CERTIFICATIONS: ORGANIC AND FAIR TRADE
The effort to achieve the shift of our growing methods towards organic agriculture has been difficult, since it involves change agricultural practices that have been around for many years, and it requires keeping very detailed records in order to monitor and track production, prerequisites for achieving certification and thus being able to enter the market.
In addition, we have succeeded in establishing and consolidating a stable structure of ongoing technical assistance and training which includes: grassroots community technicians in each locality, who are selected by groups of organic coffee producers and trained as rural product certification inspectors, and a group of agronomists involved in all activities related to the production and certification of organic coffee.
This has allowed us to develop greater control over the quality of production and the process of change, which is clearly reflected in the market. It has also enabled the initiation of new projects, such as sustainable coffee production, which goes far beyond organic production. Sustainable coffee means production based on environmental quality, the quality of farmers' lives, and the quality of the product, supported by the "fair trade" market, that is, consumers willing to pay a premium not only to receive an organic product, but to strengthen production systems that promote cultural diversity and community organization. It also indicates a struggle for recognition of the ecological services that coffee producers provide for the environment. It has been documented, for example, that shade-grown coffee, as is practiced in many parts of Oaxaca, plays an important role in maintaining the ecosystems needed for migratory birds. In addition, work has been done on the digital mapping of organic coffee-growing areas as part of the project on environmental services, climate change, and carbon sequestration.
CEPCO AND FAIR TRADE COFFEE
CEPCO became aware of Fair Trade through CNOC organizations. Between 1990 and 1992, CEPCO initiated the first contact with Fair Trade through the Max Haavelar Foundation, based in the Netherlands.
Currently, CEPCO holds FLO-Cert certification as an umbrella organization. In addition, CAEO also is certified as a marketer-exporter.
It is already possible for 100% of the coffee that organizations that CEPCO's member organization collect to be sold as Fair Trade coffee, which means a guarantee of security for our members, especially in times of low prices.
At CEPCO, what do we mean by Fair Trade?
CEPCO states that fair trade is an alternative model of trade which is becoming a reality through strategic business alliances that organizations of small producers, traders, and consumers participate in of their own free will.
• Those who participate in this alliance seek to maintain stable and long-term trade relationships that produce mutual and equal benefits for all: that is, everyone involved wins.
• Fair trade seeks to diminish the influence or pressure of supply and demand in trade relations and avoid speculation and the greed of middlemen.
• Fair trade seeks producers who offer high-quality products and receive a fair price in return, which covers their production costs as a minimum, although this is not always achieved.
• Fair trade seeks consumers who want high-quality products and in return are willing to pay a fair price.
• Fair trade seeks to bring products more directly to consumers, to lower the number of links in the chain of middlemen between the producer and the consumer. It seeks to eliminate unnecessary middlemen.
WHAT ARE THE ADVANTAGES OF PARTICIPATING IN FAIR TRADE?
The organizations of small growers that participate in fair trade have the following advantages:
A minimum price.
Fair trade offers a price that serves as a minimum level, which is $121 per 100 pounds of green coffee, whether conventional organic or in transition.
This is the price that allows the producer to cover production costs and retain some profit. $121 is the minimum price that importers must pay, even though the price of coffee on the New York Stock Exchange may be lower than this.
A social benefit award
This consists of $5 per 100 pounds of green coffee, whether conventional organic or in transition. Currently, according to the rules of fair trade, this award should be set aside to support projects that improve production or produce of social or collective benefits, which will be decided on by the members of producer organizations. Organizations have invested this social support award on various projects, such as paying for technical assistance and training, the construction of warehouses, health projects, the purchase of office equipment, etc.
An organic award
If the coffee is certified organic, this award is usually $15 per 100 pounds of green coffee.
The organizations also have the advantage of being able to ask their customers to provide them with prefinancing or credit for coffee that is collected, if they need it. The amount of credit can be as much as 60% of the amount of sales commitment, namely the value of volumes under contract, but the rate (of interest) on the credit is decided by them.
Assured and long-term market
If the members and the organization comply with fair trade rules and commitments, trade relations with their clients may continue over the long term. This means that both producers and importers are ensured marketing channels even during times of crisis.
Together, all these advantages mean that organizations can provide to their members security both in markets and prices.
WHO MAKES FAIR TRADE POSSIBLE?
Responsible consumers, in solidarity with small producers, who are willing to pay a fair price, but in return expect better-quality products.
Traders, exporters, and importers who are not eager to make excessive profits, in solidarity with producers and consumers, and who are willing to distribute profits in a less unjust manner, but in return demand shared responsibility. Some are importers who have maintained business relationships with many organizations; some they have even made these organizations partners and shareholders in their businesses, while other companies are themselves organizations that carry out the export and only recover their maintenance and operating costs. The latter is the case with our company, the Agriculture Marketing Agency of the State of Oaxaca, CAEO.
Responsible and organized small producers who are willing to fulfill their commitments in good times and bad, seeking recognition for the quality of their products through better financial rewards, in solidarity with their clients, whether they are exporters, importers, or consumers.
WHAT ARE THE CRITERIA THAT ORGANIZATIONS MUST FULFILL TO RECEIVE FAIR TRADE CERTIFICATION?
Fair Trade has included four types of criteria in its regulations. These are:
• criteria for social development,
• criteria for economic development,
• criteria for environmental development, and
• criteria for working conditions.
Also, Minimum Requirements and Progress Requirements are established for each of these critera, which producers and their organizations must meet in order to earn and maintain certification, and thus be able to participate in Fair Trade.
The minimum requirements are those that organizations must meet from the time they apply for certification as Trade Fair: that is, in the short term. If they do not meet these criteria they cannot be certified, or they could lose certification if they have already obtained it.
The progress requirements are those that organizations must meet in the medium term, over a period determined by the certification body.