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The Impact of Fair Trade on the Living Standards of Farmers in Ghana Social Cooperatives and Corporate Cooperatives1

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The Impact of Fair Trade on the Living Standards of Farmers in Ghana Social Cooperatives and Corporate Cooperatives1 Bińkowski THE IMPACT OF FAIR TRADE THE IMPACT OF FAIR TRADE ON THE LIVING STANDARDS OF FARMERS IN GHANA SOCIAL COOPERATIVES AND CORPORATE COOPERATIVES1 Borys Bińkowski Abstract: Fair Trade is a complex movement, but its central purpose is to help disadvantaged small producers from developing countries through trade. The most recognized aspect of the movement is Fair- trade International, the biggest Fair Trade certification organization. The system was created to give advantages in international trade for farming cooperatives who decided to join the movement. Although in last 20 years of Fair Trade growth there have been many studies of the movement, there has only been one wide spectrum survey on the impact of Fair Trade on rural producers. Many others were concentrated at other aspects of the movement or were irrelevant. The research presented here is the first qualitative Fair Trade impact study conducted in Ghana. It also has a wide spectrum and is a part of broader ongoing research in two other regions of the world. Research was conducted to examine Fair Trade’s (in particular Fair- trade International’s) impact on farmers and communities in Ghana by comparing it to farmers and communities that do not benefit from the system. A qualitative study was conducted, based on 75 interviews, among them interviews with farmers of cocoa and oranges, members and employees of cooperatives, owners and employees of food com- panies and representatives of Fairtrade International. Observations of 5 villages and 1 small town, alongside the interviews conducted, resulted in the conclusion that there are no substantial differences in the standards of living between farmers which are 1 The research project was funded by the National Centre of Science (Narodowe Centrum Nauki) on the basis of the decision number DEC-2011/01/N/HS4/02146, and carried out by the Polish Centre of African Studies (Polskie Centrum Studiów Afrykanistycznych). 115 Modern Africa: Politics, History and Society | 2014 | Volume 2, Issue 1 members of cooperatives benefiting from Fair Trade and farmers from the comparison group. The research suggests that small cooperatives and big cooperatives function differently. Small cooperatives are operating in the interest of their members, while big cooperatives are focused on creating business potential. The study revealed that small cooperatives provide more benefits for farmers while the big ones transform into ventures similar to corporations. Key words: Fair Trade, Ghana, cocoa farmers, Fairtrade International, Fairtrade certificate Aim of the study The aim of the study is to test the differences in the development of com- munities and families (households) that use the solutions proposed by Fair Trade and those that sell their products on a conventional basis. It aims to answer the question: does Fair Trade guarantee an improve- ment in living standards? The second part of the study is a comparison between farming in big and small cooperatives. It tests the hypothesis that members of small Fair Trade cooperatives enjoy more benefits than members of big ones. Previous impact studies Valerie Nelson & Barry Pound (2010) examined 80 academic publica- tions and reports on various aspects of Fair Trade over a period of 10 years. Among them were 23 reports containing 33 impact studies of Fair Trade on producers or their organizations2. In the reported group there were no case studies of tea, cotton, cane, rice or nut farmers, though these are important crops that are already certified. Of the 33 impact studies 31 showed the positive effects of Fair Trade on producers3, but most of the studies were superficial and based not on field study but questionnaires filled in by boards and office 2 The majority investigating in coffee production in Latin America. 3 In 29 cases it was growing income, in 27 cases a stabilization of income, and 22 cases showed growing empowerment. 116 Bińkowski THE IMPACT OF FAIR TRADE employees of cooperatives rather than farmers themselves. Only two case studies concerned Ghana and cocoa, but these were also not very significant or not current. Among the three impact studies about Fair Trade in Ghana the most significant isMonitoring Impact of Fair Trade Initiatives: A Case Study of Kuapa Kokoo and the Day Chocolate Company (Ronchi 2002). How- ever, it was made at a time when the Fair Trade share of the whole turnover of the Kuapa Kokoo cooperative was no bigger than 10%, so the impact on farmers was not yet visible. The same assumption could be given to another study mentioned by Nelson and Pound, namely Overview, Impact, Challenges, Fairtrade... (see OPM and IIED), which was published in 2000. A more valuable current publication (which was not described in the review of Nelson and Pound) is Gorzka czekolada [Bitter Chocolate] (Popławski and Szeniawska 2013). It describes the state of cocoa production and trade in the neighbouring Ivory Coast. This is a com- prehensive source of information about farmers and their problems in similar social and economic situations to Ghana, but it lacks some important impact study data. The most significant and comprehensive study about the impact of Fair Trade on producers is research conducted by Sara Klier (2012). It contains six case studies conducted in five countries. One part of this study was carried out in Ghana. It was about one of the biggest Fair Trade cooperatives in the world (Kuapa Kokoo), whose members cultivate cocoa. The field research was based on questionnaires and interviews with cocoa farmers in one village. This study was the source of the reportAssessing the Impact of Fairtrade on Poverty Reduction through Rural Development (Klier 2012), in which the author observes that Fair Trade in Ghana is not very efficient and has several disadvantages: engagement of farmers in the decision- making of cooperatives is very low, benefits from Fair Trade tend to apply most to owners of farms, who may or may not be the actual farmers, and the Fair Trade impact on rural development is minimal4. 4 It is important to note, that the positive impact of Fair Trade on development in the other 5 cases was much higher than in Ghana and cocoa case. 117 Modern Africa: Politics, History and Society | 2014 | Volume 2, Issue 1 The study was concentrated in just one place, based on five days of field research, mostly quantitative and with some questionable methodology assumptions. The Sara Klier study5 is best treated as an introduction to a more serious and larger study. Research methodology A grounded theory method (GT) was used in the study. It assumes that the members of a society will know it best, and therefore the researcher should avoid bringing in prior theories and the confirmation bias that may result (Glaser, Strauss 1967). Using the grounded theory method, the researcher develops a theory of communities based on their own observations, supported by multiple interviews with various actors in society, and therefore the conclusions of the study are based only on the data collected. Research is based on qualitative field research collected in Ghana in November and December of 2012 and January of 2013. The basic re- search methods were interviews from a carefully pre-prepared script. The study was based on interviews with cocoa farmers divided into four groups. One was the control group, the second group consisted of members of the big cooperative (Kuapa Kokoo), a third consisted of the members of the small cooperative6, and the fourth was a group of many different people working with farmers. During the research 56 in-depth interviews were conducted with cocoa farmers, including 13 interviews with members of the cooperative AB- OCFA and 16 members of the cooperative Kuapa Kokoo. Five interviews were conducted with farmers of oranges, including the four members of cooperatives affiliated with Fair Trade. In addition, 14 interviews were conducted with representatives of the Fair Trade cooperatives, as well as representatives of the government agency Cocobod, a local cocoa agriculture researcher, and representatives of three certified private companies engaged in the processing of Fair Trade products. Altogether 75 in-depth interviews were conducted7. 5 Especially the part conducted in Ghana. 6 ABOCFA: Aponoapono Biakoye Organic Cocoa Farmers Association. 7 All interviews were registered. Wherever possible it was recorded (except 4 cases). All re- sponders were also photographed (except small portion of interviews with representatives of cooperatives and other officials). All of them agreed to an interview and to a photograph. 118 Bińkowski THE IMPACT OF FAIR TRADE Interviews with farmers were divided into three distinct parts. The first concentrated on the characteristics of farm work, the difficulties of farming, methods of cultivation and sales. The second concerned the quality of the farmer’s household life and in the majority of cases evaluation was based not only on the questions, but also on observa- tions.8 Members of Fair Trade cooperatives were also asked about the benefits of membership and their relationship with the cooperative. Furthermore, the interview script was prepared to encourage open answers from respondents and to provide additional information. Due to the individual nature of the interviews, the answers given by the respondents and the different nature of their problems, it was not reasonable to unify responses and reduce them to statistical indicators. Therefore all information collected was used as a part of qualitative study. Members and employees of cooperatives were not given the details about the planned research, to avoid the researcher being directed to pre-selected farmers9. All visits were conducted with random re- spondents. Besides interviews based on the script, unstructured short conversations with farmers and other local community members were conducted. Additional research methods included active observations of village life10 and less participatory observations11. Fair Trade principles Fair Trade (FT) is a global movement with producers in the global South and consumers in the North as the essential parts.
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