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Business with a conscience
Vince Caruana, President of the Fair Trade Cooperative Society,
operators of L-Arka Fair Trade shop in St Paul’s Street,
Valletta, explains how a profitable business can be run along
Fair Trade principles
Coffee is blessed with an aroma that is as rich and tantalising
as the profits you could make if you speculated in commodities,
whether your preferred trade was in coffee, tea, sugar, cocoa
or any other. All potential money minters, these markets offer
rich pickings to traders with foresight and luck – sadly
they do not do much for the people who actually produce them.
On the contrary, as prices fluctuate according to investors’
and speculators’ whims, the ripples reverberate all the
way down the production line, causing instability, insecurity
and uncertainty to dictate the progress of entire national economies
and then continue unabated until they wash with accumulated
force against the livelihoods of the often poverty-stricken
peasant farmers and plantation workers who sow, tend and pick
the produce.
Out of every Lm1 you spend on a jar of coffee, the farmer in
the developing world gets 8c – while the speculators and
the multinationals sweep up the rest.
Does this sound fair to you? Well it certainly did not to Vince
Caruana, indefatigable campaigner for third world causes, and
President of Malta’s only Fair Trade Cooperative Society
– operators of L-Arka Fair Trade Shop in Valletta that
offers consumers the choice to purchase goods and ethnic products
that allow a fair profit to be earned by the
producers.
“I am a member of an NGO called Third World Group,”
said Mr Caruana, as he explained how he got involved in the
Fair Trade movement, “and though we were doing valuable
work among people living in depressed conditions, about four
years ago we realised that our work was all dealing with the
end result of poverty, and not addressing the causes at all.
So we decided to find a way in which to identify and promote
fairer structures that would actually combat poverty from its
roots.
“The Fair Trade Movement has exactly this mission; by buying
goods directly from producers or growers in Third World countries,
avoiding middlemen and paying a fair price that reflects the
market value of the goods, Fair Trading offers these people
the opportunity for a decent return on their labour, as well
as a sense of security in long-term planning for the future,
whether it is for their village or for their children’s
education.
“Where there is market speculation dictating the terms
of their livelihoods, you get situations where the father of
a family can afford to send his child to school one year, but
not the next. You get a situation where, if commodities trading
has lowered the price of, say, coffee, growers get less for
their product than they have paid to produce it. This means
wages for workers are drastically effected and makes it impossible
for these people to ever plan confidently for the future.”
So, as part of the Third World Group, Mr Caruana and a number
of other members got together to form the Fair Trade Cooperative
Society. “We discussed what structure we should adopt,”
said Vince, “and decided that if we want to reflect the
values of Fair Trade and democracy we should opt for a cooperative.
Of course, we don’t make any money out of it – we
are all volunteers and it is written down in our statute that
we waive our rights to take profits. But the profit that the
cooperative makes is either re-invested in the cooperative or
sent out to support projects to alleviate poverty. It was very
important to us to keep the same spirit of volunteer work as
we had at the Third World Group.”
The Fair Trade Cooperative imports third world Fair Traded goods
that have been produced or manufactured by workers’ cooperatives
or companies that offer suitable conditions and fair wages.
Consumers of these goods are offered firm guarantees of this,
as each and every product imported can be traced back to its
source, and detailed information about the manufacturers is
available. The Fair Trade Cooperative Society is able to assure
these guarantees through their affiliation with Bolzano-based
CTM, an Italian Fair Trade Movement that runs over 100 shops
around Italy. They are also members of IFAT, the International
Federation for Alternative Trade, which is a global network
of 142 Fair Trade organisations in 47 countries.
“Having decided to start doing this properly,” continued
Mr Caruana, “we obtained a loan from an Italian Bank, the
Banca Etica di Verona, whose pledge is to re-invest profits
in alleviating poverty, and bought a shop in St Paul Street,
Valletta. This was a complex step for us to take, as we had
no-one with any experience in business on the team – one
of our members actually studied for and did an accounts O’
Level just to be able to help run the business!”
A committee of six meets and coordinates all the activities
of the cooperative, that includes some 20 members, with 15 being
active. Apart from the stock sold in the L-Arka, their Valletta
outlet, the Fair Trade Cooperative Society also goes on the
road with their products, selling them at fairs, parish halls,
bazaars and other events where people congregate.
The range of products includes Fair Traded coffee, tea, honey,
jam, biscuits, chocolate, wooden and woven crafts, books, clothes
and textiles, stationery, jewellery and gifts and many others.
Each item is guaranteed and sourced, and come
from countries like Peru, India, Zimbabwe, Bangladesh, Chile,
Sri Lanka, Thailand, Kenya, Indonesia and so on.
But can a business that offers no profit motive to its founders
ever really be successful? Most seasoned businessmen would say
no, but Mr Caruana, though pragmatic, believes it can be successful.
“We think we can marry the two concepts of business and
generosity, though it is difficult. In fact, one of our main
weak points is that we have no true business acumen, and are
having to learn everything from scratch.
“I, for example, am a teacher of mathematics, and have
never been involved in business at all. But we are fortunate
in that we find the help of others who offer their advice and
support on a voluntary basis, and just three years after we
bought the shop, we are now breaking even. Our turnover at the
end of 1999 was Lm14,600, and we have expanded our stock base
from Lm3000 worth to LM8,000.”
Unfortunately, the location of L-Arka in the bowels of St Paul’s
Street means that they get practically no passing trade, and,
as I know from exasperating experience, might even be losing
specific customers who fail to locate the shop easily.
“In fact,” agreed Vince, “we are not happy with
the location because it is not central, and we are trying to
look for something more central. However, we have to find something
affordable. We do not want to have a situation where the meagre
profits are gobbled up by exorbitant property prices. For example,
we were negotiating with a prominent shopping centre to have
our goods sold from an outlet there, but the operator wanted
35 per cent on every
item! That would be completely pointless.”
The long-term objective of the Fair Trade Cooperative Society
is to make fair-traded goods accessible to as many people as
possible. Finding the right, centrally-located premises for
their shop is one way of doing this, and they will then be able
to cash in on the current trend for ethnic crafts and giftware
that has become such a strong retail market.
Besides that, they would like to see their foodstuffs available
in mainstream supermarkets. “In England,” said Mr
Caruana, “you can buy the fair traded coffee, Caffe Direct
in Sainsbury’s and all the other major supermarkets. In
other places coffee shops offer customers the choice between
normal and fair traded coffee – this is an excellent way
of expanding not only the business ideal, but also the ethos.”
So many people are disturbed by the idea of richer countries
exploiting the poorer ones and distressed by news of poverty
and famine in the third world.
“Many people ask, what can I do to help?” said Mr
Caruana. “But apart from charity we couldn’t propose
much. Now we can. Now we can offer people the chance to choose
to consume a fair traded product, and know, while they are sipping
their hot brew, or munching their chocolate, that the person
who produced it has got a fair deal. They can be certain that
at last, while enjoying a highest-quality product, they are
also doing their bit to
alleviate poverty in the world.”
The rallying cry of the Fair Trade movement around the world
is Trade Not Aid. The people they aim to help are not beggars.
They are workers of dignity and industry. All they ask is a
fair deal.
Contact the Fair Trade Cooperative Society at L-Arka, 306,
St Paul’s Street, Valletta, or on tel: 244865, or email:
v_caruana@email.com
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