Producing and Consuming Narratives the Value of Fairtrade Coffee Silje Johannessen
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Producing and Consuming Narratives The Value of Fairtrade Coffee By: Silje Johannesen Master thesis Management of Natural Resources and Sustainable Agriculture Universitetet for Miljø og Biovitenskap Supervisor: Tor Arve Benjaminsen The Department of International Environment and Development Studies, Noragric, is the international gateway for the Norwegian University of Life Sciences (UMB). Eight departments, associated research institutions and the Norwegian College of Veterinary Medicine in Oslo. Established in 1986, Noragric’s contribution to international development lies in the interface between research, education (Bachelor, Master and PhD programmes) and assignments. The Noragric Master theses are the final theses submitted by students in order to fulfil the requirements under the Noragric Master programme “Management of Natural Resources and Sustainable Agriculture” (MNRSA), “Development Studies” and other Master programmes. The findings in this thesis do not necessarily reflect the views of Noragric. Extracts from this publication may only be reproduced after prior consultation with the author and on condition that the source is indicated. For rights of reproduction or translation contact Noragric. © Silje Johannessen, June 2008 [email protected] Noragric Department of International Environment and Development Studies P.O. Box 5003 N-1432 Ås Norway Tel.: +47 64 96 52 00 Fax: +47 64 96 52 01 Internet: http://www.umb.no/noragric Declaration I, (name), declare that this thesis is a result of my research investigations and findings. Sources of information other than my own have been acknowledged and a reference list has been appended. This work has not been previously submitted to any other university for award of any type of academic degree. Signature……………………………….. Date………………………………………… 3 ACKNOWLEDGEMENT First of all, I would like to thank my supervisor in Norway, Tor Arve Benjaminsen, for his guidance through the work of this thesis. Further, I would like to thank the team at CATIE, CeCoECO for welcoming me and helping me connecting to a wider network of actors within the coffee industry in Central America. A special thank to Dietmar Stoian and Jeremy Heggar at CATIE, for constructive advice and guidance. In Nicaragua, I would like to express deep gratefulness to Julio Solorzano at FondeAgro, and Chepe (Martinez), manager of El Polo, who welcomed me and made my field work possible. I want to express deep gratefulness to all the coffee farmers in Yali, who devoted their time to long interviews, always greeting me friendly. In Guatemala, I would like to express great thankfulness to Alberto de Leon at Fedecocagua, who friendly welcomed me in Guatemala City, and helped me with the practicalities of the field work in Guatemala. In particular, I would like to express gratefulness to the technical advisors who assisted me with transportation and other means. And in particular, I want to express deep gratefulness to the coffee farmers of Guatemala, who friendly and welcoming devoted time to long interviews. I would like to express a particular deep gratefulness to my brother, Steffen Johannessen, who took time off from completing his PhD dissertation to assist me in the final and most stressful phase of writing. Your devotion and enthusiasm within the field of Anthropology has particularly inspired my work. ABSTRACT This thesis explores the Fairtrade network through analyzing Fairtrade coffee. The expansion of the Fairtrade network has led to increasing pressure and competitiveness of cooperatives in the Fairtrade market. The thesis analyze the impact of the increasingly demand of Fairtrade products and the move of the system to mainstream market through two certified Fairtrade cooperatives. The certified cooperatives studied are; a first level cooperative in Nicaragua and a second level cooperative in Guatemala. Furthermore, the thesis analyzes the value of Fairtrade coffee through exchange value, symbolic value and sign value. The economic exchange value of Fairtrade product is analyzed using the tools of a global value chain analysis. The varieties of meanings invested in the network, ie the sign value and the symbolic value, are explored by investigating how the structures of narratives are constructed among producers, consumers, and communication strategies. These I have labeled ‘commodity cultures’. The economic income from Fairtrade coffee is found to be highly centralized in consuming country, where importers/roasters have an income of about 74 percent, retail about 13 percent, Max Havelaar almost 3 percent, and producers around 4 percent. However, a larger share of income to producer country was evident in Guatemala, where the second level cooperative received almost 10 percent of total income. However, the income did not trickle down to producers in Guatemala, which received around the same income as producers in Nicaragua, around three percent of total income. The value of Fairtrade coffee is concentrated within the constructed meaning attributed the product and verified by a label. The constructed narrative of Fairtrade is based on selective stories of producers where Fairtrade is recognized as aid and creating connectivity between producers and consumers. However, the narratives communicated are not general representation of producers. According to my study, most producers had very limited knowledge of Fairtrade and did not see any direct benefits from the system. The selective stories are argued as communication strategies. Thus Fairtrade is not a de-fetishized product, where the narratives rather resemble commodification of new realms. v vi TABLE OF CONTENTS Acknowledgement............................................................................................................................... iv Abstract ................................................................................................................................................ v List of Figures ....................................................................................................................................... ix List of Tables ........................................................................................................................................ ix List of Images ....................................................................................................................................... ix List of Appendices ............................................................................................................................... ix Abbreviations ....................................................................................................................................... x Measures and Exchange Rates ........................................................................................................... xii 1.0 Introduction .................................................................................................................................................................. 1 1.2 Research objective ...................................................................................................................... 14 1.2.1 Specified objectives .............................................................................................................. 14 1.2.2 Research questions .............................................................................................................. 14 2.0. Background ............................................................................................................................................................... 15 2.1. History of coffee ......................................................................................................................... 15 2.2 the International Coffee market ................................................................................................. 17 2.3 Sustainability initiatives in the coffee sector .............................................................................. 21 2.3.1 History of Fairtrade .............................................................................................................. 26 2.3.2 Fairtrade in Norway .............................................................................................................. 34 3.0 Research methods ................................................................................................................................................... 37 3.1 Field work In Central America ..................................................................................................... 40 3.1.1 Development of field research in Nicaragua ........................................................................ 42 3.1.2 Nicaragua’s political economy in brief ................................................................................. 43 3.1.3 The cooperative El Polo ........................................................................................................ 46 3.1.4 Development of field research in Guatemala ...................................................................... 49 3.1.5 Guatemala’s political economy in brief ................................................................................ 50 3.1.6 The second level cooperative Fedecocagua ......................................................................... 52 4.0 Theory and analytical framework ...................................................................................................................