finance for QRQuarterly Return 53 Autumn 2004 www.shared-interest.com

Delivering the vision in Central America

Banana growers’ co-operative in Costa Rica. Photograph by Ruth Junkin.

Raising the profile of fair trade

It’s all about sharing people to people tours success Brian Condor of Traidcraft took this photograph during the first People to People tour of , a joint venture between Traidcraft and Crafts of Africa (as reported in QR49). In July and August this year 14 people from the UK took part in the 15-day tour, visiting a number of fair trade producers as well as the more conventional tourist attractions. The feedback was extremely positive: all participants said they would recommend People to People Tours and all wanted to go on another. The photograph was taken at Bombolulu, north of Mombasa, one of Kenya's biggest centres for the rehabilitation of disabled workers. Bombolulu has four sheltered workshops and over 160 employees who produce beautiful jewellery, using soapstone, brass, copper, semi-precious stones and even recycled drinks cans. Employees receive free housing or an allowance towards accommodation, fair wages, good working conditions, medical cover and help with school fees for the children. The workers are also involved in decision making with the management. The aim of the project is to help the workers develop as independent members of the community, having self respect and security. The man in the picture, called John, is carving a wooden nativity set (featured in Traidcraft's catalogue). www.peopletopeopletourism.com www.skedaddle.co.uk/p2p.asp fair fair trade news more outlets for zambian honey The organic forest honey gathered from tree hives in Zambia by the fair trade co-operative North Western Bee Products (featured in QR51) is now available in Holland and Barrett stores thanks to the increased marketing efforts of sole UK importer Tropical Forest Products Ltd. “Our aim is to greatly increase the number of sales outlets for this honey,” said David Wainwright of Tropical Forest Products. “Last year production doubled and, partly as a result of ’s loan, it looks set to double again this year.” www.tropicalforest.com fairtrade and organic - double first for fashion in selfridges The fair trade and organic cotton collection from People Tree is now available in all four Selfridges stores. This is a double first for the famous fashion store - first fair trade, first organic. People Tree is the trading name of the Fair Trade Company, based in Japan and the UK, which has been using Shared Interest’s credit facilities for 10 years. The garments in the People Tree cotton collection are made by Assisi Garments, a fair trade project in Tamil Nadu, , that employs 150 young women many of whom have speech or hearing impairments. People Tree works with 70 fair trade groups in 20 developing countries giving design and technical assistance to help marginalised producers overcome the barriers of selling their products. People Tree also funds village welfare projects such as schools and hospitals and supports the continuation of traditional skills and the use of local materials, thus helping to keep threatened rural communities and cultures alive. www.peopletree.co.uk

QR53 page 2 Aprainores cashew nut processing new to the clearing house plant. Photograph by Sara Velasquez

Two fair trade buyers TopQualiTea – UK and two producer organisations have been TQT produces a range of fairly approved to join Shared traded and organic teas from Interest’s financial India and . Teas are Clearing House since packaged by the producers and the last issue of QR. stored and distributed by the UK based company. The fair trade premiums paid over the years Fairwind Trading have enabled the plantation Company – UK workers and their families to environmental build schools and health centres to issues, which improve standards of living in led to a decline in Fairwind Trading has a shop in their communities. quantity and quality North London, selling a variety of www.topqualitea.com of honey, an incentive fair trade products, the most scheme was introduced to important being furniture from COADAP – Guatemala encourage the farmers to meet Java and Bali. Other products quality standards. Recognising include textiles, carvings and COADAP produces honey from the importance of ensuring buyer sculptures from producers in the Peten region, a large area of quality standards were met, LONDON FAIR Africa and the . The jungle in Guatemala with difficult COADAP now pays for TRADE FAYRE company hopes to be able to start access. COADAP sells all its technicians from the Ministry of purchasing from other producers honey to Gepa, a long standing Agriculture to meet the farmers to Shared Interest will have in India, Nepal and Central and Clearing House member based in improve production methods. a stall at a pre-Christmas Latin America in the near future. Germany. Following a period of fair trade event in Central www.fairwindtrading.com adverse climactic effects and Aprainores – London. Use the El Salvador opportunity to do some Christmas shopping and Aprainores is an association of buy some fair trade gifts cashew nut farmers who have on Friday 3rd and transformed abandoned plantations in eastern El Salvador Saturday 4th December and set up a new processing plant from 11am to 5pm at The which has the quality control and Emmanuel Centre, traceability levels needed for Mersham Street (behind organic certification. Westminster Abbey). See article on page 5 for more Nearest tube - information. Westminster. Admission http://perso.wanadoo.es/ £3 (concessions £1). Fairwind Trading Company’s London shop gbajolempa/aprainores.htm

NEW FACES AT SHARED INTEREST

There are three new faces at Shared Interest’s head office in Newcastle upon Tyne since the last issue of QR. Amy McIntosh is the new Team Leader of the Customer Service Team which is responsible for transaction processing and operations, credit management, sales and customer relationships. Previously Amy was a Team Leader at Newcastle Building Society dealing mainly with incoming and outgoing customer transactions. Amy speaks Spanish and French. John Grady is Shared Interest’s new IT Project Manager. John spent the last three and a half years in Ethiopia working as an IT consultant for the Oromia Regional Education Authority through VSO. Before that he worked in Switzerland on the Eurex derivatives market as a software developer and options trader. Simon Donnelly joins Shared Interest as Management Accountant. Previously he worked in Guernsey as an accountant, for Specsavers and for several offshore banks. He recently returned to a small organic farm in the Wear valley with his wife and three children. Prior to working as an accountant he was a civil engineer. Following a recent recruitment drive, Ben Lilley will be joining Shared Interest in November as Sales Manager. Until recently Ben worked for Diageo, based in West Africa.

page 3 QR53 Banana plantation in Costa Rica. The blue bags protect the crop from pests. Photograph by Ruth Junkin. delivering the

food producers in central america

In recent months Shared Interest has used two people with direct experience of the needs of producers in Central American countries to find out exactly what financial services would be the most helpful.

The two approaches were quite different. In Costa Rica Shared Interest engaged a consultant specialising in rural its produce goes to fair trade buyers. finance to produce detailed reports on Because of the regularity of harvesting selected fair trade producers who might bananas there is little problem with cash benefit from Shared Interest’s services. In flow. The main financial requirements are El Salvador a Traidcraft market access for renovation of old plantations and adviser was asked to make contact with a improving irrigation. producer organisation which had applied The sugar and coffee co-operative has to join the Shared Interest Clearing grown over 40 years into a major House. “In both cases we were asking economic force in the southern zone of “We are not appropriate people with local knowledge Costa Rica with over 8,500 members and to be the face of Shared Interest,” said Sue some 500 workers permanently employed in the Mayo, Shared Interest’s Business in the sugar refinery, coffee mill and Development Manager. supermarkets. Although the co-op’s business of sugar is FLO registered less that 2% of its COSTA RICA produce is exported via fair trade undercutting mechanisms. the local Shared Interest has engaged Ruth Ruth Junkin’s main conclusion is that Junkin of the Center for the Competitivity neither of these organisations would market.” of Eco-Enterprises to visit and research benefit from using Shared Interest’s credit the financial needs of four producer facilities in the exact way that they are organisations, all certified by FLO, the offered at the moment. Both have access Fairtrade Labelling Organisation. to credit in the local currency at a lower At present Ruth has produced two rate of interest than Shared Interest would reports: one on a co-operative of banana charge for providing credit in dollars. workers, the other on a larger Sue Mayo is not disappointed by this co-operative of sugar and coffee farmers conclusion: “Compared with many of the and other members.

The banana co-operative has 65 A worker pictured outside the members and 35 employees. All the Aprainores cashew nut members work on land owned by the processing plant. Photograph by Sara Velasquez. co-operative. The co-operative is a relatively small-scale producer in Costa Rica where four large companies account for 85% of banana exports. Almost half of

QR53 page 4 David Parker reports on the first examples of vision Shared Interest’s new ways of working with partners in developing countries - the Delivering the Vision project announced in QR52. Additional reporting by Sara Velasquez.

countries we work in, Costa Rica is quite Sara Velasquez lived for a number of years producers’ association has allowed us to developed. We are not in the business of in El Salvador and has a good understanding access credit that was not possible before” undercutting the local market.” of local conditions. She writes: ... said Fredy Lopez. “The problem is that The reports also make Aprainores supports 130 farmers and the rates of interest are very high - 16% to recommendations about the type of their families on the island plantation of 24% - and the repayment periods are very financial services Shared Interest could Monte Cristo. It also buys raw material short.” provide that would help these well from an increasing number of small I had the opportunity to see some of the established food producer organisations. holders in the wider region as well as work in progress. Two large deep fat For example, they would be interested in from another cashew nut co-operative in fryers were the first step in the process. larger long-term loans which they could the east of the country. It also employs 80 The outer shell of the cashew nut is access without using the Shared Interest workers in the processing plant. extremely tough, and also contains a toxic Clearing House for export credit. These The President of the Association, Fredy oil that is corrosive to the skin. Frying at and other proposals will need to be Lopez, said “The Association was formed high temperatures softens the shell. considered over the coming months. two years ago to take ownership of the The next stage is to break these outer processing unit and machinery and to shells. There are around 18 people EL SALVADOR move the business forward.” The plant working on this, armed with small heavy had been built and operated by the El stones, protective gloves and overalls. Shared Interest asked Sara Velasquez, a Salvadorian NGO CORDES. However, They sit at high benches in the main body market access adviser for Traidcraft, to CORDES was keen that the ownership be of the plant where the temperature visit Aprianores, a farmers’ association in passed to the producers. reaches 30 degrees C. Everyone sweats El Salvador that has been supplying Most of the raw material for the plant profusely. cashew nuts to fair trade buyers for the comes from a small island plantation in Underneath the shell of the nut there is last eight years. This visit was to be the the delta of the Lempa River, El a tough skin that must also be removed. final step in approving the latest producer Salvador's major river. During the civil Baking the shelled nuts in the member of the Clearing House. Shared war (1979-1992), the original estate oven helps this process. Interest staff first met representatives owners abandoned the whole area, and What follows is still the from Aprainores at Biofach (organic food during the land reforms that were part of most delicate part of fair) in February. the peace accords much of this area was the whole process, as distributed among ex-combatants, both Ana, one of the “This credit soldiers and guerrillas. workers As the land had been abandoned for explained: “From facility from almost 10 years, the new owners of the here on, the plantation saw the opportunity to certify processing of the Shared it as organic, in order to increase the cashew nuts value of their product. takes place in the Interest has The new plant has been sterile part of the running since 1998. The factory. I have to come just in layout has been designed use this sharp knife to ensure high levels to carefully take the time.” of quality. hard outer skin off. “The The most important formation of thing is to try and break as the few nuts as possible, as whole nuts are worth much more than pieces.” Vicente Carranza is the manager of Aprainores. “This credit facility from Shared Interest has come just in time as it allows us to leverage a little more working capital from our fair trade clients. We have so many plans for the plant and for the farmers, and access to credit is one of our major limitations.”

page 5 QR53 Photograph by Marcella Haddad THOUSANDS OF TRADE CAMPAIGNERS PRESS LABOUR courtesy of CAFOD More than 6,000 campaigners protested outside the Labour Party Conference in Brighton in September, putting pressure on Tony Blair to change the government’s unfair trade policies. Campaigners from all over the UK joined guests from Bolivia, Ghana, South Africa and India in a carnival atmosphere. Their message was that the government must act now to change its policies on trade - policies that are keeping millions of people in developing countries trapped in poverty. The event marks the start of a new campaign, Vote for , which will run throughout 2005 and aims to collect one million votes. More than 60,000 people have so far voted. Chancellor Gordon Brown used a fringe meeting organised by the Trade Justice Movement to announce the UK would pay off 10% of the money owed by 32 of the world’s poorest countries to the World Bank and the African Development Bank. This move will amount to £100m a year until 2015, and Gordon Brown was clearly intending to put pressure on the USA, Germany, Japan and other rich countries to take similar action. The Trade Justice Movement is a coalition of aid agencies, environment and human rights campaigns, fair trade organisations, trade unions and faith groups that represents nine million people. Shared Interest is a member.

and . But it is the Asia Fair Trade differentiate their product in the market place, IFAT Asia Forum that is developing fastest and has and be prepared to invest heavily to support already started to deliver business and market their brand. Food and handicrafts development and market access programmes must go together to send out a powerful In September 2004, Shared to its members through the Asia Fair Trade branding message. Interest Managing Director Centre of Excellence. These include IFAT Most readers will be familiar with the Stephanie Sturrock joined fair a model of technical assistance Fairtrade label that appears on various traders from all over Asia, and and training, product design is a global food products in the UK. This label, some guests from Europe, USA and development and network of over managed by FLO - the Fairtrade and Australia, for the support for attendance at 220 fair trade Labelling Organisation International Fair Trade mainstream trade fairs, International - is used widely in Association regional conference organisations in 59 like the BIG fair in countries. Most are many northern markets on in Hanoi, Vietnam. Bangkok (see QR50). food. But most IFAT southern IFAT is starting this producer organisations in organisations produce The conference reflected the diversity of regionalisation at the Africa, Asia and Latin handicrafts. In IFAT, there is Asia itself - a huge variety of cultures, same time as Shared America. Distributors of fair an ongoing debate on how languages and social and economic powers. Interest is beginning to trade goods in Europe, North producers and products are There were over 80 delegates - from Sri Lanka, internationalise its America and the Pacific represented in northern India, , Indonesia, Philippines, business through the markets (branding) and how Thailand, Nepal and China - representing Delivering the Vision Rim are also members. their fair trade claims are many types of fair trade organisations, mainly project. Both processes Shared Interest is a certified/verified (labelling). exporting handicraft products. will progress step-by-step, member as are most IFAT has developed a system of Professor Shyam Sharma from TARA and there are opportunities organisations it self assessment, with peer review projects in India opened the conference by for further developing the works with. and external verification, which expressing hope that professionalism in fair partnership between IFAT and allows members to use the ‘IFAT FTO trade gives us more opportunities. “Moving Shared Interest as the regions start mark’ on literature and materials (but not raising raising the profile of fair trade into the mainstream in foods has allowed us to to put in place their own secretariats. on products). Asia members of IFAT are keen combine quality and concept. Let us do this in for this mark to be developed into a strong FAIR TRADE BRAND non-foods [handicrafts] too,” he said. “Just brand, which IFAT members can use for and fair is not a compromise on quality and Professor Ranjan Mitter of the India labelling on products. excellence.” Institute of Management, Calcutta, called on The final strategy for the IFAT FTO mark IFAT has started to regionalise its activities. fair traders to recognise that the starting point will be decided at the IFAT biennial meeting in New bodies are emerging in Africa and Latin for marketing must be the consumer not the Quito, Ecuador, in June 2005 when all the IFAT America, with others expected soon. Country product. The consumer is now global and regions have given their views on how the bodies are also emerging in India, Philippines competition means that FTOs must mark should be used.

AWARDS FOR FAIR TRADE INNOVATORS

Three members of IFAT, the International Fair Trade Association, have been selected as ‘outstanding social entrepreneurs’ by the Schwab Foundation for Social Entrepreneurship. Meera Bhattarai (Association for Craft Producers, Nepal), Farouk Jiwa (Honey Care Africa, Kenya) and Safia Minney (People Tree, Japan/UK) were three of the 13 award-winning individuals/organisations out of 100 candidates. The Schwab Foundation for Social Entrepreneurship is an international non-profit organisation based in Geneva, Switzerland. It aims to identify and provide recognition for outstanding social entrepreneurs around the world whose work has significantly improved people’s lives. Safia Minney (People Tree, Japan/UK)

QR53 page 6 it’s all about sharing reflection by Colin Crawford, Shared Interest’s Operations Director, who retired on 30 September 2004 We have all heard the sayings that Photograph by David every journey, no matter how long, Ransom for Cafédirect, begins with a single step and that it is courtesy of Traidcraft better to travel than to arrive ... Eight years ago when I joined Shared Interest I took my first step on a fair trade journey and I am still travelling. Many of my companions along the way have help expand sales, the pineapple and banana producers - I dedicated their lives to purchase of computers, wonder who Shared Interest will be helping others. In digital imaging, talking to tomorrow? Africa, Latin communication What about the memories along the America and Asia equipment and way? I long ago realised that it is not the they have been other assets and places you visit that are most important; southern expenditure it’s the people you meet and I’m not producers, which will help going to mention one or two because that dedicated to producers grow would be unfair and to mention everyone improving the and develop their I would like to would fill Quarterly lot of their Colin Crawford businesses. Our Return so back to these memories ... I picking tea in Kenya Commercial Order was stung by bees in Mexico, bitten by families and earlier this year dependents. In the Export Credit ants in Uganda, involved in a Baby-Taxi UK, Europe, North product has enabled accident in Bangladesh, picked tea and America, Japan, producers to source bananas, planted coffee bushes Australia and New Zealand orders from commercial or and tried my hand at carving my fellow travellers have been non-fair trade buyers in the wood and soapstone (it’s organisations campaigning for trade and knowledge that Shared Interest will help more difficult than you social justice and fair trade buyers them fulfil the order by providing the think) but perhaps a working to expand fair trade, designing, pre-finance they need to purchase raw couple of my most Eight years marketing and selling a very individual materials and pay the workers when the poignant range of products, each one of which, if handicrafts have been completed and the memories were ago we we listen, tells a story of heartache and foodstuffs have been gathered and being asked to hope. Within Shared Interest I have processed. As far as buyers are say the Selkirk provided credit shared my journey with our members, concerned we now provide credit Grace before the directors, council members, our facilities to almost every major fair trade enjoying a meal facilities only representatives and my staff colleagues – buyer worldwide. We have helped them under a Kenyan they have been inspirational. expand their businesses and they in turn evening sky to eight buyer That’s the road I have travelled but have enabled us to reach the producers covered in stars how have things changed? Remember who need our help. and receiving a organisations that Shared Interest’s mission is to How has Shared Interest changed? The gift of a few of finance fair trade. Eight years ago we total of members’ funds that we need to grains of sugar when provided credit facilities only to eight do our work has more than doubled; staff I visited the home of a buyer organisations. We are now lending numbers have quadrupled as new skills wonderful women in the directly to almost 100 fair trade are required and like all growing slums of Bombay. She had organisations and working with around organisations our systems are continually nothing else to give me but insisted 400. Products introduced during the last being updated to keep pace with the that I could not leave her home without few years such as our producer Term demands placed on them. We are receiving hospitality. Loans have enabled us to finance the constantly in discussion with producers I think my last memory sums up fair purchase of trucks, kilns for firing and buyers who need our help or who trade - it’s all about sharing. ceramics, the bulk purchase of raw can help us fulfil our mission. Recently I will miss you all but I am sure our materials, attendance at trade shows to we have been talking to fair trade tea, paths will cross again. page 7 QR53 comment & feedback

Welcome to the new look QR. It’s been This is your opportunity to express your views about Shared three years since the last design change, in Interest and the work we are doing on your behalf, and to How does it work? debate with other members. which time there have been big changes in Write to QR Editor, Shared Interest, 25 Collingwood Street, Unlike some regular mailings which I the campaign for fair trade, the market for Newcastle upon Tyne NE1 1JE receive, each QR is read with interest. Shared ethical investment and in the way that or email to [email protected]. Interest seems to be an example of making a Please mark your letters ‘for publication’. Letters may be edited. Shared Interest works. little go a long way effectively and the stories reported in QR are heart-warming. Fair trade foods are now mainstream What QR seems to leave unsaid, and about products widely available in supermarkets, Not an investment which I would like to know more, is what and the range is growing rapidly. Two major When I joined, I understood that Shared happens between the time money is received fair trade companies, Cafédirect and Interest wasn’t really a friendly society like by Shared Interest from a member and the Traidcraft, have had very successful share others - it’s basically a spiritual thing - doing time when the loan to a producer is repaid to issues. The market for ethical investment is God’s work in a most practical way - but its source. booming and becoming increasingly ‘investment’ for ourselves it is not! It’s a How is a loan negotiated and who makes professional and competitive. purely ‘lending’ enterprise for which there isn’t contact with whom, and by what means? actually any return. Rock bottom interest Shared Interest has kept pace with these How is the loan made available? How do paid to us enables a loan to a Third World producers negotiate their contracts with developments and has improved its enterprise at a nominal interest rate - the buyers? marketing and promotional materials. purpose of which is to finance the basic I write in anticipation of learning more After years of decline, membership is mechanics ‘at base’ of the banking processes about how the assets of Shared Interest are starting to grow again. If the new look QR and to pay necessary salaries. It is not meant used to help impoverished producers. attracts new and younger members the to be ‘profit making’. Peter Van De Kasteele small increase in production costs (which I The whole concept is attractive on this am sure some readers will question) will basis. It is a way of ‘sacrificial giving’ if you Stephanie Sturrock replies: have been an excellent investment. like. A ‘charity’ in which we lend rather that give a donation. We are investing in people Shared Interest’s main credit product is In the last issue of QR we announced that and the ‘return’ is a rise in their living short-term trade credit provided through the Shared Interest was planning to improve standard, not ours. Clearing House for fair trade buyers and the way it connected with producers ‘in the Lynda Barbour producers. A full explanation of how this works field’ - a project called Delivering the Vision. is on our website and in our most recent annual This is now moving ahead. There have been report. various organisational changes at the head Before a credit facility is set up, we carry out office including the creation of new jobs, Responsible consumption a number of checks on the finances, and Shared Interest has started to work I warmly thank David Wainwright for his management, structure and fair trade values of with new partners in developing countries. reply to my letter on the environmental cost the organisation. Most of the organisations we The first reports from a rural finance of plastic buckets (QR52). My question was work with are members of the International Fair specialist in Central America are already asked out of genuine curiosity and I am very Trade Association (www.ifat.org) or on a Fair Trade Labelling Organisation International indicating that Shared Interest may need to sorry if I gave the impression that I disapproved of the beekeepers’ efforts to (FLO) register (www.fairtrade.net). adapt its ‘finance for fair trade’ services. improve their livelihoods. I completely agree Producers negotiate contracts with buyers Banana growers in Costa Rica and carvers in that 10,000 buckets are insignificant completely independently of Shared Interest. Kenya may both be fair trade producers, but compared to Western overconsumption. My Because producers have access to credit and their financial needs are very different. general point was simply that if we are they know that fair trade buyers are prepared to David Parker,Editor mindful of our impact on the environment, pay a fair price for their goods, it gives them we may come up with benign alternatives or more confidence when negotiating with other Shared Interest is a financial co-operative. It uses we may decide that the impact is justified. commercial buyers. the pooled investments of its members in the UK Perhaps the purpose of fair trade is to Once an order is made and Shared Interest is to effect real and lasting improvements to people’s lives in poorer parts of the world. enable producers in developing nations to notified, we advance the funds, normally in US increase their quality of life whilst dollars, to the producer by electronic transfer Shared Interest Society Limited safeguarding the environment. And perhaps through the international banking system. 25 Collingwood Street, environmental concern is sometimes a luxury Normally we send around 50% of the order Newcastle upon Tyne NE1 1JE enjoyed by affluent people. I am sure I can value up front on behalf of the buyer, but we Telephone: 0191 233 9100 Fax: 0191 233 9110 www.shared-interest.com sometimes be a hypocrite. can advance up to 80% of the order value on Western governments are probably not the producer’s account if they have a facility Quarterly Return is the newsletter of Shared doing enough to facilitate responsible with us. The funds are repaid to us by the buyer Interest Society Ltd, which is registered with the consumption. But we can minimize our use once the goods are delivered. Registrar of Friendly Societies, number 27093R. of cars and aeroplanes and we can buy local Funds not currently lent out are held with the The views expressed in QR are not necessarily those of the Society. QR is edited by David Parker, food and object to excessive packaging. And Co-operative Bank, with mutual building designed by Alpha Communication, a workers’ we can enjoy fair-trade tea, bananas, and societies in the UK or with social finance co-operative, and printed on recycled paper. honey etc. thanks to the efforts of producers institutions (like Ecology Building Society and

CURRENT INTEREST RATE and fair-trade companies. Triodos Bank). from 1 December 2002: 0.5% A J Smith