, in the jargon). I was curious as to what enterprises in remote villages such as those in which we work could benefit from a small injection of capital. His response, which included things like vegetable gardens and coconut collecting, did not fill me with much optimism. These are livelihood strategies which might help a little bit, but are not going to lift people out of poverty. Moreover, so far from a main road and markets, they are never going to get a good price, and will always be confounded by the costs of taking their produce to market. Lack of capital is not likely to be the principle barrier to enterprise development.

A friend of mine has worked in an even more remote National Park. There she was involved in a small project trying to link the tourists lodges more into the local economy; mostly basic food stuffs but also some local crafts. The problem? A remote NP such as this is very expensive to visit so they do not get many visitors, = not many opportunities for the local communities. Some aspects of the project they ended up winding down because they just didn’t make business sense, and/or were wholly dependent on my friend to market the products (i.e. not very sustainable).

These kind of stories will be familiar to any development economist. In their respective books Jeffrey Sachs and Paul Collier both talk about the severe challenges that the geography of the area of your birth can impose on your chances of participating in economic development. Generally speaking the solution is the creation of more waged jobs in urban areas so that food prices increase to a point where farmers can make a decent living. (All presuming that food prices are not subject to the myriad political controls that is the reality all over the world.)

Organisations aimed principally at poverty alleviation can choose where they work (although many do appear to ignore the basic criteria of economic geography), but conservationists much more frequently find themselves working in remote places; that’s usually where the best biodiversity is to be found. In our desire to help those communities, we need to remember these important lessons. Even the best resourced projects cannot overcome basic facts of geography.

What’s wrong with ICDPs? (Part Two)

Integrated Conservation and Development Projects (ICDPs) were discredited a long time before I took aim at them, and so you won’t find too many proponents of them today. However, they haven’t entirely gone away, they’re just not called ICDPs any more. In order to understand why one needs an insight into project design as practised by donors and BINGOs (Big International NGOs), and quite a few smaller NGOs too. They will identify a conservation problem, either that has been specifically highlighted by others, or which has come to their attention through strategic mapping of biodiversity values and threats to highlight priority areas for intervention. They will then note that the location of this conservation problem has lots of poor people living there. These days the big operators probably have a policy which says they have to consider local livelihoods etc, and, as I noted in my previous post, local people and poverty may well be root causes of the conservation problem.

So the donor/NGO decides ‘something must be done’ about poverty in the area. Indeed this stems almost directly from their decision that ‘something must be done’ about the conservation problem. Richer protagonists will, at this point, commission one or reports from ‘expert’ consultants to assess local livelihoods and what are the options for intervention. Such consultants know very well who is paying their bill, so will almost always propose at least one way to try to tackle the problem. (Entirely negative report = no future business.) And thus it is determined what ‘something’ must be done.

Unfortunately, in this problem driven process, the priority is on doing something, rather than identifying a solution that is actually feasible. This is a difficult paradox to resolve since prioritising conservation funds on the severest and most urgent problems most definitely make sense in a world of limited resources. Sometimes the problem may be so big and/or urgent that it is reasonable to argue that ‘something’ is at least worth trying.

However, the reality is that I see far too many conservation projects that are ‘working with local people’ but achieving precious little development or conservation, and where the link between the two strands of the project are not clear. Talented and imaginative project staff may, to some extent, be able to overcome this problem, but even then there can be serious concerns about overall sustainability. Elsewhere such projects simply descend into box-ticking exercises devoid of a coherent strategy. ICDPs are unfortunately far from dead.

What’s wrong with ICDPs? (Part One)

In my introduction to this blog I criticise Integrated Conservation & Development Projects (ICDPs) without going into much detail, but recently I have been queried on the subject, so here’s the fuller explanation. ICDPs first started appearing about 20 years ago and were a response to the criticism that traditional conservation projects did not take into account the needs and livelihoods of  local people, despite those same people often being central to the problems that the conservation projects sought to address. Poverty was often identified as a root cause of habitat destruction or unsustainable exploitation of natural resources, so conservation practitioners were challenged to try to alleviate this poverty. Unfortunately, as the mainstream development sector knows all too well, poverty alleviation is a deuced tricky thing to pull off, and a bunch of conservation biologists whose primary concern was the critically endangered <insert flagship species> were not likely to succeed where others had failed.

That, of course, is not a reason to abandon hope. If poverty really is the root cause of a conservation problem, and there is enough money behind solving the conservation problem, then it ought to be possible to make at least some serious inroads into local poverty concerns. The bigger error was in designing projects in which the only real integration between the conservation and development work was in the project title. (And presumably some overlap in intervention sites and resource commitments.) So, to take an example, the project might urge the community to protect a local forest, and offer a ‘bribe’ to gain the community’s support in the form of support for alternative income generating activities (which didn’t need forest land or resources) and/or new village infrastructure such as a new school. Now I don’t know about you, but if I was a poor farmer who was given an extra means of earning income, and/or a better school for my kids, I might be grateful, but if that small patch of forest was still the cheapest, easiest and closest source of firewood, then I would still go there to collect my wood fuel. In order to keep the project staff happy I might make some marginal attempt to utilise other sources and/or refrain from blatantly marching out of the forest with a pile of firewood when project staff were around, but unless you directly incentivise me to get my firewood elsewhere I am unlikely to change my practices*. And if you incentivise me negatively I am unlikely to have such a rosy view of your project any more, whilst both positive and negative incentives may well not be sustained beyond the end of the project, assuming they are dependent on external funding.

The fundamental error was committed at project design stage when the conservation and development elements were decoupled. For poverty alleviation to make a meaningful contribution to conservation, it has to be directly in the interests of local people to follow the conservation path. Hence why I have much more faith in the various flavours of Payment for Ecosystem Services strategies (watershed, REDD and biodiversity protection can all be directly rewarded), and community management of hunting concessions (e.g. the much discussed CAMPFIRE project in Zimbabwe). Also in forestry, FSC certification and bee-keeping can be combined with participatory forest management to deliver real benefits to forest conservation, whilst in fisheries, no-catch zones have been shown to increase catches overall by giving target species safe areas in which to reproduce. (Though convincing fishermen of this fact can be rather more difficult.) All of these approaches also contain within them some of the necessary ingredients to address the sustainability problem. But ICDPs as originally developed belong in the dustbin.

* This is the same kind of problem which face anti-corruption drives. Low pay may be a major cause of corruption in the first place, but simply raising peoples’ pay now is unlikely to put them off a lucrative additional earner.

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