Brazil is turning into one of the world’s leading producers and consumers of
Fair and Ethical Trade. “This should become a reality within the next five
years, due to the diversity of national production and to the rising number of
consumers in the large urban centers, especially in the South and Southeast of
the country,” says Louise Machado, coordinator at the Market Access Unit of the
Brazilian Micro and Small Business Support Service (Sebrae).
Sebrae has recently disclosed a previously unpublished survey on Fair and Ethical Trade.
According to the survey, conducted by the Schneider & Associados consultancy firm, there are now in Brazil more than 14,000 ethical enterprises that practice fair trade, distributed across 2,274 cities. The total corresponds to 41% of all Brazilian municipalities.
The largest concentration is in the northeastern region, which houses 44% of the initiatives. The southern region has 17%, the Southeast 14%, the North 13%, and the Midwest 12%. The most commercialized national products include those linked to activities such as agriculture, extractive activities and fishing, food, beverages and handicraft products.
According to Louise, the aim of the survey was to map out the main opportunities in the international Fair Trade market for Brazilian products. “To know who buys, what they buy and how they buy,” says Louise.
The survey points out that the system grows at a rate of approximately 20% per year worldwide. In 2005, it reached estimated revenues of US$ 1.67 billion in the retail market. In that same year, certified Fair Trade benefited around 1 million farmers and workers in more than 50 countries. Presently, the largest buyer markets for the Fair Trade system are the United States, the United Kingdom, Switzerland, France and Germany.
The estimated revenue from products certified by the Fair Trade system in the United States totaled US$ 503 million; in the United Kingdom, the system had a turnover of approximately US$ 301 million; in Switzerland, US$ 209 million. In France, the system generated US$ 159 million in earnings.
The survey by Sebrae also features a list of the main products sold in the world that bear the certification label of the Fair Trade Labelling Organization International (FLO).
First in the ranking of products is bananas, which represent 62.2% of Fair Trade. Next up comes coffee, at 26.9%. Then comes cocoa, at 2.7%, and fruit juices, at 2.4%. Cotton, flowers and textiles also feature in the list.
Musical instruments, toys and some types of textiles are sold under their own certification criteria, because their regulations have not yet been incorporated by the FLO.
“Brazil is perfectly capable of meeting that demand. Within the concept of Fair Trade, the country already exports coffee, sugar, banana, nuts, dry fruit, guaraná powder, açaí, cocoa, cachaça (sugarcane spirit), honey, knitted blouses and lots of handicraft,” lists Louise.
According to the coordinator, the concentration of products in conventional retail, the raised awareness of society about the importance of the issue and the launch of products bearing the Fair Trade label by traditional brands are going to cause a change in consumption habits.
“Social responsibility has been increasing in recent years, and this allows for several products to have a market differential when introduced as Fair Trade,” she ensures. Louise also claims that people are more aware of their responsibility when they go out shopping.
“The concern with choosing quality, ecologically correct products, has increased. If consumers also find that they are purchasing a product that generates employment and income, and allows for countrymen to stay in their land, then they will know that they are benefiting an entire production chain,” she states.
Fair and Ethical Trade is a commercial relation based on principles such as respect to the environment, equality between men and women, promotion of children’s rights, ethics, democratic management, transparency in trade relations and fair pricing.
The foundation of the system consists of ensuring a dignified living and a future perspective to small farmers in developing countries by means of trading their products, and not through humanitarian aid handouts. To that extent, direct contact is sought between farmers and buyers, freeing the former from depending on intermediaries.
This type of commercial trade began in the 1960 among small farmers in the Southern Hemisphere and Northern countries, based on an initiative by ethical groups concerned with unequal trade relations among those farmers. Presently, Fair Trade is fairly widespread in European countries, in the United States and in Japan.
Here in Brazil, it started in the 1970s by means of the work of European NGOs, the majority of which were linked to church work turned to organizing groups of rural workers and informal sales of handicraft.
According to Louise, the system gained strength as it became articulated with the civil society, upon the establishment of the Brazilian Forum for Articulation of Ethical and Social Trade – Faces of Brazil, in 2001.
“The goal was to bring together organizations of farmers, consumers, government and non-government organizations and representations in order to discuss alternatives for small farmers to have market access, aiming at their competitiveness and financial sustainability,” she explains.
A New Kind of Trade
As Brazil does not yet have specific regulations for Fair Trade, which has been growing around 20% worldwide, civil and governmental organizations are joining forces to spread around the country the importance of the system that currently has a global turnover of over US$ 1.7 billion and benefits approximately one million farmers and workers in over 50 countries.
An example of the number of people working to promote the development of the 14,000 enterprises in the sector that are already operating in Brazil – according to the Sebrae study – is the agreement signed between the Sebrae and NGO Visão Mundial (Global Vision), which is developing guides for producers and consultants interested in working within the Fair Trade concept.
“It all started with the implementation of five pilot projects that would serve as models for the development of methodology for entry into Fair Trade markets,” explained Renata Cavalcanti, project coordinator at Global Vision. According to her, from the experiences of each of these groups, subsidies for the preparation of the guide were collected.
“Elaboration took place considering the realities of each group. The language is simple and direct. It is a step-by-step guide, with true examples,” explained Renata.
In total there are five guidelines: the first explains the concept, principles and advantages of Fair Trade, the second discusses access to the foreign market, the third is turned to access to governmental companies, the fourth covers the access to large international buyers, and the fifth teaches producers how to reach national supermarkets.
“Accompanying the groups was wonderful work. Now we are in the phase of paging and illustrating the material, to be released in March 2008,” explains Renata. “As we also plan to reach countries in Latin America, the material will also have versions in English and Spanish,” she added.
Apart from the printed booklet, the material also includes a video-documentary that shows the activities of the groups participating in the process. The kits will be forwarded by Global Vision and by the Sebrae, through consultants all around the country. “Initial forecasts are for one thousand copies of each of the five guides to be made, plus the online version, which will be an important promotion tool,” she bets.
The Fair Trade coordinator at the Sebrae, Louise Machado, recalls that since 2004 the institution has been developing actions geared at promoting market access for micro and small companies and also for small farmers.
The Sebrae idea, explains Louise, is to have farmers themselves processing the products, adding value, and selling directly to importers. “We want to avoid the old system in which the large buy from the small for a low value, process the product and sell for a high value,” she pointed out.
Other great challenges, according to Louise, are how to organize workers so that they may access the domestic and foreign market with competence and how to finance the strategies, as most of the laborer associations face difficulties regarding technical and commercial support.
According to Louise, the question of Fair Trade regulation in Brazil – with the definition of laws, norms, benefits and a certification stamp for the sector – is already being discussed by the Sebrae in partnership with the ministries of Labor – through the National Secretariat for the Fair Economy (Senaes) – of Agrarian Development, Environment and also by organizations Global Vision, Ecojus and Faces of Brazil.
“We hope for the situation to be defined in the near future. We want to reach the same levels as England, where there are Fair Trade schools, universities and shopping centers,” guarantees Renata Cavalcanti. “The main player in Fair Trade is the consumer, as it is he who generates the demand for the system. We need to inform the population to generate consumption,” she pointed out.
Cooperation for a Better World
One of the pilot projects accompanied by the Sebrae and by Visão Mundial (Global Vision) is Cooperative for Artistic Processing of Cashew Nuts in Rio Grande do Norte (Coopercaju), which includes 10 associations of small producers in the northeast of Brazil, directly benefiting around 200 families and another 3,000 people indirectly.
“The objective behind uniting these communities is to make possible the processing of cashew nuts and the trade on the domestic and foreign markets,” explained José Francisco, chairman at Coopercaju. “We all work with dignity, respect to the environment and with the certainty that a fair price will be paid for production,” she guarantees.
José Francisco explains that with the support of the Bank of Brazil Foundation, through the Project for Implementation of Mini Cashew Nut Factories, the cooperative managed to install a cashew nut processing packing and trade center at their headquarters, where they produce 10,000 kilograms of cashew a month. The installed capacity, however, is 30,000 kilograms.
In 2006 the group closed its first export to the European market. Producers from Serra do Mel supplied the raw material and it was exported for US$ 284,000. The foundation also installed another three mini factories in the cities of Martins, Apodi and Caraúbas, all in Rio Grande do Norte.
The target for 2008 is to install four mini factories in the state and to benefit another 430 producers, approximately, and another 5,000 people directly and indirectly.
Her impoverished childhood on a farm in Gravatá, in the interior of the state of Pernambuco, did not offer many future perspectives to Nilza Barbosa da Silva, aged 42, and to her 10 brothers.
She learnt how to read and write at the age of 14, the same age in which she started participating in NGO Círculo Operário (Laborer Circle), which offers free courses, like sewing, to the population, in partnership with the Sebrae and the Senai (National Service of Industrial Education). There, Nilza discovered her talent for handicraft and she had the idea of making cloth dolls.
“One of the instructors took a large cloth doll to the course. I thought it was very nice and decided to make a small one,” she explained. That is how the luck dolls arose, and they later became solidarity dolls. The name changed as soon as Nilza learnt what Fair and Ethical Trade was.
Nilza’s first 10 creations were sold the following week to colleagues in the course. They were then taken to handicraft fairs, reaching other states in Brazil and also going abroad. “A friend who lived in Italy took a large volume of them when he left Brazil,” recalls Nilza.
Initially sales were sporadic, but Nilza never gave up on her dolls. “I lived many difficult moments, months without selling anything, but I never stopped believing. I was sure that one day a large buyer would appear,” she says. Her dream started coming true in 2001, when two Dutch citizens visited Gravatá. They loved her work and made an initial order for 3,000 dolls.
“I already had 1,500 ready. In few days I trained some neighbors and we managed to deliver the order in the stipulated time,” she recalled. Since then, the orders have only risen. Nilza’s monthly production is currently at 10,000 dolls. A large part goes to the foreign market.
The success is so big that in 2006 the dolls won an award for being the Brazilian Fair and Ethical Trade product most exported to Holland, Belgium and Luxembourg. The award was granted by Barbosa do Brasil, which is one of the largest fair and ethical trade importers in the Netherlands.
To supply the growing demand, the artist counts on the help of 85 women to whom she taught the trade and with whom she shares the profit. “I have already trained over 150 women in Pernambuco,” she says, proudly. Most of these women have dolls as the only source of income for their families. They earn on average 350 Brazilian reais (US$ 200) a month.
The dolls are produced in a very unique manner. Each woman in the group is responsible for part of the production of the dolls. According to Nilza, this process makes it possible for orders to be delivered faster, increasing the quality of the end products.
Following the steps of her dolls, Nilza also travelled abroad. In July she spent a week in the Netherlands at the invitation of her importers. “I was there, seeing my dolls on the shelves of those beautiful shops, and I could hardly believe it was true. I owe all I have and what I am to my work,” she says.
In Cascatinha neighborhood, in the city of Petrópolis, an ancient imperial city in the state of Rio de Janeiro, 14 seamstresses work on the production of shirts, skirts, trousers and coats under the brand Tudo Bom. Erica Santos da Costa, the group coordinator, explains that Tudo Bom (All’s Well) was established in 2004 by Jerome Schatzman, a Frenchman who lived in Brazil for three years and helped promote the idea of Fair Trade here.
“The name was inspired on the good humor of Brazilians, as part of the work developed by NGO Onda Solidária, in Rio de Janeiro,” she explains. The organization operates in the generation of jobs and income in slums, offering productive spaces and fair trade, focussing on trade and development of the productive chain.
Before being inserted in the Fair Trade system, explained Erica, the seamstresses worked at home and earned per article produced. “If they became ill, they made no money,” she explained. Today they are all employed officially and, apart from the minimum wage of 490 reais (US$ 280) for seamstresses and 380 reais (US$ 200) for those finishing the products, they also receive a production bonus and a quality award every three months, which may vary between 5% and 10% of their salary.
“Our reality has been completely transformed. We produce each article with extreme care and only work with organic cotton,” explained Erica. A large part of the production of 4,000 articles a month is exported to Europe. In France, 20 shops already trade the clothes, half of them in Paris.
Several Onda Solidária friends and volunteers also sell the Tudo Bom brand all around the globe. “Jerome comes to Brazil twice or three times a year to visit us, to tell us about product acceptance abroad and to speak about the projects for the following year,” she explained. “In January 2008 he will be here with news,” she guarantees.
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