This project is about a human activity system which
entails the description of 'Fairly Traded' coffee from producer
to importer through a complex, dynamic chain as a commodity; from
the developing world to the developed : Tanzania to Denmark.
Analysing this specific chain entails an approach that encompasses a variety of factors, levels, domains and an understanding of how it has developed into its present state, which entails a review of the world processes currently in action. Globalisation is consequence of modernity. "Globalisation refers essentially to the modes of connection between different social contexts or regions becoming networked across the earth's surface as a whole. It is thus defined as the intensification of world-wide social relations which link distant localities in such a way that the local happenings are shaped by events occurring many miles away." (Giddens, 1990).
Processes of change have culminated into one; the process of globalisation, implying a qualitative change from the state centred human activities of previous eras to the new times: a global era. In recent years we have witnessed the complete transformation of our world in the form of a New World Economic Order, that has been occurring since the end of World War Two, but which quickly became disorder after the break up of the Cold War. Suddenly nation states fell into disarray, having to build on their own internal economies (especially in the case of Eastern Europe); consequently, Third world countries, once used for pawns in the power game between East and West, were neglected and cut off from global development. Rural economies collapsed. The 'West', grew richer and more powerful in economical terms than ever before, dominating world markets. The North-South divide has been growing at an alarming rate ( its roots derive from colonisation). This global gap can be seen in terms of economies, social characteristics and levels of technology, infrastructure etc. The result is a dependency relationship that the developing world has on the developed world.
Today, Africa's position in the world economy is
more important than it has ever been before. This is emphasised
because Africa is on the periphery of the economic market, in
fact more so than any other continent. Its future is shaped by
a global economic crisis of excess industrial capacity, economic
contradiction, and depression. Neo-colonial control is a term
currently used to define this kind of domination. Agricultural
economies are severely effected by natural disaster, disease,
failed harvest etc. Countries that are highly dependent on one
or a small number of export commodities are vulnerable to demand
and price fluctuation on the world market. An increase in the
price may bring temporary prosperity, but also may bring higher
inflation and debt that accentuates the effect of subsequent price
declines. There are limits to the ability of traditional systems
to cope with rapid externally induced change. We come to the point
then of the interconnection of the world today - 'one world'.
Their struggle is related to our comfort. There is a growing tendency
that world no longer consists of far away places which we (the
developed world) know little. The media used as manipulative tool,
has greatly influenced awareness as to the current situation of
the disparities that lie between us and the developing world.
Awareness of these processes of change is occurring, more than ever for development agencies. In the developed world, we are increasingly concerned now for the Earth's natural resources which have been depleted and put under risk by the desires for economic supremacy. The environment was (and still is) seen as a central issue in Third World developments of: Governments, aid, donors, researchers etc. The general development ideologies that have been imposed in developing countries over the past few decades to try to encourage development (albeit short term) and reduce the gap between the rich and the poor in essence, have not been entirely successful. "The 'Top down' approaches of previous decades failed in most cases e.g. Mechanisation in the 60s, in the 70s there was Maoist thinking in some of Africa, in the 80s Environmentalism ." (Niels Jensen, 1996) Now Post-Environmentalist concepts are being implemented into development strategies that encompass a broader range of factors over a longer period.
"Developing countries saw discussions of global resource management as an attempt by industrial nations to take away control of their resources. They feared the environment was a too high a priority compared to development."(Johnson, 1996)
'Sustainability' can be viewed the recent buzz word that was made popular after the Earth summit in 1992, Rio de Janeiro " development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (p.43, World Commision on Environment and development, 1987 report). This post modernist ideology now encompasses three interrelated aspects that reflect the long term goals of society: social, environmental and economical. Sustainability is currently used explicitly to smooth over the current dichotomy between growth based industrialisation and associations with adverse environmental impacts. The notion of sustainability has its roots in utilitarian resource management (practicality); in the technocratic concept of sustained yield (the level of extraction that could be maintained without lessening future levels). Some of the problems in definition and in practice, with the idea of sustainable yield are also problems with the broader idea of globally sustainable development, particularly those posed by the continual re-evaluation of resources by technological change. The idea has also come under attack from those who see the Malthusian theory - 'Limits to Growth' making further development as usually understood in terms of economic growth and sustainability being mutually exclusive. " Others have criticised sustainable development as a convenient formula used to maintain the notion of growth and development as a way of avoiding or finessing intractable questions of distribution."(Emel, 1995)
Sustainable development can be seen as conceptually
elusive, however, it has provided a focal point for discussion
and debate in the chaotic realm of global change, and a reminder
of the need to integrate questions of environmental conservation
with those of livelihood, especially in the developing world.
The sustainability of the human species can only be defined, ultimately
at the level of interaction between the entire complex of human
systems and all directly implicated environmental systems. Human
beings are at the centre of concern for sustainable development.
Fair Trade is a product of new age thinking. It encompasses a wide range of variations but we have chosen the Max Havelaar Foundation. Coffee was chosen as our commodity to study as it was the first product the organisation had connection with. Max Havelaar originated in 1986 from the co-operation between a group of catholic priests and Mexican organic coffee farmers. These farmers expressed the view so often heard in the developing world today, that they would prefer Fair Trade, not charity. Working with the Dutch church group Solidaridas, they formed the agreements for trading of coffee on a fair price basis for the producer. These agreements laid down the foundation for what became Max Havelaar. What is interesting for us is that Fair Trade has promised something else. It is attempting to change underdevelopment into sustainable development. They work from a 'bottom up' approach.
We want to look specifically at the approach in which the organisation has taken to redress imbalances and achieve sustainable development through trade , not aid.
The main goal of Max Havelaar is to promote sustainable development for developing world producers through Fair Trade practices. Sustainable development however, has proven conceptually elusive, therefore we are specifically looking at how the Max Havelaar foundation interprets it, as reflected in the organisation's goals and objectives. The Max Havelaar version of Fair Trade seeks to implement sustainable development through improvements in the social and economic basis of the producers over a long period. This should enable them to live in a manner which doesn't undermine the natural basis of production, which they are dependent upon. Hence the Max Havelaar initiative doesn't under-prioritise the ecological aspects of sustainability, but it's strategy for achieving it is by focusing on economic and social improvements. Their work respects the self-determination i.e. indigenous knowledge and cultures of producers and builds upon it. There is also a global dimension in this interpretation - that the sustainable development of the developing world producers is thus impossible to achieve without the active participation of the consumer in the developed countries.
Max Havelaar functions as a facilitator of change in this development process; they attempt to decrease the economical and social gap between coffee producer to importer by bringing them together via elimination of the middle-men. The organisation are constantly altering their demands to suit short term development criteria, however the long term ideologies stay the same. They also function both as a control organisation and promoters of the Fair Trade concept in the consumer countries. More specifically, it puts demands on the importer and demands and objectives on the producer. Hence, the importers must live up to specific requirements, e.g. paying the farmer a minimum price on coffee as set by the Food and Agricultural Organisation (FAO). The producers also have a set of objectives and demands to follow, and extra profits from the coffee to enable this, basically to strive towards an organically based, diverse ecosystem. Max Havelaar for the most part sees the development process as an active dialogue with the producers. Decisions connected to development are not dictated from above; instead, the Fair Trade initiative represents a 'bottom-up' approach, respecting the rights of people to make their own decisions and thus respecting their dignity and cultural traditions.
Our intentions with this project have been to locate and describe various barriers to the Fair Trade concept (as practised by Max Havelaar ). This has been interesting to us as we wanted to assess the implementation of ideologies through sustainable development plans by Max Havelaar. The KCU is considered a 'problem child' (from what we have discovered), due to the economic, structural and democratic elements present, which are typical for African Co-operatives as compared to the more advanced ones that the organisation work with in Latin American. It is consequently more difficult to enforce development demands on cases such as this because the basis to begin with is so far from the intended goals. In this case the coffee grown in the Bukoba and Muleba districts ( North West Tanzania) and sold as Fair Trade coffee in Denmark. In order to identify these barriers, it has been necessary to describe and gain an understanding of the specific coffee commodity chain (albeit long and complex)- from the producer, through the market and to the importer in the background to our case study.
Firstly, we have seen it as important to.
Secondly, we evaluated in more depth the chosen case study in Tanzania by:
There are multi-factorality dimensions in all systems which we have endeavoured to cover in our analysis of the case study. It must be noted that there have been a number of elements which we either have not researched in our study, or in other cases only have dealt with superficially. We have not had the time and capacity to include a study of several factors involved in the coffee commodity chain. However we do recognise their role in each part of the system, but have stated the reasons for excluding them throughout our work. Listed below are the main points we do not research in great detail:
This study has been developed through a geographical perspective, namely looking at modes of production in the given dynamic and complex system (a human activity system) on a variety of temporal and spatial scales. We have mainly taken on a structuralistic approach to this project, although inevitably humanistic philosophies are drawn upon as the nature of human interaction in the commodity chain effects outcomes throughout. The epistemology of structuralism is that the world of appearances (that which is apprehended ) does not necessarily reveal the world of mechanisms (that which causes the world of appearances). Its ontology is that what really exists (the forces creating the structures), can not be observed directly, but only through thought. Its methodology involves the construction of theories which can account for what is observed, but which can not be tested for their veracity because direct evidence of their existence is not available.
By using a 'systems theory' approach (the method of analysis) as defined by many geographers and scientists alike, we have taken information from different disciplines and domains and integrated them into our analysis and discussions. This was chosen due to the fact that we are dealing with a global process and we will be looking at local transformation, which is as much a part of gloablisation as the lateral extension of social connections over time and space.
A systems approach involves placing as much emphasis on identifying and describing the connections between objects and events , as on identifying and describing the objects and events themselves. Changes in one induce changes in another aspect of the system. In our case this is linked in a chain of cause and effect. The system we analyse is an 'open system' which exchanges flows with its environment. These flows can consist of materials, energy or information. In the context of the commodity chain, the system can be outlined in three stages: Emergence (at a regional level), Hierarchical control (at a predominantly international level), and communication (through a facilitator at all levels). We need to take an underlying factor (Max Havelaar's version of sustainable development) and firstly analyse the existing structure of the system in theory - the background. Secondly another model system is defined (reality) that behaves the same way as theory using empirical information to ensure it has the same parameters and conditions - the case study. Thirdly, reality is placed into the theory model to help us answer questions and generate information under given scenarios to predict future consequences (discussion). Complex systems (such as the one to be described) generate outcomes that depend on numerous interactions. As a result many are highly sensitive to the precise starting conditions and loading factors i.e. the indigenous agroforestry system. We have intended to map out the number of dimensions ( in terms of barriers and/or risks) involved, especially identifying trade offs involved in the development process.
A sustainable assessment map (a decision-making graphical
tool for potential analysis) can sometimes be formed to assess
cost-benefit analysis results, however we have chosen not to do
this as our topic is too abstract. The implementation of the sustainable
development plans through Fair Trade (as defined by Max Havelaar)
would be impossible for us to research given our capacity. These
delimitation's include, time, resources available ( e.g. some
information is classified and we have been unable to access it
from organisations), and of course ability to research in the
Kagera region. Instead, we have designed certain scenarios ( in
the discussion) as a framework within which to discuss the implantation
of Max Havelaar's sustainable development plans to meet the needs
of the producers in Bukoba and Muleba and the importers in Denmark.
The systems theory approach represents a reasonable compromise
between the need for a more open, transparent and accessible decision
making and a need for a better informed and more focused discussions.
In order to get an understanding of the Max Havelaar's comprehension of Fair Trade we felt it necessary to interview a representative of the organisation. We found out that the Max Havelaar branch in Holland is the one responsible for the organisation's Fair Trade with co-operatives in Tanzania. We talked (on the phone) on a number of occasions to Jos Harmsen who is the product-supervisor for Tanzania coffee Max Havelaar (Holland); he gave us specific information about the Kagera Co-operative Union. Furthermore we interviewed Nina Schiøtz, General-Secretary for Max Havelaar Danmark; Niels Jensen, product-supervisor for Safari coffee at U-landsimporten. Our intentions with these two interviews were in part to gather information about aspects of organisational structure and how the two organisations function on the Fair trade market. Furthermore, it was our intention to assess differences in ideals between the organisations; how they view the different demands/objectives for the producers and importers; how this relates to the general Fair Trade goals of promoting positive social change for coffee growers.
Qualitative interview methods as according to Keld Buciek (1995) proved valuable to put our interviews into a scientific research context. We regard qualitative research methods as a tool to be used in investigating our topic. In this case we have only used qualitative research methods to help us prepare, conduct and analyse the interviews. The main purpose of using qualitative interview methods is to obtain an understanding of Fair Trade etc. as seen through the eyes of the interviewed persons. We are aware that conducting interviews is a two-way process during which the interviewer gains an understanding of how the interviewed person see himself in the midst of things.
Another very valuable source of information has been
Rolf Belling, who is RUC's main authority on coffee. He is a member
of the Board for Max Havelaar Foundation and for U-landsimporten.
Margit Kelgaard and Carsten Fogode from U-landsimporten have also
given information from informal interviews over the phone. Kirsten
Reil, from Hamburg Coffee Company was also a useful source for
information about importing.
We have based part three - the case study, solely on a literature study. The literature we have used has ranged from articles to larger reports, based on geographical studies of the inhabitants of the area and their farming system, including the cultivation of coffee (dating from 1969 -1995). Much of the data of the demographic structure of the region was over ten years old. This is problematic when trying to assess the present situation, as large population growth and migration between areas is believed to be occurring today (according to Max Havelaar sources). We realise that even the data we could access was possibly incorrect, due to the difficulties of data collection in the region itself, which has a poor infrastructure. Despite these limitations, we have been able to gain an insight into the indigenous culture and describe some trends which are relevant in the conclusions we have drawn.
We would have preferred to conduct some interviews
with people in the Kagera Co-operative Union, as the written information
we have about the co-operative is scarce, and has at times been
contradictory. A field trip may have given us a better insight
the effects that Max Havelaar have had so far in the region and
a better understanding of the agricultural system. Instead we
gained secondary qualitative information from the interviews in
Denmark and written material, which was as valuable as first hand
observation in connection to our understanding of the functions
and internal ideologies held by the representatives. The information
has proved very useful throughout, while interpreting and using
it in the project has been challenging as we realise that it is
biased to a certain extent. Some of the information which we received
during the interviews and telephone calls proved to be of a sensitive
nature, therefore presenting us with problems as to how, or if,
it could be used in the project-report.
We are consequently aware of the limitations to a
study based on such information, however we have attempted to
compile a comprehensive and cohesive description of the farming
system as it is today as accurately as possible, and the implementations
of Max Havelaar as a facilitator in the fair trading of their
coffee. Analysing this subject in the framework we have developed
entails an outcome that can not concretely conclude any one overall
factor.
The traditional agricultural systems found in Tanzania, and indeed throughout most of East Africa, have come under pressure as they have been incorporated into the world economy in recent decades. This process has centred on the commodification of agricultural products. What this means is that the value of crops, as determined by their localised use of food or materials, is replaced by a value determined by market forces. Once this new (capitalist) form of production is established, those dependent on agriculture lose all control over the determination of the value of their products. The process of incorporation into the global capitalist economy thus introduces a new form of production, as well as new crop complexes and new methods of cultivation.
This chapter explores why coffee is an unstable income for the producer on the world market. This is done by illustrating the structure of the coffee market and factors influencing the mechanisms of this complex system. This is done to outline the differences in the further development of our understanding of the framework of how fair trade functions on the world market.
The coffee market is a very unstable market and yet an important source of income to many people in the world. According to UNCTAD 1995 this entails almost 10 million people in the producing countries. Many of the countries in the developing world depend to a high degree on coffee as an agricultural export commodity; in the case of Tanzania, over one quarter of export earnings stem from coffee.
The structure of the coffee market is a reflection
of the growing gap between the developed world and the developing
countries. Most of the coffee produced is destined for export,
but a great deal of the overall earnings from coffee end up in
the possession of the processing, trading and manufacturing businesses,
which for the most part are TNCs in the developed world. The coffee
producers are to a high degree agrarian nations and do not have
the resources of competing with the TNCs of the developed world,
and as a consequence of that only 5% of the coffee exported out
of the producing nations in 1994 was processed. (UNCTAD, 1995)
Besides that the developed world has put up barriers in order
to protect their processing and manufacturing industries. This
hinders the initiative towards industrialisation in the developing
world, even though the coffee producers this way could benefit
from this.
There are multiple factors affecting the instability of the coffee market prices which producers as mentioned in the UNCTAD report, 1995 on recent trends on the world coffee market:
Uncertainty of production volume. The coffee market is dominated by Brazil whose production amounts to nearly 30% of the world's production. Whether Brazil has a good or a bad harvest is dependent on the climate, especially frosts can be damaging to the size of the harvested crop in Brazil. Historically Brazil dominated the world market to a greater extent, but the fluctuations in the production opened the market for other producing countries, e.g. in Africa and Asia. The fluctuation in the production is reflected in the prices, even rumours of frosts in Brazil has a significant effect on the world market price. There are other factors affecting the coffee production, but we will look into that later on recent trends in the world coffee market:
Levels of stock of coffee in the consuming countries can have a depressing effect on the world market prices.
Low supply elasticity in the coffee supply, which means that the producers have little potential of changing supply as a reaction to variations in price. (We will get back to this later in this chapter.)
Speculation also has an impact on the coffee prices. A shipment of coffee is subject to several buys and sales on the stock market, especially speculation on the Futures market has an effect on the already fluctuating prices. The speculators can make big profits on price fluctuations and as a result of this there is a tendency to over react on events affecting the coffee supply.
Consumer habits have changed during the last ten years. There has been a reducing demand for Robusta and increasing gourmet market demand for Arabica, as Arabica is of better quality than Robusta. The price on Arabica is relatively high compared to Robusta. This is reflected in the fact that Arabica accounted for over three quarters of production and the rest was Robusta. Besides that consumption of coffee might suffer due to competition from other popular developed world taste demands.
Low demand elasticities means that the consumption
of coffee is more or less constant and can not be varied by a
changing the production volume.
The above mentioned factors implies that the coffee market is a very insecure income for producers especially small producers like Tanzania as they only produce little under 1% of the world's production (see appendix 'Green coffee total production table). This fact combined with their dependency on coffee as an export commodity make Tanzania very vulnerable to the fluctuating prices on the world market. The coffee producers are often in a bad shape macro economically and do not have the means of single-handedly trying to influence the prices on the world market thus international co-operation among the coffee producing members is called upon.
The factors mentioned earlier having an impact on
the stability of the price movements means that the price on coffee
varies greatly from one year to the next, indeed from month to
month. This is reflected in figure a which illustrates the annual
average prices of other mild Arabicas, Robustas and a composite
indicator price for those two over a twenty year period. It is
a good example of the adversity that has dominated at least the
last three decades of coffee trade. The figure shows not only
the prices from year to year, but has also an example on the adversity
within a year, in this case the monthly average price from May
1994 to April 1995. It shows clearly that the fluctuations make
the coffee market appealing to speculators, and at the same time
an unstable form of income for the coffee producing nations.
Figure A:
Source ICO Coffee Newsletter, Number 2 (draft issue), April 1995.
The reason for this is simply that the coffee producing
nations can not increase their income in the long run by increasing
production. The number of consumers are fairly stable so an increase
of production would result in a pressure on the coffee price,
this, however, is seen on a global economic scale.
To show how much of an impact the price fluctuations on the world market would have had on Tanzania we would have had to take into consideration the exchange rate of the Tanzanian Shilling (Tsh.). This would show even greater fluctuating prices. Furthermore if we wanted to see how much of an impact this would actually have had on the Tanzanian farmers we would have had to compare the prices in Tsh. to their actual purchasing power. This you would have to do in order to take into consideration the heavily overvalued exchange rate by the Tanzanian government until 1986, the export taxes imposed on the farmers etc..
A decrease in the world market price leaves the small-holder
coffee farmer in Tanzania with the following options in order
to uphold his income:
Over the last two decades there have been low incentives
for the coffee farmer to implement the above mentioned measures,
not only as a result of fluctuation of the prices on the world
market but also due to internal economic and social policies induced
by the Tanzanian government.
The coffee production of Tanzania only makes up a small percentage of the world production, and the mentioned price fluctuations makes investing in coffee production unappealing to the Tanzanian small holder. This could, however, be changed through a renewed interest in coffee production as a form of income through Fair Trade.
The exchange rate between US $ and Tanzanian shilling (Tsh) has also played an important role through increasing the fluctuations on the actual price received by the Tanzanian farmers on export crops. This in turn has of course had an effect on the incentives to grow coffee. However this will not necessarily have an effect on the living conditions of the farmer since the result of low product prices often just means that the farmer will focus on growing other types of crops, in most cases subsistence crops or crops for the local market.
The adverse trend in coffee prices has had a negative
effect on the producers countries (an example of deteriorating
terms of trade occurring in third world commodity exports). Especially
those third world countries for whom the coffee is the primary,
and often only, real export product. For this reason coffee production
has often been heavily subsidised because of it's importance in
getting foreign currency into the country. World market prices
for African primary products has been in decline which has had
negative effects locally as well as nationally. Local self reliance
is being endorsed at a time when foreign investment (aid) to Africa
continues to be reduced and there is increasing emphasis on balancing
national profits (in developed countries). This has been the trend
since the end of the cold war, as developing countries are no
longer used as pawns for power by the First world nations and
so have since been neglected in terms of inward investment.
In Tanzania the broad objective of the governments agricultural policy on exports has been, throughout the seventies and eighties, to expand the export of crops by offering remunerative fixed producer prices to cover cost of production and by providing assured markets (Bevan et al, 1993). These fixed prices to the small farmer is essential for an expansion of cash crop production, which is needed to secure support to national economic development (Bevan et al, 1993). In the case of coffee the cess (tax) was increased to generate government revenue (Bevan et al, 1993). Until the mid 1970s the price for coffee was closely related to world market prices after which the coffee price was subject to a substantial export tax. As a result of this tax the boom on coffee prices between 1975 and 1977 did not generate an equal increase in income for the small producer. The reason for this was that the tax rates were not adjusted for inflation and therefore rose rapidly. In real terms this meant that the real producer price rose only 10 per cent in the years of the coffee boom (Bevan et al, 1993). During this same period the world market price was increased by almost 500 per cent. Although it is hard to give an exact account for how much the Tanzanian government got through export taxation, and how much went to the TNCs and the middlemen, as well as the first world manufacturers and retailers, it can be said that the Tanzanian farmer suffered the most.
Over the last decade the role of the Tanzanian producers
has transformed from a parasitically reliant entity to a progressively
autonomous group that is viewed individually, rather than under
state control. Today the farmer is now an important actor in the
free international coffee market. As a result of this role change
they are now empowered with the ability to interact within the
global market as individuals, without depending on the state as
an intermediate. At the same time they have become increasingly
dependent on market price fluctuations, which consequently could
lead to their downfall.
As mentioned earlier only a small part of the overall earnings from coffee end up in the hands of the producers. Import tariffs in the developed world on processed coffee from the coffee producers furthers, as we see it, an unfair trading system. Unfair trade as defined in the traditional liberal economic sense has to do with the protection of the nation's own trading interests through limiting import policies or subsidising important export commodities. This concept can not be used for defining unfair trade when we try approach a sustainable trading relationship between the developed world and the developing countries. The developed world sets the agenda in the UN and other important global organisations in accordance to its own interests. Therefore countries in the developing world and consequently the coffee producers have to create organisations among themselves to ensure that their voice is heard.
Today two main international organisations provide the framework for co-operation among countries with a main interest in the coffee world market. One of them, the Association of Coffee Producing Countries (ACPC) looks after the interests of coffee producing nations (UNCTAD, 1995), and the other organisation the International Coffee Organisation (ICO) attends to the co-operation between the coffee producing and consuming countries. ICO was established in 1963 (ICO, 1996) to administer the already functioning International Coffee Agreement (ICA) which was first set up in 1962. (Pietersen, 1988)
International co-operation among the coffee producers dates back to the post-war period when regional organisations started forming to oppose the immense price fluctuations that occurred within the global market on the commodity of coffee. Since then there have been several attempts among the coffee producers to establish international co-operation to do exactly that e.g. building up stocks to avoid falling prices as a reaction to an overproduction of coffee.
The ICO has also tried to address the problem of
fluctuating prices via the ICA in recognition of the coffee producers'
general weak position in the world economy. The idea behind the
ICA was to stabilise the export revenues of the producing countries
through export quotas imposed on these same countries. Throughout
the years the quotas set under the ICA has been tampered with
by several producing countries. One way of tampering with the
quotas was for a producing country to announce that they had had
a year of low harvest output. This would result in a higher market
price on coffee, which in turn meant, according to the agreement,
that the country got it's own quota increased, although there
were no grounds for an extra supply (Arentsen et al, p.5,
1994). The long term effect was a decrease in prices on coffee.
The coffee prices hereafter fell with an additional 40 to 60 per
cent. The result of this was that the members of the ICO failed
to reach an agreement addressing economic measures. The ICA is
still in function and was last renewed on 1st October 1994. (See
main objectives listed below)
The objectives of the ICA are:
(Source: ICO homepage on the World Wide Web: /http://ico.org)
The ACPC was established in 1993 because of dissatisfaction among the producers with the failure of reaching an ICA, encompassing economic measures. Today the ACPC represents coffee producers accounting for some 85% of world coffee output. (UNCTAD, 1995)
As shown in figure a the initiative in combination
with other factors e.g. frosts, damaging the coffee crop in Brazil,
had a favourable (to the producers) effect on prices as the average
of the coffee composite indicators price rose from 68.12 US cents/lb.
in October 1993 to as high as 134.02 US cents/lb. in June 1994.
The trade on the stock market can be divided in two the spot market and the Futures market. The spot market involves the trading of coffee that has already arrived from producing countries, and are now being stored in warehouses in consumer countries (Pieterse and Silvis, 1988) 'Spot' in this context means 'immediately effective', so that spot price is the price for immediate delivery (Penguin Dictionary of Economics). It is the reality as opposed to the 'futures' price which is predicted or estimated.
The futures market provides the possibility for importers, exporters and traders to hedge the risk of future, adverse price movements (Pieterse and Silvis, 1988). Most trading on the future market takes place in New York with standardised contracts called the New York 'C'-contracts in the case of Arabica and contracts on the London terminal market in the case of Robustas, and these are contracts for a certain amount and type of coffee to be delivered at a pre fixed future date.
Futures prices are the result of influence from a
whole range of dealers outside the market who are speculating
in price changes on commodities. Depending on expected harvest
outputs in the future, prices can rise and fall not just by a
few percentage points, but in great booms and slumps (Brown, 1993).
Whatever the marketing system, the marketing channels are usually
long, particularly for small holders production, and the many
institutions involved in the marketing operations contribute to
considerable trade margins (e.g. import/export taxes).
Throughout the era of industrialisation different countries have used a range of protective policies e.g. tariffs and quotas. This has been done in order to protect both industrial and agricultural production against foreign competition. In contrast Less Developed Countries (LDCs) do not have the capacity to extend growth in their export sectors to the rest of their internal economies. There are a variety of political, social and cultural conditions that act as barriers to the linkage of industrial exports to the local economy as a whole.
Trade between countries of Africa and the members of the EU (former EEC) has been governed since the mid 1970's by a series of agreements known as the Lomé Conventions. This caused problems of decline of purchasing power (there were lower export returns especially in the 1980's). This retarded economic development created a severe balance of payment problems. Under the Lomé Conventions tariffs and other trade barriers restricting African access to European markets, have been regressively removed. A stabilisation fund has been established to compensate countries whose major exports are adversely affected by declining market prices. While the Lomé Conventions have at least tried to address a number of important issues, they have not been sufficient to alleviate Africa's steadily deteriorating trading position in the world market place.
A coffee co-operative will seldom be able to compete
with a large First World importer in any of the links in the chain
of commerce, unless it is on a national/international scale (e.g.
investing in manufacturing and packaging in coalition with other
producers in the region/country). In competing on the world market,
the important factors are vertical control and access
to large amounts capital, and the third world would need to achieve
this to compete on equal terms. In other words they need to be
able to speculate and trade in futures, as well as owning means
of manufacturing and even shipping. Within different industrialised
trade communities in the developed world the setting of tariff
rates plays an important part in economical protection. The tariff
rates is generally nil for primary products and the rates rises
through the stages of production and manufacturing. Moreover,
a big part of the profit fall in the hands of middlemen and TNCs,
but there is also a price pressure as a result of tariffs and
toll barriers.
"The Danish consumer protections law (in Danish called 'Levnedsmiddelloven') § 12 states that consumption products can not be sold, if it is unfit for consumption. However, there are no statements anywhere in this law, that states that a product can not be sold, if it is produced under unfit working conditions" (Møller, djøf nr.21, 1996).
The quote emphasises that there is a need for a global
law to regulate the market, which is characterised by a series
of spatial disjunctures i.e. the large gap between the small holder
in the third world and the TNCs in the developed world. Trade
among the LDC therefore seems a more attractive option for the
future. They can compete on equal terms and economies of scale
can be reached more easily within regional economic integration
(albeit ambiguous).
According to international law every country has exclusive jurisdiction over its territory. This however is not the reality. Governments exercise this national sovereignty through their police powers and their taxing authority over all resident individuals and business organisations. The powers of state raise barriers to the movement of goods and services and factors of production. This distorts the basic theoretical pattern of world commerce. LDCs encounter a host of problems in their commercial relations with the rest of the world. Some come from the conditions of inequality faced by LDCs in their dealings with the developing world. Their economies are too reliant on the element of speculation and consequently risk (from crop failures, price fluctuations etc.).Surrounding enclaves of commercial agriculture are subsistence farms of indigenous population. There is a juxtaposition of the traditional and modern that constitutes a dual economy which is a feature typical of Africa. A dual economy is an economy that appears to exist in two separate parts, each having a distinctive history and dynamic. Inherited social attitudes and value systems are often incompatible with the competitive profit driven view points prevalent in industrialised society. Consequently it is difficult for people to adjust to the changes required for modern production.
As mentioned in the introduction in this chapter
TNCs of the developing world make the most profits from coffee.
The coffee market today is controlled by a few large transnational
companies (TNCs) (see Figure 2 & 3) who control almost all
the stages in the marketing and manufacturing chain.
There is a glaring disparity between the incomes
and wealth perpetuated by these relationships (the 'limits to
growth' situation - a Neo-Malthusian concept). It is a known fact
that the world market is dominated by a few Transnational companies
(TNCs), and that they move a lot of the world's primary products
by internal transfer, for which they themselves fix the prices.
Figure 2 Source: Recent trends on the world coffee market,
UNCTAD 1995
By 1994 six groups accounted for 45% of the world
coffee trade (as shown in Figure 2 above) and in the coffee roasting
business in 1993 the market was dominated by six houses (as shown
in Figure 3 below).
Another important factor is that wealth accumulates wealth, and this is another key to the triumph of the TNCs. If a company has a large amount of wealth to it's disposition, it can give out loans and at the same time determine the interest in the currency of it's choice. The money that the third world receive in loans from the world bank, is the equivalent to the accumulated wealth of the
Figure 3: Recent trends on the world coffee market,
UNCTAD 1995
TNCs. Being rich makes the TNCs efficient in more than one way. It also enables them to invest in other products than primary products, to invest in research and technology which is very important.
The TNCs development of technology is directed at
manufacturing and transport mainly, which in turn are the links
in the chain of commerce that they control. In this way they exclude
others, who do not have the same wealth and ability to invest
in these kinds of technology, from entering the above mentioned
links of the world marketing chain, because of the TNCs superiority
through technological efficiency.
TNCs are often involved in speculation through middlemen. Among numerous advantages, e.g. cheap labour and market control, the middlemen can ensure cheap primary products for the TNCs by trading in Futures. As a result of their large amounts of merchant capital available, they can buy the cash crop when the price is right for future delivery, and even maintain a buffer-stock of crops in the case of increased product prices. This fact is enhanced by looking at the third world small farmer, and the conditions which he faces. If their cash crops are harvested before their main food crops they might have to sell the crop immediately in order to feed their family, and often they have to sell anyway because they have no storage facilities and refrigeration facilities. "Terms of trade influence decisions on what to grow e.g. cash crops" ( Bagachwa, 1995)
When world market prices for primary products decline it has a negative effect that can be felt locally as well as nationally. The farmers will always receive the spot price, or part of the spot price, which can be both good or bad in a financial context. Obviously the TNCs, having all the advantages of wealth and market control, enjoys a security that the small farmer of the third world can not.
"Third world agriculture is not just a less sophisticated version of that practised in the developed world. Much of it is based on a fundamentally different system of production. Third world agriculture does not operate in isolation. It is very much a part of an international economy largely controlled by developed world interests" (Dixon, 1996).
In summary, therefore, there are variety of different levels upon which we have touched to explain how the coffee market functions, this is made more clear on the following page.
Production - Individual peasant household, small farmer, co-operative or co-operative union; or plantation workers working for local companies or large transnational companies.
Technical consultancy - Specialist firms usually from the First World, occasionally from the Third World.
Storing and processing - First stage: generally by production workers; Second stage: on local estate by local private company or bog by big company, often from the First World.
Finance for purchase - Private banks, often from the First World, sometimes Third World state banks, or co-operatives.
Preserving & packaging - Roasting, refrigeration, vacuum packing, quality control etc., by local company or transnational.
Transporting - By specialist local company or transnational.
Marketing - Home market: local company or state organisation or agent, occasionally a co-operative; Overseas: local trader, big company or state marketing board.
Exporting - Third World company agent or First World transnational.
Shipping and insurance - Agents for First World importers or big company, occasionally Third World exporters.
Importing, inspection & documentation - Merchants or big company from the First World.
Commodity dealing - First World dealers and big companies.
Finance for trading - First World banks and government departments (credit guarantees).
Legal & accountancy services - Specialist firms from the First world.
Manufacturing - Big company or specialist firm from the First World.
Wholesaling - Wholesalers, wholesale markets, big companies, co-operatives.
Advertising & promotion - First World agencies.
Distribution & transport - Specialist firms, big companies, sometimes co-operatives - all First World companies.
Retailing - Chain stores, retail co-operatives, small shops, mail order.
Box 3 is a descriptive view of the domination of the different links in the chain of commerce.
Illustrating and simplifying the power held by the TNCs through all links in the chain of commerce, is best seen when looking at (box 3, Source: Brown, 1993). It is here seen that the TNCs often performs all the functions here distinguished except that of production through the farming of land. It is clear here that their power derives from their large amount of resources, their access to finance and from the fact that their operation is vertically integrated.
It does not mean however that there exists no corporations
in the developing world, who do not have power along the lines
of that which the TNCs enjoy, but they are few and far between,
and their main interest is to accumulate wealth, not to make the
small farmers rich from their production.
The stakes in reshaping international trade are large. It has been estimated that developed countries have paid 200 billion dollars a year for commodities imported from developing countries. The share of this, that went to the developing countries for producing primary products has only amounted to 30 billion dollars (Stock, 1995).
This shows clearly the magnitude of the dichotomy
between the developed and the developing world economies that
is present today. The linkages of local economics to the broader
regional, national and global economic spheres provide opportunities
to strengthen local initiatives, but at the same time are the
key to understanding the marginalisation of people and places
in the African periphery. Just as the growth of community initiatives
does not absolve African governments of responsibility for development,
neither does it absolve the global community of its moral responsibility
to support the quest for social justice and development in Africa.
"Currently we are witnessing the final stages of the globalisation
of the world economy"(Watts, 1995). There are
limits to the ability of traditional systems to cope with externally
induced change. There is a need to resolve the deteriorating
terms of trade of the developing world export as no economy can
exist for long without a stabilised political framework. From
analysing the present economic situation of the global coffee
market and its relation to Tanzania, 'sustainable development'
(in this case from an economic point of view) seems to be the
key to a more successful future.
Inherited social attitudes and value systems are often incompatible with the competitive profit driven view points prevalent in industrialised societies. It is difficult for people to adjust to the changes required for modern production (in our opinions). When it comes to trade, the importer needs an exporting partner that has the necessary structure that makes them a viable trading partner. The lack in size and structure, however, is often the problem with the establishment of a trade relationship based on equal terms in a way that can be mutually beneficial. As we have seen in the previous chapter this is best seen when comparing the way the TNC's trade and the way in which the coffee farmer trade. This chapter sets the framework as defined by Fair Trade initiatives in general as we have come to understand it.
"The main cause of underdevelopment can be found in the existing world trade practices." (Fair Trade demand paper, 1996). The inequality in the distribution of global wealth and therefore power (and knowledge) is the primary reason for a deeply rooted vicious circle. We stated in the previous chapter that wealth accumulates wealth, in this way the rich developed countries can increase their per cent of the capital excess while the poor underdeveloped countries lose an increasing share in the world income. This is clearly not an economically sustainable system. In the long run the primary producer in the underdeveloped countries will lose out. The ideology behind Fair Trade initiatives sets out to eradicate the continuing unfairness and inequality in our present world trade order.
Besides being an ideology and a reflecting general wish for a better and fairer world, Fair Trade is also a series of practical ideas, strategies and initiatives about meeting the needs of the farmers (primary producers) in the developing world countries. How exactly did these ideas and initiatives come about? There is no doubt that the initial ideas of wanting to 'make things fair' stems from the modern eras perceptions of unfair systems created by humans. Recognition of this epistemology coincides with the development of the globalisation of the world. Since the end of the second world war global communications has improved beyond all expectations. Developed countries perceptions and awareness of the world has therefore increased the knowledge of the extent to which we have exploited the world resources to our own advantages. In recent years there has been a realisation of knock on effects from our own actions and needs, that indirectly effects the majority living in developing countries. Consequently with the break down of the cold war and other political barriers between East and West and the improvements in technology, a series of movements have been initiated, directed at redressing the problems we ourselves have created.
Environmentalism has now taken on a whole new meaning in the last decade.
With this modern form of environmentalism , the focus is on political theory and practice. 'Sustainable development' has become a central theme in all new development projects around the world stemming from the charters set through the global organisations e.g. The United Nations. The post modernist idea of Sustainable development strategies now encompass three key aspects (as mentioned in the introduction), These are:
What is said here and in the points above (a, b and
c) can be said to describe the essence of the ideas behind Fair
Trade and indeed all modern development theories.
Achieving these ideals in the complex economic system is no easy task. The Fair Trade organisations aim at bridging the gap between the consumers and producers. They intend to guide the producers through the global market in a fair process and on the other hand to make the consumer aware of the origin of the products and the conditions under which they are produced. Bypassing the middlemen (often functioning as speculators), which is a way of bridging the gap, will automatically increase the risk for the importers, but a part of the Fair Trade initiative involves long term contracts with groups of small farmers (co-operatives) to maintain a reliable and continuous supply of coffee. The idea here is to avoid, to some extent, any radical price movements by establishing a partnership based on trust (in conjunction with a mixture of common goals and contracts), where the trade partners rely on each other to maintain a stable market, which is in the interest of all parties (this of course has to be wide spread in order to function as a price stabilising factor). This is achieved, primarily through the process of dialogue. The Fair Trade organisations can not been seen as the caretakers of producer interests, but in recognition of the inequality they make an effort of promoting a quality product. This is achieved by functioning as representatives for specific importers (in our chosen case study this is U-landsimporten) making sure that the coffee co-operatives are improving the quality of their production, and thereby the product itself. For this service provided by the Fair Trade organisations, the importers on the other hand have to guarantee a minimum price (among other demands) for this new and improved product.
The actual trade often still goes through the regular marketing channels, meaning that the coffee still can be traded in futures and at the same time be traded fair and make a profit. The way in which this happens is described in the Access to Market chapter. The farmer can choose to sell when the price is higher than the minimum price, this way the producers never go under the 126 cents, but may very well get a price above the minimum ( Fair Trade Paper, 1996)
Coffee is, like most crops, a fragile source of income. A part of the Fair Trade initiative states that the farmer should work towards a more 'sustainable form of production'. They define this as :
This is to be achieved by offering a higher price
for organically grown coffee as a result of an increase in demand
from the consumer (it must be noted that there are other influencing
factors). This way, if we are to put our trust in the Fair Trade
principles, not only does the consumer get a high quality product,
but more sustainable production methods can minimise the risk
of crop failure and environmental. Furthermore, the farmer would
then be independent of price changes on fertilisers and pesticides.
The producer has to be able, as a result of an increase in income,
to invest further on in the marketing chain. This could happen
through investments in manufacturing and also transport. This
in turn has to be achieved by uniting interests in the producing
country, and thereby uniting capital on a large scale, i.e. the
forming of co-operatives and even co-operative unions. Fair Trade
is not a guarantee against bankruptcy for the small farmer, but
if he has a product for sale he also has a fair chance in the
form of a fair price.
Fair Trade can only become successful if consumers are made aware. If a market system is to become more economically sustainable (for the producers) the appropriate information must be introduced into the market. This initiates the raising of money for long term investment. Markets depend on people, and people depend on information (which is not always perfect). They are ignorant as to the realities of production methods.
Humans preference can be expressed through the market place and this relates to the relative criticality of forms of natural capital (i.e. coffee). Provision of information is imperative to creating the specific demand and create a trend. Hence, human value systems regulate the markets. Consumerism is very undemocratic however, and there is a tendency that the more money implemented into product sales, the more influence it has in consumer trends. Money is power in this case. Also, people tend to place higher value on what they have, rather than on the item of equivalent values that they do not currently possess. Value in this sense is a very personalised entity. The individual concern is centred around personal well being (egocentric), this can be seen through the increase in demand on organically grown produce. The consumer has, through an increased awareness, become concerned with what he or she consumes for health reasons, and secondary to this, the effect the traditionally grown produce has on the local environment. With a product like coffee the self centred consumerism becomes of grave importance for the continued wealth distortion. The consumer is so far removed from the actual primary production that he or she have no chance of making an active choice when purchasing the product. This is not the lack of solidarity in reality, but more the lack of knowledge and understanding. Consumerism seems to take heed of short term development results, rather than the more important long term development ethics which are more important in sustainable development strategies. In this sense, the notion of a fairly traded product is a very abstract concept for the individual consumer to be able to grasp, because the ideology is a long term result. Max Havelaar can not control the consumer preferences at the end of the day, however.
All these measurements are only the beginning steps
to a market where Fair Trade will not be an issue, but a natural
fact (if it is successful).
Whatever lifestyles people practice under this global economy, they have an impact on the environment. Today mainstream sustainable development thinking is built upon the conventional vision of a managed Keynesian world economy, mutual trading to mutual advantage and the environmentalism of both 1960s and 1970s. Fair Trade takes this perception of development one step further by basing plans from a 'bottom-up' approach, taking into consideration social aspects as well as environmental and economical. In conclusion, 'sustainable development' (as defined by Max Havelaar ideologies) draws on both the technocentrist and ecocentric axes of environmentalism. On the one hand the concept proposes the rational, technical solutions to environmental problems. Other proponents believe that sustainable development must involve more radical changes to economy and society e.g. local self sufficiency. Fair Trade is an example of promoting an economic model that draws together the entire sphere of sustainability (as we have come to recognise it today).
Participation, in the Kagera Co-operative Union (for example), is both a means and a goal in development processes.
For example, the Max Havelaar organisation could be seen as a third party.
It is therefore arguable that the role of government should change emphasis from a `top down approach to a third party facilitator. Max Havelaar can not possibly influence this alone. However, if a market system is to become 'fair' (for the producers), the appropriate information must be introduced in to the market considering the consumers degree of naiveté.
In the end sustainable development is not a fixed
state of harmony, but rather a process of change in which the
exploitation of resources, the direction of investments, the orientation
of technological development, and institutional change are made
consistent with future as well as present needs. It seems a dynamic
and complex process in which to enable the desired results.
To be able to address the actual Fair Trade work in Denmark, seen in connection with our case in Tanzania, it is important to look closely at the two central organisations involved with the Fair Trade concept in Denmark, Max Havelaar Denmark (MHD) and U-landsimporten . Both MHD and U-landsimporten have the same objectives, the promotion of Fair trade. U-Landsimporten is also involved in the actual importing and selling of the Fair Trade coffee to the consumers in Denmark. As a result this can have consequences for their somewhat different approaches towards the demands set out for the producers.
Idealism (or rather neo-idealism) held both by MHD and U-Landsimporten, is the driving force of the intentions of these organisations functions. We are here referring to idealism as opposed to purely economic interests. It should be pointed out that the coffee sold by U-Landsimporten carries the MHD Fair Trade guarantee mark, so the two have to follow the same guidelines to a certain extent.
We will in the following give a descriptive view
of the registration and control of the producer according to the
Max Havelaar outline, as well as additions made by U-landsimporten.
The above quotation clearly shows the idea behind the Fair Trade as seen by the Max Havelaar Foundation. This is the same idea we referred to in the introduction of this chapter as a neo-ideology.
The main responsibilities of Max Havelaar are to: Promote the sales and the consumption of the coffee with the Max Havelaar Mark; Inform and mobilise the consumers and guarantee that the Mark represents what they say it represents; Identify the producer groups for the international Coffee Producers' Register (also known as the International Coffee Register, or ICR) of Max Havelaar, maintain the communication with them in their development process to the extent possible; Carry out the verification and control on the roasters that sell their coffee with the Max Havelaar Mark, in order to protect the interests of consumers and producers. This refers to, not only MHD, but the entire Max Havelaar Foundation. The role and demands are the same wherever Max Havelaar is represented. For the purpose of our project we will expand on some of the above mentioned responsibilities.
Firstly we will further investigate aspects of the two latter responsibilities. In order to do that we have to look at the demands, or criteria, set by the Max Havelaar Foundation. These criteria, are (according to the demand sheet to be interpreted) as standard criteria for the acceptance of an organisation of small farmers into the producers register. Under point eight is the list of objectives that Max Havelaar is working towards. To participate in Fair Trade, the producer has to meet the following criteria (Fair Trade inf. Sheet for Max Havelaar, TransFair and Fairtrade, 1996):
In reality, however, these demands are not always met, as we shall see, also they are often not strictly enforced by the Fair Trade organisations. The objectives and principles stay the same (the objectives are the essence of Fair Trade) over long term development. This does not mean, however, that the Fair Trade initiated has no effect what so ever. Sustainable development plans as outlined are a continual process, therefore, it can be difficult to assess the actual effect of Fair Trade initiatives, good or bad in short term development.
Besides these demands, or criteria's, towards the producers, there are also a range conditions that the roasters and importers have to comply with. These conditions are primarily set up in order to ensure that the coffee sold with the Max Havelaar trademark is fairly traded. Max Havelaar in a sense, works as an 'extended arm' for the producers, making sure that the roasters and importers keep their end of the bargain. For the right to use the Max Havelaar trademark on the coffee sold, the following conditions have to be complied with:
Regular Organic
---------- -----------
washed arabica 126 141
unwashed arabica 120 135
washed robusta 110 125
unwashed robusta 106 121
Table 1: The price on different types of coffee in US cent per lb.
3. The coffee roasters have to accept and facilitate
external control on the compliance with these conditions.
This importer has been a Fair Trade retailer since 1984. It is involved in the actual selling and distribution of the coffee from KCU, in their store(s), which bear the Max Havelaar trademark. Their main objective is to improve the conditions for trade, production and livelihood in the Developing world. Their original aims are in many ways identical to those set by the Max Havelaar Foundation: Better prices to the producers; organic or environmentally friendly goods and methods of production; more manufacturing and processing to be based in the developing countries; increased direct trade. These aims are also the definition of sustainable trade, which they themselves advocate. Besides being a Fair Trade organisation, or Alternative Trade Organisation (ATO), it also functions as an NGO. They assist the Developing world producers on a wide range of levels, from managerial training to the incorporation of organic production methods.
In order to, later on in the project discussion, look at the differences between MHD and U-landsimporten, it is important to look into the latest decisions made by (U-landsimporten, board meeting 11. August, 1996).
Under certain circumstances there can be shown leniency towards the above stated demands:
Having gone through the conditions and demands set
up by the two organisations, we will try and draw these in, in
the discussion, and set them up against the interviews conducted
and thereby examine the differences between the two.
The demands here are obviously based on long term
perspectives and is not to be seen as actually being met here
and now by the developing world. The demands here speak for themselves.
When looking at the two organisations it becomes apparent that
U-landsimporten stresses the need for moving towards organic methods
of production, whereas Max Havelaar puts less emphasis on this
matter. On the other hand the demands from U-landsimporten allows
a certain leniency towards this demand. This in turn might be
connected with the fact that organic production entails implementation
difficulties on a short term basis. The Max Havelaar demands are
a part of the demands set by U-landsimporten, indirectly, through
the sales of coffee bearing the Max Havelaar mark. In short, the
demands set by U-landsimporten, can be viewed as additions to
the Max Havelaar demands.
In this chapter the complexities of the fundamental growing requirements and ecology of the coffee plant are examined in contrast to the abstract idea of coffee as a commodity as in previous chapters. Coffee is not just the drink we have with our breakfast, it is in essence a plant that is grown almost exclusively for economic exchange, i.e., a product. The strains that we are discussing here are not found in the wild; they have been adapted through hybridisation, and more recently genetic engineering, both for the benefit of a better quality bean and in order to have coffee which is better adapted to different climatic and growing conditions. In our study it is important to discuss the basic requirements for coffee cultivation, in order to see how these define it's physical limits. We can only attempt to assess sustainability if we have a knowledge in the first place of the present methods of production, and also an understanding of the flexibility of the production as defined by both the environmental limitations and cultivation techniques. From here we can further discuss how this then relates to coffee grown in the Kagera region by smallholder farmers (as opposed to plantations), Tanzania, including the limitations to cultivation defined by the culture and traditions of the producers.
By focusing on the production methods as applied by this particular group of producers we have been able to select and describe particular areas of coffee cultivation that are relevant even though we acknowledge there are other methods (in some cases in this chapter we have outlined some comparisons to draw conclusions later on). As a result, there is a focus on cultivation methods; of intercropping, use of shade trees, mulching, cover crops, and weeding. Following this is a description of common processing and harvesting strategies. A brief description of diseases in the chapter also raises the question of using methods of prevention and protection in a traditional sense. Finally the methods of organic cultivation will be discussed, namely in relation to the environmental aspects of sustainability. Thus, the intent of the chapter is firstly to clearly state the basis for growing coffee as it is a complex process. Secondly it's purpose is to illustrate more environmentally forms of coffee cultivation. Thirdly, by defining the limits on coffee growing imposed by environmental requirements and cultivation techniques, it will provide part of the framework for an assessment of the sustainability and more importantly, the flexibility of the agroecosystem in the area of our case study, of which coffee cultivation is an important part.
Coffee constitutes the genus Coffea, a member of the Rubiaceae family. Coffea species are divided into 4 groups: Eucoffea, Paracoffea, Agrocoffea and Mascarocoffea. Of these, Eucoffea is the only group of economic importance. This group is sub-divided into 5 groups, with the first (Erythrocoffea) including the important species known as Arabica and Robusta coffees (Rothfos, 1985). Approximately 98% of the world's coffee production is accounted for by the two species Coffea Arabica L. and Coffea canephora Pierre, with Coffea Robusta generally considered to be a variety of Coffea canephora. Arabica is classed as the better quality bean compared to Robusta, however the latter is most common in our chosen case study area in Tanzania due to environmental conditions.
Coffea Arabica L. is an
evergreen shrub, often multi-stemmed, between 8 and 10 m tall,
and with opposite branches. It's leaves are 10-15 cm long, 4-6
cm wide, oval-shaped and opposite. 8-15 jasmine-scented, white
flowers are grouped together in whorls in the axils of the paired
leaves. The ovary is red when ripe, and consists of an exocarp
(skin), fleshy mesocarp (pulp), and two seeds ("beans")
joined together along their flat sides.
The size and shape of the coffee beans also vary, depending on variety, environmental conditions and cropping practices (Coste, 1992).
Coffea canephora Pierre, like Coffea Arabica L. grows to a height of 8-10 m, and is also multi-stemmed. It's leaves are larger than those of C. Arabica L. (20-35 cm long, 8-15 cm wide). The white, scented flowers are densely grouped 15-20 in each whorl, with 1-3 whorls making up each cluster, developing into abundant, compact groups of fruits. The beans vary in size, but are generally small (Coste, 1992).
Coffee has a tap root, which seldom grows deeper
than 30-45 cm (Bach, 1992). The root system of coffee is extensively
interwoven down to a depth of at least 3 meters in suitable soils
(Nutman, 1933 in Willson, 1985). The main purpose of the deeper
roots is to absorb water, whereas roots in the top 30 cm of the
soil are responsible for most of the nutrient-absorption (Willson,
1985). This will become more relevant when discussing the interrelating
agroforestry system in the next chapter, i.e., how a more closed
nutrient cycle is established when coffee is grown as part of
a diversified agroecosystem.
This section is a description of the specific environmental requirements for growing the crop. It outlines many of the delimiting factors that coffee producers have to be aware of to firstly grow the crop, and secondly produce a good quality bean.
Firstly, height above sea-level is the basic criterion for where different species of coffee can grow. Coffea Arabica ("The highland coffee") grows around 600 m above sea-level; C. liberica ("The medium altitude coffee") from 450-600 m; and C. canephora ("The lowland coffee") from 0-750 m. This is reflected in the fact in Bukoba and Muleba districts, which define the area of our case study, it's only on the upper slopes and plateau's that Arabica is grown while Robusta is grown at the lower altitudes in the region, which covers the greater part of the area by far. This is though, a simplified way of categorising; in fact a combination of factors are relevant in determining where coffee is grown (Bach, 1992).
Common for all Coffea species is that they cannot survive temperatures nearing 0C for any length of time. This limits coffee cultivation to latitudes between 25N. and 25S., at altitudes where frost doesn't occur. Coffea Arabica originates from the high plateaux in Ethiopia, making it better suited to withstand fluctuations in temperature than other Coffea species. According to Rothfos (1985), the optimal average temperature for Arabica-varieties is between 20-25C, with minimum temperatures around 15C. The ideal average annual temperature for C. Robusta is between 24 and 26C, but it can be damaged by temperatures under 30C if there is a lack of humidity. C. Robusta is more sensitive to the cold than C.arabica, and can be damaged by temperatures of 15C if exposed over extended periods of time (Rosthfos, 1985).
Rainfall is the second most limiting climatic factor after temperature. Generally coffee grows well where the yearly rainfall is between 1500 and 2000 mm per year. It requires irrigation if the yearly rainfall is under 1000 mm, and can't be cultivated if the average is under 800 mm per year (Rothfos, 1985).
Arabica coffee normally requires a minimum of 1300 mm rain per annum, spread out fairly evenly over the rainy period (Bach, 1992). The amount of rain required is dependent upon several factors; where the soil has high water-retention capacity and the dry season is short, coffee can be grown with as little as 1100 mm rain per annum (Willson, 1985). Arabica coffee should have a dry period of 6-14 weeks to insure a good and even flowering (Bach, 1992). Because Robusta coffee generally is grown at lower altitudes and where the temperature is higher, the water requirements will be greater. Rainfall between 1550 and 2000 mm per annum is suitable (Forestier, 1969 in Willson, 1985). Robusta coffee is also more tolerant of abundant rainfall than Arabica coffee; according to Coste the canephoras adopt to precipitations exceeding 2000 mm per year (Coste, 1992).
Arabica and Robusta coffees also have different needs with regards to humidity, with Robusta coffee requiring somewhat more than Arabicas. According to Rothfos (1985) a higher humidity for Arabica coffees may be desirable, but because of it's greater susceptibility to rust diseases, a moderate humidity is preferable. The humidity level is especially important during the dry season, because of it's role in preventing the loss of moisture by evapotranspiration. Thus a higher humidity will extend the length of the dry season during which the plants can survive without damage, by reducing stress which would otherwise be caused by water-loss (Willson, 1985).
In it's natural habitat coffee is found in shaded or semi-shaded surroundings, and traditionally has been considered heliophobic (Coste, 1992). However two schools of thought have emerged regarding the coffee plant's preference for light or shade, one favouring the growing of coffee with the use of shade trees, the other advocating it's cultivation completely exposed to sunlight (Rothfos, 1985). The first represents the more traditional way of growing coffee, while the latter is a more intensive cultivation form, requiring more fertilisers and high-productivity varieties but producing higher yields (Willson, 1985; Bach, 1992). Because of the adverse effects of wind on coffee plants, shade-trees protect them from damage.
According to Willson (1985) the most important factor
for growing coffee is good drainage. For Arabica coffee the best
soils are well-drained, clay-mould, slightly acidic humus-rich
soils with a large amount of exchangeable bases (Wrigley, 1988
in Bach, 1992). Robusta coffee is more tolerant towards more basic
soils (Willson, 1985). Soil-depth is also important, but the minimum
required depth for coffee cultivation depends not only on water
retention capacity but amount of rain fall. The critical factor
here is the soil's capacity to maintain a water reserve during
the dry season. As we will describe in the case study, these factors
are partly decisive for where coffee can be grown in the area
of our case study, given the level of applied technology. The
humus content is important both for water-retention and nutrient
supply, but also because of it's capacity to hold the soil particles
together and thus prevent erosion both from wind and from heavy
rains. Because of it's water-retention capacity, humus is indispensable
for C. canephora. Coffee is often grown on slopes, but
the backs of the slopes are vulnerable to wind erosion and moisture-loss,
whereas at the bottom of the slopes there tends to be to much
moisture, groundwater and compactness of soil. On the slopes themselves
erosion must be counteracted by contour-cultivation or terrace
cropping (Rothfos, 1985). Coffee can not be grown in all parts
of the Kagera region, for some of the mentioned environmental
limitations, but there is an increasing pressure on the inhabitants
to cultivate marginal land ( possibly leading to a decline in
coffee quality).
Coffee trees in the forest reproduce with seeds, but the most commonly used technique in coffee cultivation is by the use of cuttings (Rothfos, 1985). The plants are started in nurseries, and after 6-14 months planted in holes when the soil has been mixed with natural fertiliser and sometimes with phosphate or pesticides. Forest land is usually used for coffee, as the soil in savannah regions has been eroded, is less fertile, and has a less favourable climate with a long dry season (Coste, 1992). Due to overpopulation however, the marginal lands are also used (this is evident in the Kagera region). There is a tendency to grow with higher plant-densities, coupled with intensive coffee cultivation without the use of shade-trees, and large amounts of artificial fertilisers. Robusta is a larger tree and usually planted at lower densities. According to Willson a density of 1000-1350 trees per ha. is usual for Robusta coffee.
Pruning of coffee trees serves a number of purposes, and almost always is done in one form or another. Some of the advantages are:
(Rothfos, 1985; Willson, 1985; Wrigley, 1988; Coste, 1992)
Coffee is usually pruned a short time after harvesting.
Pruning methods are categorised into two groups, the single-stem
and the multiple-stem methods. Single-stem pruning is especially
used where coffee is cultivated with shade-trees. It is more work-intensive,
and requires a sophisticated pruning-technique (Rothfos, 1985).
Multiple-stem pruning is an simpler method, and is easier to maintain
(Rothfos, 1985). The multiple-stem method gives less problems
with over-production of fruit or the subsequent death of branches,
than is the case with single-stem pruning. For Robusta coffee
multiple-stem pruning gives the greatest yields, and is the most
used method. It is used with the more intensive growing methods
(Bach, 1992). As we will show later on, there are a number of
disincentives in the rural society which we are investigating,
for maintaining the coffee trees properly - which entails pruning.
According to Coste (1995), the choice of cover-crop should be a species which has deep tap-roots, thus drawing water from the lower soil levels and protecting the soil surface. The consequence is a reduction in the drying gradient of the upper levels of the soil (where the main activity of the coffee root system is localised). Some positive effects from cover-crops include a lowering of the soil-temperature, and increasing the total content of organic materials in the soil (Bach, 1992). The cover-crop may compete with the coffee for nutrients, but if the foliage is left on the ground after cutting (or when it dies), the nutrients are recycled. Additional benefits may be a conversion of nutrients into an organic form (making them more available to the coffee trees), and the positive effects of litter on root-development (Willson, 1985). The use of cover-crops can make weed-control more difficult, but on the other hand can compete with weeds and thus minimise weed-problems (Bach, 1992).
During the first three years it can be advantageous to plant crops between coffee trees (intercropping), because the young coffee plants don't fully utilise the soil- and air volume during this period. Crops are often chosen which don't compete too strongly with the coffee for nutrients; however, this depends on whether the highest priority is given the coffee or the intercrops. In the case of subsistence-based farming systems the highest priority is often given the crops which the farmers depend on for food, which means that competition with the coffee tree for nutrients has less importance.
Furthermore, there may be a question of priority
between different cash crops, e.g. in Tanzania where certain types
of bananas are cultivated for beer and liquor production. These
are often intercropped with coffee, and how much priority is given
them depends on both economic and social factors at the level
of the farmer, and agricultural policies based on macro-economic
goals and objectives.
Figure 2: Simplified Picture of The Shade Tree Within an Intercropping System
The natural habitat of most coffee species is in
the understory of tall forests, which made it natural that early
coffee cultivation also was done under shade (Willson, 1985).
Although the use of shade trees is still wide-spread, there is
another school of thought advocating the cultivation of coffee
in full sunlight. The comparison of the two cultural systems is
not possible in most cases according to Willson (1985). The reason
for this is that conditions such as species/variety, erosion control,
cropping techniques and ecology are so varied, but also because
a scientific definition of the light level needed for coffee tree
growth and fruiting is needed.
.
Listed below are some of the advantages which the
use of shade trees has:
The effects of shade trees on yield depend on whether
or not artificial fertiliser is used. According to Willson (1985),
and Bach (1992), unfertilised, shaded coffee yields more than
unfertilised, unshaded coffee, but unshaded coffee responds better
to (artificial) fertilisers than shaded coffee. Thus coffee cultivation
without the use of shade trees is characteristic of intensively
driven plantations, where the main focus is on increasing yields,
while shade trees are often used in low input/low output systems.
(Mitchell, 1988).
In Tanzania bananas are often grown together with coffee (World Bank, 1995). According to Willson (1985), bananas are commonly used as shade for coffee, but compete strongly for water and nutrients. A series of experiments in Tanzania showed that when bananas were grown together with coffee, the coffee yield was reduced considerably (both for Arabica and for Robusta coffee), but the banana-yield wasn't affected by the coffee. The conclusion was that if coffee was the most important crop, then bananas shouldn't be planted with it, whereas if bananas were the main crop, then coffee is a good crop to plant along side of them (Wrigley, 1988). As mentioned this is a question of priority, and as we will discuss later, the farmers in our case study place enormous importance on bananas both for food and income generating activities.
For years mulching has been practised in eastern
Africa, and very widespread in among other countries Tanzania
and Kenya. There are a number of advantages with the use of mulching
such as reduced soil temperature, reduced drop-erosion and surface
runoff from rainfall, keeping the soil moist, increased availability
of nitrogen in the dry season, increased amounts of organic material
in the soil, better conditions for root-growth in the top soil
layers, decreased weed growth, and higher coffee yields (Wrigley,
1988).
Competition from weeds can result in significant reductions in coffee yield. Weeds can be minimised by the implementation of certain cultural techniques, some of which already have been discussed. For example, certain cover crops discourage and smother weeds, and mulching also has an antagonistic effect on weeds. The mulch can either be material brought in, or leaves and other litter from the coffee and shade trees. Also, some nurse crops will discourage and smother weeds, an effect which may last until the coffee trees are large enough to discourage both the weeds and the nurse crop because of their shading. Shade trees can also reduce weed growth because of shading, as mentioned above. Weeds can never completely be prevented by cultural methods however, and therefore are either removed mechanically or by the use of herbicides (Willson, 1985). The latter is not a method that Max Havelaar desire in their sustainable development goals, but they are aware it occurs due to pressures on the farmers (to be expanded on in the case study).
Chemical weeding methods are widely practised now
in general, although not so much in the Kagera region. Although
some argue that chemical weed control has certain advantages when
compared to mechanical weeding, there are many disadvantages,
some of which must be seen in the context of the culture and farming
system of the people growing the coffee. For instance, according
to Willson (1985), the weed flora will change as herbicides are
used, and species resistant to the herbicides will become predominant.
In these cases the farmers will have to purchase and use new herbicides
as these changes occur. In the area of our case study where the
farming is predominantly subsistence-based, the costs of pesticides
as well as fertilisers is often prohibitive, making this an impossibility
for most of the farmers. Another way in which pesticides require
extra investments is that they lower the pH of the soil, leading
to increased leaching of nitrogen. Thus, a farmer who wishes to
maintain a constant production will have to increase the amount
of nitrogen-containing fertiliser to the soil. These points will
be expanded upon later, in the case study.
Arabica coffee trees begin to bear fruit 3-4 years after planting. They are in full bearing after 6-8 years, the yields increasing steadily until the age of 15 years. For Robusta coffees, the period from flowering to the berries being ripe is 10-11 months, even a year, while the time required for Arabica is between 6 and 9 months (Wrigley, 1988:428). The harvesting season stretches over 4 months for Arabica coffee, while the season is a little longer for Robusta.
There are two methods of processing coffee, the
dry- and wet processes. Mild Arabica, which is the best quality
coffee, is processed by the wet process. Most of the Robustas
in Africa are processed by the dry process. If berries of different
levels of ripeness are harvested, then only the dry process can
be used (Wrigley, 1988: 435). The wet process is more costly than
the dry process, hence it produces a better quality coffee as
the beans are more ripe. The later is more commonly practised
in Kagera, which is something that Max Havelaar could conceivably
see as a limitation at present.
The beans are removed from the berries by pressing them out (which is why the berries must be ripe); traditionally this has been done manually, but now it is also done by machine. The beans are then washed, and fermented (Rothfos, 1985). Under fermentation the pectin in the slimy hull is enzymatically broken down, which then can be washed off with water (Bach, 1992; Rothfos, 1985). After fermentation, the beans can dry much more quickly because only the parchment layer and silver skin are left. The dry coffee beans are then called pergamino coffee; first when the two layers are removed it's called green coffee. Coffee processed with the wet method is called 'washed'.
With the dry process the berries are dried in the sun, which takes from 10 days to 3 weeks (Bach, 1992). To prevent rot, the berries have to be turned often. After drying the coffee is 'shelled', freeing the beans from the berries. This can be done with stones or hand-mills, but is often done at specific 'shelling factories' (Bach, 1992). The beans are at the same time polished to remove the last membranes, and then sorted. This sorting is either done manually or with electronic equipment. Coffee processed by the dry method is called 'unwashed'.
Disease is a barrier for not only the producer, but it has an effect on the whole commodity chain. There are a few hundred different fungi and bacteria which can attack coffee, whereas only a few are of economic importance. Of these diseases, the most widespread and having caused the most damage, is Coffee Leaf Rust (CLR). Less widespread, but more serious where it occurs is Coffee Berry Disease (CBD). The losses from CLR and CBD are very great, and the costs of controlling them high (Wrigley, 1988). In Tanzania, CLR is the greater problem, and will therefore be described here.
The impact of CLR: Because the diseased leaves are
prematurely shed the amount of vegetative growth is reduced, which
in turn sets back the following season's yield and quality (Waller,
1988: 225). The occurrence of the disease is partly dependent
upon the species of coffee cultivated, with Coffea. Arabica being
the most sensitive. Infection requires rainwater, limiting the
spread and development to the rainy season, but maximum incidence
usually occurs in the dry season because of it's long incubation
period (2-6 weeks, depending on temperature) (Waller, 1988: 225).
Development of spores requires moisture and is counteracted by
high temperatures; germination is inhibited by strong light (Bach,
1992: 41). Shade is not a factor which appears to favour the spreading
of the disease (Coste, 1992), but it may help maintain a moist
atmosphere which favours the formation of spores (see above).
However, shade trees can inhibit infection by protecting the coffee
trees from wind-blown spores. According to Bach (1992: 41), the
spreading of CLR can be greatly affected by different cultural
techniques. Pruning should be done so that new leaves are formed
during the time of year with the driest and least windy weather.
According to Rothfos (1985: 139), attack by CLR can be prevented
by having plenty of room between coffee trees, good ventilation
in the tree crowns, mulching, use of manure and weed control (weeds
tend to spread the disease). This illustrates that the disease
can at least partially be combated with proper cultivation techniques.
As we will discuss in our case study, there can for some farmers
be socially- and economically based disincentives to investing
the time required for upkeep of coffee trees; given the fact that
CLR is a wide-spread disease in Tanzania, these factors could
lend to a decline in quality and productivity of the coffee trees.
This section, as the title implies, describes the cultivation of coffee based on organic farming methods. As described in previous chapters, one of the objectives which producer organisations have participating in Max Havelaar/TransFair/Fairtrade, is
Therefore, the purpose of this section is to point to the more 'environmentally friendly' cultivation techniques described in chapter 3, forming part of the basis for an assessment of the sustainability of the coffee production, and thereby the agroecosystem of which it forms a part, in the area of our case study.
According to Levelt (1991, in Bach, 1992), an important element in organic coffee farming is the protection of slopes against erosion, e.g., through terracing. Other methods are the planting of cover-crops in especially vulnerable areas, or allowing weeds to grow in areas which are considered vulnerable.
As previously mentioned, there are many advantages in using shade trees on coffee plantations; many of these are in themselves more environmentally friendly - such as reduced needs for herbicides because of shade trees' negative effects on weeds. They are therefore an indispensable part of organic coffee farming. Also, when the shade trees give either food or an extra income to the producers - such as when bananas are grown - this gives the producers a higher degree of self-sufficiency, which is another aspect of the concept of sustainability. An important aspect of organic farming is a greater biological diversity than with intensive methods, which means greater numbers of animals which prey on the insects which attack coffee trees, giving more biological stability.
Cover crops and intercropping offer some of the same advantages as shade trees, e.g. nitrogen to the soil in the case of legumes, higher degree of self sufficiency because of more food- or export crops, counteracting wind- and rain erosion, improvement of soil texture, keeping weeds away, etc.
On organic coffee farms, weed control is solely carried out with the use of mechanical/biological methods (Bach, 1992: 75). The biological methods are the preventative measures discussed above - the use of shade trees and cover crops, because of the antagonistic effect which they have on weed growth. Weeding is typically carried out with the use of machetes. Weeds are cut down but not removed, in order to curb erosion.
In considering organic methods of coffee cultivation, a number of questions arise regarding what incentives and barriers there are for organic coffee growing in Bukoba and Muleba. Central in this discussion is the fact that in order to sell coffee on the Fair Trade market it has to meet international standards of certification. These standards are defined in the International Federation of Organic Agricultural Movements (IFOAM) basic requirements and guidelines for organic coffee and tea cultivation (see appendix). As we will discuss later in the report, there are possible incentives for the producers within our case study to start growing their coffee organically (certifiably), for instance the extra price which organic coffee fetches on the market, and the fact that many of the IFOAM requirements already are covered by the smallholder farmers in the region. However, barriers exist, for instance in the form of costs (e.g., the price of having the coffee certified).
In this chapter we have described the various growth-
and environmental requirements for the coffee plant, which define
the physical limits to where and under which conditions coffee
can be grown. Furthermore we have described methods of cultivation,
with a focus the more environmentally sound ways of growing coffee.
Following on from this we will illustrate development in the Kagera
region and in Tanzania seen in a historical perspective, which
is necessary to understand the farming system under which coffee
is grown today. A description of the indigenous agricultural farming
system in Bukoba and Muleba will show that besides the physical
limits described in this chapter, a long list of factors related
to both the economy and to social and cultural traditions constitute
the framework for coffee cultivation. This will give the basis
for an analysis of the farming system in our case study as it
is now, and provide part of the framework for later assessing
the possibilities of Fair Trade in the region.
In this chapter we will try to examine the historical facts leading up to the United Republic of Tanzania's present state as an agrarian nation hopelessly indebted and almost entirely reliant both on foreign aid and on the export of agricultural products, such as coffee. The development of the co-operatives will be described, with a focus on their importance in agricultural production and on the economy; furthermore, the changing government policies towards the co-operatives and how this has influenced agricultural production will be described. Moreover, we will look at factors which have played a part in the development of the farming system of the Bahayan small holder of Bukoba and Muleba districts, with a main focus on policies on coffee production implemented by the Colonial Government, and later by the Government of the independent Tanzania.
Tanzania is considered one of the poorest nations
in Africa, indeed in the world. The official GDP was estimated
to be 100 US$ in 1993 (Landestrategi for Tanzania p. 4, Danish
Foreign Ministry and Danida 1996). It is typical for an African
country in terms of macro-economics, with a deficit on the trade
balance, i.e. imports are much larger than exports. The Tanzanian
economy is to a large degree dependent upon foreign aid, as export
earnings only cover about one third of the import costs. Presently,
the population size of Tanzania is about 26,7 million people
, with a growth of about 3 percent per year. Between 70
to 80 percent of the population lives in the rural sector of Tanzania,
and the growth of the population in the cities is rapidly increasing.
The agricultural sector makes up a very dominant part of the Tanzanian economy, contributing with about 50 percent of the GDP and about 80 percent of the export earnings (Britannica Macropedia 1989, vol. 2). In 1988 The Bureau of Statistics' labour survey showed that 80% of the economically active population were employed in "traditional agriculture" (EIU, Country profile 1995-96). Therefore, agriculture plays an important role and has done so since the colonial days. The changing governments have realised this and have seen improving quality and quantity of agricultural production as the key to creating a sustainable macro economy. Several attempts have been made to increase the export crop production, as we will discuss later.
The first integration through trade occurred thousands of years ago in Tanzania, hence the strong mercantile traditions found in the indigenous society today. Tanzania was visited by sea traders from approximately 500 years BC coming from different regions along the Indian ocean and the Persian Gulf. The trade they were interested in was mostly ivory, gold, and other luxury-items, but also mangrove-poles for building materials (Coulson 1982:10-11). This lead to the establishment of caravan routes and settlements along these caravan routes, often by Asian traders who mainly transported gold and ivory from the interior to the coastal areas, and weapons and ammunition in the other direction.
The Portuguese were the first Europeans to round the Cape of Good Hope in 1500 to gain control of the trade with gold on the East African coast. Soon they lost interest however, because they were more interested in India (Elkjær and Serup Rasmussen 1993:13). The Arab influence became dominant, and by the middle of 17th century, the Portuguese were no longer present in Tanzania.
Before the Portuguese left they had introduced new food crops to Tanganyika: maize, cassava and sweet potatoes from South America. These could be grown as an alternative to the already present sorghum and millet which were drought-resistant, but relatively low-yielding. In addition, rice was introduced by Asian traders and spread along the caravan routes (Coulson 1982).
The Bantu tribes living in precolonial Tanzania were farmers and pastoralists. The resident farmers were small-scale farmers and grew mainly millet, sorghum and bananas. This meant that they preferred to live in the highlands where there was plenty of precipitation (Coulson 1982), such as around Kilimanjaro and along some of the slopes in the Kagera region. At the end of the 16th century, two Nilo-Hamitic tribes called the Bahima and the Bahinda came from Ethiopia to an area around present day Bukoba and Muleba, bringing with them long-horn ankole cattle and imposing themselves upon the local hoe-farming Bantu, the Banyambo. They established a pastoral kingdom there, and kept the country open by extensive grazing and fire-farming - which reduced the original rainforests considerably. Their economy was at that time based on cattle. In the later part of the 19th century, there were approximately 7 head of cattle per person in the area, and bananas and sorghum were growing on the slopes (Friedrich, 1968).
The production system was based on the use of simple tools and was often organised in collectives. The local Government was constituted by a chief to whom the rest of the collective paid tax. This had its practical reasons in the event of emergencies in which case the local authority could redistribute the accumulated stores of food to ensure the survival of the tribe (Raikes 1978). The good land for cultivation was plentiful and therefore shifting cultivation was used. The land would be cultivated for about two to four years and after that it would lay fallow for several years (Collier and Lal, 1986 s. 21-23). The ownership to the land was common, and the system was often a feudal one in which the authority made the decisions about land distribution among the farmers. The rights to specific plots were transferred through inheritance. This tradition is still practised today. The farmers and the pastoralists traded with each other by exchanging goods, and there seemed to be a general tendency to regard wealth as an assessment of pieces of cattle. They therefore traded food for cattle with each other. The cattle were used for providing security for the farmers. In good years the livestock would produce manure that could be used for improvement of crops, and in the bad years with little precipitation, they could resort to using the livestock for food. Before 1800 the most advanced societies were in the mountainous areas where a food surplus could be gained through the cultivation of bananas which had been introduced to East Africa through traders from South East Asia. Oral traditions has it that the chiefs organised the transport of tons of grass from flood-plains to mountainous areas to build up the fertility of the land around the villages. This was supposedly done in the areas of West Lake region where they grow coffee and banana as intercrops today. (Coulson 1982). The present day agroforestry system of the Bahaya is a result of the migration and subsequent adaptation of one cultural system of production into another (see below).
The master plan of the colonial masters, first the Germans and later on the British, was to make export crops cheaply available to the homeland. It was for this reason that the Germans introduced new crops in Tanzania besides coffee, sisal, cotton and rubber (Mongula 1987).
In Bukoba and Muleba, robusta coffee had been grown for many years before the Germans arrived (Coulson 1982) but it was only under the Germans that coffee became an export commodity in Tanzania. In the beginning of the period of German colonial rule (1884-1916), export crops were meant to be grown by European settlers only, on large plantations; therefore restriction policies were implemented to prohibit competition from the Tanzanian farmers. To provide cheap labour, a hut tax was introduced so that the farmers would have to work for money on the plantations as they were not allowed to grow the crop themselves to provide them with the necessary cash to pay the taxes. But as European settlement failed, the colonial administration had to change its policies towards African export crop farming (Coulson 1982, Mongula 1987:58). The growing of robusta coffee was encouraged by the German administrators and the White Fathers missionaries, who also introduced arabica coffee. The German administrators also attempted to force chiefs to allow cultivation of coffee by their subjects, thus giving up their privileges of being the only ones allowed to grow it. This was according to Rald (1975) the start of coffee cultivation for the individual smallholder farmers, although still involuntary at that time. At the end of the 19th century, some major changes were brought about by the appearance of rinderpest, which killed approximately 90% of the cattle, and also by the spread of the bush and tsetse flies, which meant that large grazing areas were lost for the cattle.
The breaking down of the political order together
with these factors led to the Bahaya taking over and further developing
the land-use system of the Banyambo, who had farmed the most fertile
areas of the otherwise infertile region, namely the hill plateaus
and lower slopes. This was according to Friedrich (1968) the time
at which the Bahayan economy began to be based on permanent banana
groves instead of on cattle.
This period (from 1916 to 1961) started with an even stronger enforcement of expanding coffee cultivation than there had been under German rule (Rald, 1975). The British administration made it compulsory in 1916 for each family to plant 100 coffee trees among their banana trees. Although widely resented, this led to an increase in coffee production from 493 tons in 1910 to 10,882 tons in 1935 for Bukoba, Muleba and Karagwe districts. The agricultural policy until 1936/37 was one of quantitative measure, no qualitative standards being imposed on the farmers (Rald, 1975). There was according to Smith (1989) a lack of incentives in the period both for the farmer, who felt exploited, and the small merchant, to implement quality control measures for the coffee. This and the administration's lack of being able to control either farmers or traders led to ever-worsening cultivation methods. Overseas buyers in the late 1920's refused many shipments of coffee; thousands of bags were destroyed. This quality problem was exacerbated by a drop in the world market price, and from 1928 to 1930 the coffee revenues in Bukoba (at the time Bukoba, Muleba and Karagwe) dropped to one quarter.
To try to come to terms with the problem the administration passed the 1932 Bukoba Coffee Export Regulations and the 1926 Plant Pest and Disease Regulations, amended in 1936. Hence the administration switched to an agricultural policy of qualitative measure. The export regulations were inforced by random inspection of export coffee to make sure that it met international FAQ(footnote) standards (an industrial standard, 'fair average quality'). This according to Smith had the desired effect, as merchants who were afraid of having their goods seized were more careful about buying coffee from the producers. The Plant Pest and Disease Regulations were "counterproductive and unenforceable" however. The rules formulated in 1926 were as follows:
1. Trees must be weeded and the weeds burned;
2. Bananas must be thinned from the coffee plots;
3. Diseased or weakened trees must be pulled out and destroyed;
4. Coffee trees must be spaced at certain distances;
5. All new coffee plantings must be approved by the chiefs;
6. Any sick trees must be reported to the chiefs;
7. No grower must possess picked unripe coffee;
8. Old coffee beans must be burned;
9. No drying must be done on the ground;
10. The unhusked coffee must be adequately dried;
11. Hulled coffee must be checked for extraneous matter and defective beans;
12. Dirty plantations must be cleaned.
There were very stiff penalties for violating rules
7-13, with imprisonment for 'repeat offenders'.
The amendments to the rules in 1936 were according to Smith even
stricter:
1. Only such coffee seedlings may be planted and only such seed planted in nurseries as have first been approved by the Agricultural Department.
2. Every individual wishing to plant coffee must plant not less than 250 trees. All trees should be planted nine feet apart.
3. Before planting up a plot every individual must satisfy the Agricultural Department as to the suitability of the soil.
4. The land must be prepared to the satisfaction of the District Agricultural Officer or his nominee before an individual may plant coffee.
The penalty for not complying with these amendments was that the 'offender' could risk having all his/her plants pulled up. This was according to Smith "....a direct challenge to the basic land-use pattern." The farmers greatest fear was either coffee plants being pulled up or being forced to extend the coffee cultivation "....beyond the limits compatible with their diversified form of farming/extra-agricultural enterprise." When the British attempted to apply the rules in early 1937, it culminated in rioting. Since the first attempt the British made no further efforts to re-establish the coffee rules.
Thus, when the British colonial masters attempted
to force standards of quality on the coffee producers in order
to address the problem of declining coffee quality, the farmers
felt that both their subsistence crops and their main source of
income (from coffee exports) were being threatened. The population
responded strongly; some resorted to violence.
As a result of the riots, the colonial administration abandoned the direct intervention approach and switched over to one based on incentives. They took over coffee marketing from 'Asian' merchants in 1938, and the state consigned it's agents to purchase the whole coffee crop at slightly higher prices than those of the 'Asian' merchants. In order to facilitate collection of the coffee, local co-operatives which had begun to organise in the 1920's were encouraged to supply the coffee to the ministry of food. After the war the state gave up it's monopoly on buyer's rights, but still encouraging the co-operatives. The Bukoba Native Coffee Board was established in 1947, and was given the sole rights to buying coffee from the regional agents. One reason for creating the Board was to partially meet the demands that control of the crops belonged in the producers' hands; moreover, it was hoped that it would improve the quality of the coffee. The Bukoba Native Co-operative Union (BNCU) was established in 1949, and took over the functions of the coffee board. The BNCU, which was favoured by the administration despite alleged corruption, acted as a holding company for 67 companies in the Bukoba area and 7 on the Karagwe plateau by 1951. The main idea behind the co-operatives was to redistribute the profits (which previously had gone to the 'Asian' traders), among the farmers in the form of higher producer prices. This was intended as an incentive for the coffee producers.
The national economy of Tanzania has gone through
vast changes since the days of being under political and economical
administration from Great Britain. Following Tanganyika's
independence in 1961, efforts were made to implement a programme
in which foreign investment would fund massive capital-intensive
industrialisation and agricultural development projects. During
this period, urban-rural income differentials became more pronounced,
and rural-based development was ignored. Most of the programmes
failed because of poor management, problems with transportation,
investments in the wrong technology etc. By the mid- 1960's, it
was clear that Tanzania was becoming increasingly dependent on
the North. To address the imbalances, President Nyerere presented
the Arusha Declaration in 1967. In this document the governing
Tanzanian African National Union (TANU), later named Chama Cha
Mapinduzi (CCM), questioned the benefits of modernisation policies
by challenging the basic tenets of capitalism. This presented
a form of 'African Socialism', which was an attempt to bridge
the gap between modern socialist statesmanship and the needs of
Tanzania's predominantly rural peasantry. There was an attempt
to move away from foreign-capital and technology-intensive industrialisation,
and priority was given to the development of the agricultural
sector through ujamaa vijijini. (Kaiser, 1996).
We believe the ujamaa programme seems to be
the most controversial initiative taken in recent Tanzanian history,
the effects of which (mainly detrimental) can still be found today,
underlying social inhibition towards development. The CCM forced
a villigisation programme upon the rural societies to restructure
the entire agricultural production of Tanzania which, among other
things led to forced migrations of entire village populations
and amalgamation of small tribal communities into larger villages.
The purpose of this program was to enhance the output of crops,
especially those meant for export. This failed because of a combination
of factors, the most important one being that the investments
in the agricultural sector were put into technology, making the
production less work-intensive and more capital-intensive. As
Tanzania was not able to produce fertilisers, pesticides etc.,
it was necessary to import it, thereby increasing the trade deficit.
Furthermore, the agricultural output did not increase; on the
contrary it decreased drastically (Table with development in agricultural
production). This was among other things due to social problems
connected to the forced amalgamations of societies and investments
in the wrong kind of technology. However, not everyone was moved
during the massive villagisation; in parts of the country where
population density was high, and most of the land cultivated with
permanent crops, already existing settlements were demarcated
and called 'villages'. This was also the case for Bukoba and Muleba,
the area of our case study.
The Arusha Declaration in 1967 marked the start of
State control over the economy as a policy. It stated that all
major means of production and exchange should be owned and controlled
by the state and the co-operatives in order to build up socialism.
Much emphasis was put on co-operatives, which by 1968 handled
49% of the country's annual exports. One important reason for
the independent government both encouraging and supporting the
co-operatives was, as had been the case for the British colonial
government, that they felt that the producer would this way bypass
the middle-men. Thus, by reducing the exploitation of the producers,
their economic welfare would be improved. The independent government
perceived co-operatives as tools for economic development for
the smallholder farmers. Already in the first independent cabinet,
The Ministry of Co-operative and Community Development was formed.
Every major government policy or plan outlined and emphasised
the role of co-operatives in the economy in the first years of
independence, and that the government would promote co-operatives
via services such as training co-operative staff and providing
free auditing. In these policies, the relevance and importance
of the co-operative movement to agricultural development was never
questioned.
However, the state preferred central organisations
which were directly controlled, as opposed to mass grass-roots
organisations. Therefore since the adoption of the ujamaa
policy, parastatal companies and villages gradually took over
the work formerly carried out by the co-operative-unions and primary
societies. The parastatal companies (crop authorities) were given
the power to buy crops internal and external marketing, while
the work was formerly done by the co-operative unions. The parastatal
companies also took over the role of the co-operative unions in
supplying agricultural inputs credit, with village governments
acting as go-betweens. There was according to Maghimbi a contradiction
between co-operative unions and their affiliated primary societies,
and the central and government owned and/or controlled institutions,
such as parastatals and villages. The government attempted to
resolve the contradiction by encouraging ujamaa villages
to register as co-operative societies, but this failed for the
reason that the villages weren't co-operatives. The farmers in
favour of co-operation knew that registering the villages was
pointless, since the villages weren't voluntarily formed economic
institutions controlled by the members. Shortly after, in 1976,
the co-operatives were abolished, as described below (Maghimbi,
1990).
The Arusha Declaration was followed by government nationalisation of companies, commercial and financial institutions and farms, and the implementation of social programmes to illiminate illiteracy and secure access to clean drinking water. New parastatals were created, and existing ones were expanded. The private sector was suppressed, and the government played a more interventionist role in order to control and regulate the steadily increasing state activities; this regulation was not confined to the state sector, but embraced the whole economy. In the first six years, these initiatives appeared to have a positive effect on the economy. The GDP had annual growth rate of six percent.
The policy of price regulation was implemented in
1973, and by the 1980's, hundreds of goods were under price control.
Allocation of resources was done through regulations rather than
incentives. Furthermore, the centralization of the economy was
accompanied by centralization of the civil society, a term referred
to as statism. Various organisations were incorporated into the
ruling party, including trade unions and the co-operative movement.
The co-operative movement, which had associations throughout most
of the peasantry, was later abolished in 1976. These co-operatives
had been mass organisations mostly serving small scale farmers,
but the dominant group at the top of the party and government
had seen independent peasant organisation as a threat. The government
specifically abolished the co-operative unions and primary societies,
which had served as the peasant marketing institutions and suppliers
of farm inputs since the 1930's; thus the abolition was specifically
biased against the rural areas and farmers. According to Maghimbi
(1990), whatever good results the co-operative unions and primary
societies had achieved were lost as the villages governments and
parastatals failed to perform the tasks formerly carried out by
the co-operatives. The marketing system almost collapsed; supply
of supply of farm inputs and credit was disrupted, or in some
villages ceased. From this time onwards, all significant societal
organisation and mobilisation had to be done within the party-state
organisational structures.
According to Kaiser (1996), the degree to which Nyerere's
policies were successful has been the subject of enormous debate,
but that they definitely did not achieve the intended results
of agricultural, economic, and industrial self-reliance. All these
factors led to a crisis in the `80's, which was political as well
as economic (Kiondo, 1976). During the final years of the ujamaa
era, basic consumer goods were rarely available, the transportation
infrastructure was collapsing, and the government was unable to
provide many of the basic health-care and education services which
had been promised after the Arusha Declaration. As described above
however, Maghimbi (1990) puts at least part the blame for the
declining agricultural production from the mid 1970's on abolition
of the primary societies and co-operative unions.
In this section we will describe the period in the
1980's and early 1990's, during which the government implemented
a series of adjustment programmes in an attempt to come to terms
with the economic and political crisis which had manifested itself.
We feel it is interesting to assess the reasons behind the
present state of Tanzania due to problems created by these implemented
programmes. Also it serves as a comparison (for later discussion)
between past internally imposed development plans as opposed to
the adjustment plans and objectives set externally by Max Havelaar
towards sustainable development. We recognise that they are quite
contrasting in the way they are implemented, but they both hold
the same goals - that of sustainability through development.
According to Kiondo (1995), the trends of the 1980's
in Tanzania came as reactions to those of the 1970's. They were
characterised by demands for multi-party democracy, diminishing
quality of state governance, a crisis in the balance of payments,
acute shortage of consumer goods, increased dependence on the
International Donor Community (IDC), development of a second economy,
an increase in activities of NGO's, and as a response to the economic
crisis, as "experiments in finding solutions for the crisis",
the appearance of various structural adjustment programs.
The National Economic Survival Programme, or NESP
(1981-1982) and the Structural Adjustment Programme, or SAP (1982-1986)
were implemented in the final years of Nyerere's leadership, in
order to turn the economic stagnation around (Kaiser, 1996). These
self-imposed programmes were an attempt to ward off acceptance
of IMF/World Bank demands, which Nyerere believed was contrary
to the concept of self-reliance as it had been expressed in the
Arusha Declaration. After almost six years of conflict between
World Bank/IMF officials regarding economic policy and access
to international capital, Tanzania implemented an Economic Recovery
Programme (ERP), which was supposed to address itself to social
problems which were a result of liberalisation (Kaiser, 1996).
The first programme from 1982 (NESP) was an appeal
to workers and peasants to increase production. The government
re-emphasised it's commitments to the "basic needs approach",
by promising social-service improvement for the population. Furthermore,
it utilised mobilizational stategies of implementation which earlier
had been successful, for the most part urging the producers to
increase production via directives and moral exhortations to the
producers. The commitment to basic needs was based on assumed
help from friendly donor countries, and therefore failed. Negotiations
between IMF and Tanzania had generated criticism towards it's
statist policies, which led to even friendly donors being convinced
that Tanzania had to undertake market-oriented changes. Also,
because of 'aid coordination' among donor countries in the 1980's,
failure to reach agreements with the IMF resulted in pressures
from the rest of the donor community in favour of the IMF. Of
the objectives for increasing production with the programmes,
only the cashewnut was successful.
After the failure of the NESP, the World Bank financed
an advisory group (called the Tanzania Advisory Group), who worked
out the basis of what became the first Structural Adjustment Programmes,
which ran from 1983 to 1986. The report from 1982 which formed
the basis of the programmes was less ideologically inclined than
the previous programmes, and unlike the earlier, the analysis
of the crisis acknowledged policy weakness as a contributing cause.
The stated aim of growth was still it's distribution however,
and the basic socio-economic objectives of the country. New agricultural
reforms were introduced, such changing the land-tenure system
by introducing an element of private ownership. This programme
also failed to gain support of the donor community, although a
few policy changes were possible to implement. Between 1982 and
1984, the government devaluated the Tanzanian shilling with 32%
compared to the US dollar. Cuts were made in development budget
spending, as well as in the defence and social services, in favour
of rehabilitation and maintenance in productive sectors.
Improvements were made under these programmes in
distribution mechanisms in the agricultural sector; incentives
were created in export production. Only 75 essential goods were
under price control by 1984, and from March to June of the same
year prices for export crops were raised by 40%, while prices
for food crops were raised by 80%. Taxes on all exports were abolished,
and exporters were now permitted to keep 10% of their export earnings
in foreign currency. In this same period came two important political
reforms as well, which reflected a certain degree of retreat from
statism: legislation was enacted both to re-establish local government
and to re-establish co-operatives (these had been abolished in
1976). The background for re-establishing the co-operatives was
that there had been enormous problems with the crop authorities
both in buying produced crops, and also in supplying farm inputs
and credit. Supplies often arrived late or not at all; when it
did, the producers often felt that the price, interest and overhead
costs paid was far too high. According to Maghimbi (1990), the
government would have re-instated the co-operatives even without
the complaints of the producers, which were wide-spread. The reason
for this was that it was feeling the reduced production in terms
of the foreign exchange crisis, reduced government local revenue,
shortage of food in urban areas and the accompanying inflation
caused by unproductive, wasteful expenditure of the government
crop authorities.
In 1984, SAP's were implemented which according to
many analysts represented a "victory for the private sector
in the country", and "...the first tentative steps towards
effecting the IMF conditionalities." (Shivji, 1988 in Kiondo,
1995). These entailed further cuts in government spending on social
services, removal of subsidies on staple foods and agricultural
inputs, introduction of user fees on various social services,
further devaluation of the shilling by 26%, and recognition and
promotion of the private sector in the country's economy.
According to Kiondo, these reform measures indicated
a clearing of the way for agreements with the IMF. After Nyerere's
retirement in 1986, the agreement was signed in 1986 - but first
after the adoption of a new adjustment program, the ERP. Many
of the aims were the same with the ERP as the previous SAP's,
but there were differences in some of the ways to achieve the
goals. The ERP aimed at restoring output via use of appropriate
incentives for production, improvement of marketing structures
and increasing resources available to agriculture. A significant
change from the previous adjustment programmes was that ERP openly
favoured directly productive activities over social services.
After signing the IMF agreement, the social sector ".....was
found to be quite adversely affected.", and ".....the
slight improvements in the economy failed to have a trickle-down
effect." (Kiondo, 1995). As complaints from the less advantaged
reached authorities higher up, the government encouraged the World
Bank to devise a programme which would more cover the needs of
the poorest groups in society. A new adjustment programme was
created for 1989/90-1991/92, called Economic and Social Action
Programme (ESAP). Although there are claims about this programme
paying more attention to the social sector, the program is according
to Eriksson basically a continuance of the earlier production-oriented
programmes (Eriksson, 1991 in Kiondo, 1995).
Some of the cumulative effects of the years of adjustment programmes
in Tanzania are:
One of the major shortcomings of the SAP's implemented by the individual governments in the 1980's was the "failure to address environmental deterioration, especially the potential environmental impacts of policy-based lending (Reed, 1992 in Bagachwa, 1995). It is now widely recognised that natural-resource degradation and increasing pollution levels are becoming a major concern of the developing countries; in sub-Saharan Africa, where 71% of the population work in agriculture and over 80% live in rural areas, deforestation, soil-mining and overgrazing are very serious problems. Therefore, there has according to Bagachwa (1995) been "a marked shift from the conventional focus on economic efficiency to sustainable development." He goes on to say that part of the recent interest in the environment in development planning derives from the often close link between poverty and the environment.
Tanzania's situation provides a classic illustration of the main theme of the World Commission's report, the intimate relationship between poverty and environmental degradation. "There is an economic crisis threatening to destroy the whole nation-state fabric that has been built up over a century of colonial and independent rule." (Stock, 1995)
"Without fundamental changes in the political-economic relation that underlie the current crisis in Africa, development from within is unlikely to achieve more than small sporadic victories for the disadvantaged minority." (Stock, 1995)
The proponents of development from within often refer
to the failure of conventional, 'top-down' approaches and argue
that universal solutions should be rejected in favour of strategies
that are grounded in the ecological and social economy. Thus,
according to the Brundtland Report (1987): "Poverty is
a major cause and effect of global environmental problems. It
is therefore futile to attempt to deal with environmental problems
without a broader perspective that encompasses international inequality."
This chapter is intended to illustrate the extent
of the complexities of the indigenous farming system within the
Kagera Co-operative Union, Tanzania. From describing various socio-economic
characteristics, an assessment of the impact to which Fair Trade
could have in the area is possible. The topographical, climatological
and hydrological features of the area define the suitable limits
for which coffee can be successfully grown (as described in the
previous chapter). We have analysed the complex agroforestry system
practised, which is subsistence based, but in which cash crops,
and especially coffee, also are extremely important. Moreover,
we have looked into aspects of the demographic structure within
the society, namely labour divisions, population growth and processes
of migration. These are all factors which relate to what the inhabitants
of the region choose to grow, e.g., the balance between subsistence
and cash crops on the individual farms. A knowledge of the primary
level farmer community links to analysing the co-operative's influencing
role (particularly in production and marketing of coffee) in the
following chapter. By understanding these dynamic factors and
processes, we intend to gain an insight into the implications
of an alternative marketing of their major export commodity, coffee.
Lastly, we aim to discuss how the appearance of Fair Trade could
affect the level of sustainability, in the sense of how the ability
of the agroforestry system to sustain the population could be
affected.
The area covered by KCU consists of the two administrative districts Bukoba and Muleba, both of which are part of Kagera region in north-west Tanzania. (See map 1 below.) The other districts in Kagera are Ngara, Karagwe and Biharamulo. Previously both Karagwe and Muleba districts were part of Bukoba, but became independent districts in 1958 and 1978, respectively (Nicolaisen et. al 1992).
Bukoba district is 5,396 km2, Muleba
being somewhat smaller with an area of 3,444 km2 (Jørgensen,
1995); in comparison their total area is almost half the size
of Sealand. The members of the Co-operative Union come from throughout
this vast region. The sheer size that the KCU covers in terms
of space and members is crucial to our understanding of the complexities
involved in overall management, which partly determine the mechanisms
of coffee production.
Map 1. Kagera Region: location and administrative division. from
Tibaijuka, 1979.
The following is a brief summary of the topography
of the area to enable an insight into the natural environment
on which coffee production is based. The districts consist of
a series of mountain ridges running north to south, parallel to
Lake Victoria. The first ridge forms the Bumbire islands 16 km
east of the shore. The second and third ridges are 1200 and 1560
m above sea level, respectively, the mean lake level being 1125
m. The Ngono river and it's tributaries form a valley and drainage
system between the two ridges. The ridge summits are quite flat,
and vary from 1 to 20 km. Upper slopes are generally steep, while
lower and middle slopes are less so. There are many small streams
running from east to west; these form peninsulas of usable land
in the swamps.
The area is dominated by Bukoba sandstone, which
gives rise to a variety of soils ranging from pure sands to loamy
sands to sandy clay. The dominating soils on the hills and slopes
are ferralsols. (See maps 2A and 2B, which show the geology and
soils of the Kagera region.) Because of the tropical climate (expanded
below) with it's high temperatures and abundant precipitation,
leading to heavy leaching, the decomposition of minerals has been
accelerated. Due to partial lateralization and heavy leaching,
the soils of the region are considered poor. Despite their being
rich in organic matter they are poor in phosphorus, potash and
calcium, and lacking in trace-elements including copper, magnesium
and molybdenum. Consequently, coffee and banana cultivation is
concentrated in areas with a higher fertility, primarily on the
slopes and hill-plateaus (Friedrich 1968). There is also a relationship
between minimum soil depth required for crops grown and amount
of rainfall in the area; only in high-rainfall areas such as around
Bukoba Town can a soil having a depth of less than 150 cm be used
for cultivating bananas, coffee or tea. In other parts of the
region, a depth of at least 180-200 cm is required for these crops;
as we described in the (bean chapter), the decisive factor here
is the size of the soil's water reserve during the last part of
the dry season (Rald 1875).
Bukoba and Muleba have an equatorial climate, with very little variation in the mean monthly temperature (about 20C) throughout the year. Daily temperatures are between 15C and 25C (+/- 4C). Rainfall is well distributed throughout the year. There are two peaks to the wet season, a major one between March and May, and a minor peak between November and December. The dry season is from June to September, the driest month being July. According to Rugalema, et. al (1994), this bimodal rainfall pattern does not apply to the Lake Victoria littoral zone, where it is possible to receive 150 mm of rain per month even in the 'dry months'. Maximum rainfall is in the vicinity of Bukoba town (over 2000 mm per year), with amounts decreasing as a function of distance from the lake (N.B. distance decay theory, Nystuen 1968). The lowest rainfall occurs between the Bukoba ridges and the Karagwe ridges, where the rainfall drops to 762 mm. There is a similar trend from north to south, both along the lake and on the plateau areas. (See maps 3(A) and (B), which show rainfall in the Kagera district.) These differences in rainfall greatly affect the amounts of crops produced; e.g., the larger amount of precipitation in the northern part of the area allows the farmers to harvest beans twice a year, while in the southern part only one yearly harvest is possible. In terms of distribution and quantity there is much variation from year to year. This can greatly affect the distribution of labour input, e.g., in certain years the coffee harvest has started in late May while in other years it has started almost a month earlier.
Rainfall distribution is a limiting factor to production consequently. From looking at the diagram on the following page we can see that rainfall probability is higher in the North East part of the region which is a high productivity area, due to good soils and other factors as well.
Other areas are of course cultivated, but are considered
more marginal, due to poorer quality soils and low rainfall. These
environmental conditions put pressure on the population of producers
in terms of land carrying capacity - the extent to which the resources
of the environment can maintain the population without a tendency
to increase or decrease. In short the coffee cultivation is in
part determined by a variety of environmental factors .
Maps 3(A) and (B): average annual rainfall and rainfall probability
for the Kagera Region from Tibaijuka 1979.
According to Rald (1975), the rural society of Bukoba and Muleba districts are extremely diverse, with a broad range of living standards and ways of life, from mixed economies of wage earning and farming to pure subsistence farming
The native inhabitants of the area, the Bahaya, cultivate
land for food production and cash crops. Some have livestock,
but they are also involved in other economic activities such as
production of banana beer (Rald 1975). The majority of the inhabitants
in the Kagera region are smallholder farmers, who live along the
coastal ridges which follow the shores of Lake Victoria for about
one hundred km south of the Uganda border, in a belt between 20
and 40 km wide (Smith, 1989). The composition of the labour force
is highly varied, as is the size of individual households. The
heterogeneity present is a factor which should be taken into account
in further development. In short, it is difficult to implement
successful adaptations into their agricultural systems because
of the extent to which the practises differ.
Understanding the producers and their backgrounds is essential if we want to realistically consider how Fair Trade can work from the bottom end of the commodity chain.
According to a population census, the population of the Kagera region was 1.32 million in 1988; according to a more recent estimate (1994), the population was 1.5 million people (Anonymous 1994a, in Jørgensen 1995). The average yearly growth rate in the region is 2.7%, with annual growth rates of 2.4% for both Muleba and Bukoba. (See table 1, below.)
| Bukoba Urban | ||
| Bukoba Rural | ||
| Muleba | ||
| Karagwe | ||
| Ngara | ||
| Biharamulo | ||
According to Diagnostic Survey (1989), there was a population
increase of 29% and 55% from 1978-1988 in Muleba- and Karagwe
districts, respectively; in Bukoba District the increase in the
six rural zones was only 12% during the same period. The large
population growth can be partially explained by an expansion of
the farming system onto lands previously considered marginal (Smith,
1989). This marginalisation process is an interesting effect of
growing populations and the internal migration process evident
in much of Africa. Whether it will affect the quality of coffee
produced in the area is ambiguous, but necessary to be aware of
for future predictions. According to Smith (1989),
the physical limits for an expansion of coffee production was
already reached in the 1960's for the most densely populated parts
of Bukoba district. Another response to the population pressure
is out-migration, which Smith categorises into two groups: a)those
with good education, who either start businesses or work in the
public sector, or b) those who are landless and poor, and migrate
to survive. Out-migration is seen as complementary to the expansion
onto marginal lands, since the most common way for the Bahaya
to accumulate savings, both for purchase and development of arable
land, is to do off-farm labour for a few years. According to Smith's
study in Muleba (1987), 67% of the sons and daughters between
25 and 45 years old had emigrated to urban areas or had found
full time work outside of agriculture; of these 41% were female.
Many of the young people who emigrate move back to the region
when they reach retirement age (50 years), often to their family's
land. The result of out-migration according to Smith (1989) is
that most of the land owners are past their productive peak. Rural-Urban
migration is a typical pattern found in developing countries,
where the young (mainly male) skilled labourers move to urban
areas in search of a better quality of life. Thus the rural areas
in a region are deprived of the main working labour force and
fall into decline. Furthermore, a problem with out-migration is
that often know-how is lost as a result; in It is considered a
problem within the Kagera region, but how it effects the overall
coffee production is difficult to assess apart from that it is
negative. It is though, important to note that out-migration can
have positive effects as well as negative, the most important
probably being that for those who return, this represents a way
of bringing wealth into the area upon return.
Another effect of out-migration is that it has augmented the number
of female-headed houses, in two ways: either men who have divorced
their wives give them permission to stay on the land in order
to grow food and provide subsistence to the children; in other
cases female out-migrants are able to accumulate savings and return
to the area to buy land. In both cases, the female-headed households
have little space on their land to grow coffee; there are also
disincentives to maintaining the existing capacity. One factor
is that they have on the average much smaller plots, another is
that female-headed smallholdings are disfavoured by the customary
division of labour, in which planting and pruning trees traditionally
is done by males. Furthermore, in cases where parents either are
divorced or the husband has died, the woman has a lot of work
with taking care of children, putting a limit on how much time
she has for taking care of the coffee trees. Another important
disincentive to coffee growing in female-headed households is
that in many cases the women do not own the land, but hold it
in trusteeship from the clan (more than half the cases in Smith's
study; in 56% of the female-headed households the woman was divorced).
In some cases the ex-husbands appropriated coffee grown by the
women and sold it.
Another factor which is affecting the demographic structure in
the region is AIDS. According to Jørgensen, the registered
number of AIDS patients (in the whole Kagera region) increased
from 3 in 1983 to 30,000 in 1993, of whom almost all have died.
Most of the people afflicted are in the productive age, often
with families, making AIDS a very large problem in the area (Jørgensen,
1995). According to Elkjær and Rasmussen (1993), 5.8% of
the women and 7.1% of the men in Tanzania were HIV positive in
1991, and that the percentage was rising. Besides putting large
pressure on the health sector budgets, AIDS is changing the age
and family structures of the population in a way which can't fail
to have an effect on their farming system as it's practised.
These relationships show that the both the traditional role of
women in society, and the effects of different factors related
to population pressure and sickness on family structure, have
a good deal of relevance in relation to which people in society
grow coffee, and who might be affected by incentives or disincentives
such as changes in the coffee prices. Demographic problems such
as these are out of the hands of Fair Trade initiatives. We can
not predict the impact of these external factors, only be aware
that they exist.
An understanding of the class structure of the Bahaya,
and how it relates to the distribution of coffee production, is
important for later drawing conclusions about the possible impact
of higher coffee prices on the farmers and the farming system.
In Smith's study from 1987 of a section of Muleba,
the richest 15% of the farmers were the only ones who were consistently
increasing their coffee production. All surveyed (in this group)
had purchased land in addition to their inherited homegardens.
In addition, all owned cattle, had access to manure and used hired
labour to help with coffee cultivation. According to Smith, the
farmers who wish to expand coffee production are restricted by
both land tenure laws and land scarcity; often extra land purchased
is in other areas, thus preventing consolidation of farms and
economies of scale. Therefore, of the seven richest farmers in
the area only two derived the largest share of their income from
coffee. 63% of the coffee was in Smith's study grown by the remaining
86% of the population, who lacked land, traditional and modern
inputs, and technical skills to increase coffee production. The
only under-exploited resource available to poor- and middle status
farmers in his study was their own labour. The women however work
about twice as many hours as the men (Ralds study from 1975 reports
similar figures), meaning that it's mostly male labour power which
could be tapped. Because of the men's traditional role in pruning,
planting and managing the coffee, an increased labour input could
therefore increase coffee productivity on smallholder farms.
The land in the region is divided into tribal, family,
individually owned and public land. Titles to the land in each
of these groups differs according to whether the land is used
for bananas or grassland (bananas being the most valuable, of
course!). The farmers cannot own the soil, but have utility rights
to it. The ownership of the homegarden (or kibanja; see below)
is actually the ownership of the value added to the soil through
cultivation (Nicolaisen et. al 1992). Land use is based on kinship
structures that are patrilinear with regards to ownership and
inheritance (Rugalema et. al 1994); it is however possible now
for females to inherit land use. Traditionally farms have been
inherited between the sons in the family; this practice has been
changing however because of land shortages, and now it is common
for land to be inherited by the oldest son only. The patterns
of inheritance have been leading to a continual fragmentation
over time, which is relevant when considering the problems leading
to the decline of sustainability.
The Bahaya agroforestry system will be discussed
here to look at sustainable methods of production in their culture.
According to Altieri (1995), "Agroforestry optimises the
beneficial effects of interactions between woody species and crops
or animals." This is apparent on the homegarden, where
these elements interact both spatially and temporally in such
a way that is specific for the homegarden as an agroecosystem.
The agroforestry system of the Bahaya has been a relatively stable
agroecosystem and has been sustaining the population for many
decades, but presently it is succumbing to inevitable pressures
related to globalisation indirectly, but more directly because
of factors described above e.g. fragmentation, out migration,
banana infections etc.
The most widespread farming system in the area is
subsistence-based, smallholder coffee-banana farming. It is very
diversified, and high priority is given to food crops. (See Figure
1 below, showing the layout of a Bahaya farm.) Some of the farmers
also have cattle; in these cases the manure provided is an invaluable
addition to improving soil fertility. The Bahaya divide their
land into different functional land-use types, called kibanja,
kikamba rweya, and omusiri. The different terms encompass the
functional use of the land and the social values attached to the
different land-use types, as well as the actual cover of the land
with vegetation.
Figure 1: Layout of a Bahaya holding. (Friedrich,
1968)
The homegarden, or kibanja (plural: bibanja) is a
plot of land cultivated with the perennial crops banana, and often
coffee. It is according to Diagnostic Survey (1989, in Nicolaisen
et. al 1992) the most important of the land-use types, and accounts
for 70-80% of the smallholder's total cultivated land. Bibanja
adjacent to each other form a village, typically with 100-150
households (Jørgensen 1995). A study done in Bukoba in
1991 showed an average size of less than one hectare per household;
according to the authors the homegardens continue to fragment
as a result of population growth (Rugalema et. al 1994). The minimum
size of a kibanja required to support a family of 5-7 people is
0.4 hectares (Rald 1975). The fragmenting of the homegardens,
and it's effect on the productivity and sustainability of the
Bahaya farming system will be discussed later in the paper. Banana
are the most highly regarded food crop in the area, but there
are many others grown. The main cash crop is Robusta coffee, which
is grown in almost all the homegardens. There are over 100 cultivars
of banana grown in the districts, but a typical homegarden contains
a maximum of 20 cultivars, chosen because of their different brewing,
roasting or cooking qualities. Of the four main varieties, Ebitoke
(the common name for cooking bananas) is the dominant group of
sub-species cultivated in the kibanja, and the staple food for
the whole area. Bananas are also extremely important in another
respect, in that banana trash is the most important mulching material
in homegardens. It's importance is even greater for those farmers
who don't have access to manure. In this way bananas are essential
for the overall productivity of the homegarden, including the
coffee. A serious and growing problem in the area is the infection
of banana trees by various insects and diseases. These are partly
responsible for a decline in banana productivity; given the central
role of bananas in the bibanja, this will affect the productivity
of coffee and other crops as well. There are pesticides which
all work against these insects/fungi, however the costs of these
are often prohibitive. In addition to the above mentioned crops
a variety of trees and shrubs are retained on the bibanja, for
a wide variety of uses and functions, e.g., fuelwood, livestock
fodder, wind breaks, timber, fence posts, shade and medicine.
For this reason the trees have been and still are an invaluable
part of the kibanja for the smallholder farmers.
Livestock is also kept, but primarily for manure
because the local breeds of cattle (Zebu and Ankole) yield only
small amounts of meat and milk. Their manure is according to Smith
considered essential to extensive banana and coffee cultivation
on small plots. Cattle keeping farmers take care of the village
herds for two to three days after which a neighbour takes over,
the whole process being supervised by the village chief herdsman.
The grazing is mostly done on communal land. Due to increasing
population and a corresponding lack of land in many areas however,
some farmers are going over to a zero grassing system ( i.e. similar
to stationary pastoral farming as opposed to nomadic). This has
it's drawbacks; among others only few farmers grow fodder on the
kibanja, which forces them to get it from the rweya or to feed
them organic waste material from the kibanja. In the latter case
this will be removing material which otherwise could be used as
mulch for the kibanja . Zero grassing is also labour-intensive,
and adds to the already large work-load which the women have (Jørgensen
195). If the land is not managed to a certain extent, then it
will be taken over by wild species and disrupt the present sustainable
ecological cycle.
On the kibanja both a horizontal and a vertical order
in plant growth is recognisable (see figures 2 and 3 below). Near
the house, which is placed in the middle of the kibanja, the soil
is most fertile because of a high input of compost, when possible
manure. In this area a very dense growth of bananas is found.
The further from the hut the less compost or manure is applied,
and the bananas become thinner. They are intercropped with more
and more coffee trees, maize and beans, until the banana-belt
around the centre is replaced by a belt of banana-coffee cultivation.
This in turn gives way to another belt of either banana-maize-beans
or coffee-beans. Sometimes another plot of pure coffee supplements
the mixed stands. At the edge of the kibanja is a border of trees,
occasionally along with elephant grass which is used for mulch
for the groves.
Because of the heavily fertilised soil closest to the house, the banana trees reach extreme heights; these trees are often twice the height of those grown in the less fertile soil towards the edge of the holding. With increasing distance from the house and the corresponding decrease of both shading from the bananas and supply of mulch, more coffee trees are grown between the bananas. At the same time the ground where possible is covered with beans, so that the three crops are grown above each other corresponding to their light needs. Arrowroot, maize, yams, tobacco and vegetables are grown where possible in small plots, where their light-requirements are met. According to Friedrich (1968), the above mentioned horizontal and vertical orders are recognisable in almost all the kibanja, but the combination of plants may vary from farm to farm depending on such factors as fertility of the soils, domestic needs or land available. Domestic requirements are the most important factor determining which crops are grown, i.e., large families with little land tend to allocate more land to banana cultivation than to coffee.
After establishing a kibanja 3-4 years pass before
there is a yield, and up to 10 years before it is well functioning.
The Bahaya systematically build up the soil fertility by establishing
new banana groves. A new plot of land is chosen from the grassland;
a small area around the new hut is planted with cassava and sweet
potatoes, interplanted with a few bananas. No yield is expected
from the bananas, but mulch from these along with household refuse,
and sometimes manure, slowly improve the soil fertility. This
in turn improves the banana yields. Gradually a new kibanja is
built up, with the above mentioned vertical and horizontal orders
becoming visible including the belts of coffee-banana cultivation.
The expansion of the homegarden stops when it either reaches soil
which has such low fertility that it is not worth including in
the kibanja, or when the kibanja reaches other plots in the neighbourhood.
The reason for expansion is typically that the established smallholder
farm no longer suffices to yield the required quantity of food
for the family.(Friedrich 1968).
The soil is so lacking in nutrients that in order
to achieve reasonable harvests the fertility of the soil must
be built up as described above, or by applying large amounts of
chemical fertilisers. Both Robusta and Arabica are grown on the
bibanja, but by far more Robusta is grown. Arabica is mainly grown
on the higher plateaux, while Robusta dominates the lower ridges
in the north and east of the districts due to the growing requirements
described in the coffee growing chapter. Coffee plants are host
to a number of pests and diseases (see coffee-chapter); the most
serious in the region are coffee leaf rust (CLR) and coffee berry
borer. Chemicals for coffee pests and diseases used to be provided
free of charge by the KCU, but since the liberalisation of the
fertiliser/pesticide market in 1992, the costs of these items
are too high for most smallholder farmers (World Bank Report;
Kagera 'data-sheet' 1995). Although the use of chemicals certainly
must have declined since 1992, the existence of a black market
and therefore (periodically) low prices makes it difficult to
make a quantitative assessment of how much the coffee farmers
in the region are using (Niels Jensen, 1996). According to the
study done by Smith (1987), of the richest 15% of the farmers
in the study area (who controlled 44.6% of the land and harvested
37% of the coffee grown in the village), 57% used chemical fertilisers
and/or insecticides. The village class structure apparently shows
a disparity of wealth within the KCU which will in turn effect
: the quality of production; the ability to buy fertilisers ;
and consequently the potential sustainability.
Cultivation of crops on the kibanja is done in such
a way that ideally the trees and crops are at various stages of
growth. This means that most of the agronomic and other management
practices are carried out throughout the year, although the farming
practices are carried out in relation to season. The bananas are
harvested year-round, but they are desuckered and detrashed before
the rain plots are weeded at the end of August. There is a slight
shortage of bananas in June to September, and a bigger shortage
between February and May; this reflects the fact that husbandry
practices are carried out in such a way that the young banana
suckers ripen during the dry months and bear fruit in the rainy
seasons. Maize and beans are sown at the start of the rainy season,
and harvested in December and January after which the plot is
weeded again. Pruning of coffee is done just before flowering.
(Rugalema et. al 1992).
The kikamba is a plot of land which either previously
was planted with perennial crops and has been left to be reclaimed
by grass or heavy weeds, or land under the conversion to a kibanja,
where perennials such as bananas and coffee can be grown. There
are various reasons why a plot of kibanja can be converted to
kikamba. Labour shortage due to death, migration of a family member,
or prolonged illness can mean that the smallholder fails to maintain
part of the land. Old age or divorce can also be a cause.
Rweya is the name given to open grass or bushland.
This is land between villages, consisting of permanently uncultivated
areas due to steep slope gradients, shallow soil or rock outcrops,
and areas with grass fallow after the cultivation of annual crops.
These small plots of cultivated land, called omusiri, are cultivated
for approximately 2 years out of ten; the rest of the time the
land is left fallow in order to re-establish the soil's fertility
again. Both the fallow land and the permanent grassland are grazed
by the small herds of cattle and goats. Grass is also used from
the rweya as mulch for the kibanja. All in all there is a net
transport of nutrients from the rweya to the kibanja, both because
the grass in the rweya is eaten by cattle, and the manure is deposited
in the kibanja, but also because grass is removed from the rweya
and used as mulch in the kibanja. Furthermore, the annual crops
grown in shifting cultivation on the omusiri remove nutrients
from the rweya as well. According to Nicolaisen (1992), there
is a tendency now towards there being more kibanja land at the
expense of rweya. This means a decrease of fertility on the homegardens,
as they are dependent on the input from the rweya.
Although coffee production is the most important
economic activity in the region seen in terms of national interests,
"......smallholder farmers will not usually jeopardise their
livelihood by replacing food crops with coffee planting beyond
a carefully thought out equilibrium point. They have all experienced
both large fluctuations in coffee prices and exorbitant prices
for food crops during times of scarcity." (Smith 1989).
Smith argues that while the smallholder farmers in the region
are unwilling to invest too much in coffee as a cash crop, at
the same time they are dependent on income from cash crops, and
will therefore never entirely go over to subsistence farming.
The most common alternative to coffee growing today in the region
is to turn to growing more beer bananas. In Smith's study beer
and liquor production accounted for 21% of all reported aggregate
household earnings, and many of the families surveyed were neglecting
the coffee trees and turning to beer banana cultivation.
There are many advantages to beer- banana cultivation
over coffee. Pruning is much less labour-intensive with banana
trees than coffee, and is more widely practised. Banana cuttings
only take a year and a half to mature, whereas coffee seedlings
take five years. Banana cuttings are planted at different times
and therefore yield fruit year-round, while coffee is harvested
once a year in a couple of labour-intensive weeks. Therefore income
from beer and liquor is more or less continuous, coffee income
being once a year. There is also a risk from the crop failure
of bananas as well, which should be acknowledged, so it is not
necessarily a reliant economic alternative. This is an important
factor for farmers, who with the more or less continuous income
are able to buy necessary household items year-round, such as
food, school-books, etc. Banana pests provide a mechanism that
effects declining soil fertilities. Farmers change their crop
layout so that bananas are increasingly replaced by annuals. Because
annuals do not protect as much of the ground the topsoil is more
susceptible to erosion. For women and land-deprived youth, the
banana beer and -liquor business offers a) an steady income, which
is much less capital-intensive than coffee, and b) a culturally
acceptable income. (Banana beer and -liquor has roots in traditional
Bahaya and African culture; also, women traditionally have produced
banana beer and liquor - with the exception of pressing the juice
from the bananas, which has been men's work.) (Smith 1987, 1989).
According to Smith, the government's efforts to increase coffee
production could conceivably work, if an incentives plan is launched
as a motivation to increase labour-input on coffee-cultivation
(the only under-exploited resource available to poor and middle-status
coffee farmers). This would if successful meet the stated goal
of "improving foreign exchange earnings in order to finance
national development", and very likely provide more access
to needed consumer goods and services, thereby improving the quality
of life mainly for poor and middle-status male-headed households.
Smith argues that the interests of landless youth and female-headed
households would be overseen by this sort of incentives strategy,
which only focuses on coffee. (As described above, these groups
are fairly much excluded from controlling participation in coffee
production.)
The sustainability of an agroecosystem is defined
by Altieri (1995) as "The ability to maintain production
through time, in the face of long-term ecological constraints
and socio-economic pressures." The homegarden agroforestry
system of the Bahaya is an example of what has been a very stable
agroecosystem. Their farming methods have been built up around
a wide diversity of crops, livestock and trees interacting in
such a way that has ensured a very high amount of nutrient recycling,
and efficient use of space, soil, water and light. Various properties
of agroecosystems as a comparison between traditional polycultures
and modern monoculture are illustrated below in figure 5, below.
The figure shows that although traditional polycultures are less
productive than monocultures on a per-crop basis, they are more
stable. This stability reflects the diversity inherent in their
farming system.
Figure 5: System properties of agroecosystems and indices of performance.,
modified after Altieri 1995
However the farming system of the Bahaya is now under
such pressures that it's sustainability is indeed declining. Decline
in soil fertility leads to farmers growing more subsistence crops
and less cash crops to cover their immediate food needs. Due to
the lack of money previously made from cash crops it has an impact
on their standard of living .i.e. education will be neglected.
Rapid population growth, which in conventional demographic terms
is seen as a constraint, leading to fragmentation of land-holdings;
young people in their most productive ages migrating to urban
centres; declining soil fertility and productivity; low, and unstable
producer prices for coffee and the outbreak of banana weevils,
nematodes and panama disease are all factors contributing to this
trend.
Accessing the market is no simple matter for the
Bahayan small holders. The link between the individual farmer
and the co-operative union (who market the coffee) is both simple
and complicated. Simple, in the sense that he has the knowledge
of where to deposit his coffee for sale, yet complicated, because
when weighing the access to the market thereon, it becomes unclear
whether it is actually a financially sound choice. Some members
of the KCU, have already left the co-operative union in search
of other ways to access the market. The present system of access
to the market through the KCU could actually be the reason for
this. To examine this we have to look at the access to market
from two angles: access to market through the Co-operative Union
and; access to market through Fair Trade initiatives. Both represent
a range of problems, which we will present here and discuss further
on in the project.
The Bahayan farmer has different needs in order to
provide for himself and his family. As described earlier, the
farmer produces a great variety of crops. Some of these crops
are part of a subsistence production and some of them are destined
for export e.g. the sale of coffee in return for cash. Since the
colonial days the farmer has had a need for cash, thus giving
him an incentive to grow cash crops, work in the city or as hired
help on larger estates. In the colonial days the colonial government
imposed a hut tax on the farmers and today the farmer has a need
for cash to be able to pay for school fees for his children, members'
fee for the co-operative union etc.. Different options are given
to the farmer in order to sell his cash-crop, in our case coffee.
The farmer can sell through the co-operative or private traders
(which for the most part is foreign trading companies) and also
the informal economy which includes the black market. A co-operative
forms an umbrella organisation to control and regulate terms of
production, marketing and distribution for the small holder farmer.
Consequently it is the essential link between the fair trade organisation
and the product supply.
Most of the coffee production in the Kagera region is based on small-holder producers without the capacity of marketing their product themselves. The co-operative structure provides the small-holders with transportation, farming inputs and last but not least, a way of marketing of their coffee. A co-operative is defined as follows:
Formal co-operatives were first introduced into Sub-Saharan Africa (SSA) by colonial governments, often for the purpose of promoting the production of cash crops by peasant farmers. After independence, many SSA governments adopted policies that further accentuated the role of co-operative and other rural organisations in the agricultural sector. They became important channels for government sponsored credit input supply and marketing programmes, and often had to operate under close guidance and control by the state. This is evident in the case of Tanzania.
Great emphasis is now put on the need for policy
reforms to facilitate the development of sustainable rural organisations.
Until very recently the co-operatives in Tanzania, as in most
SSA countries, have been perceived as being within the public
sector domain and subject to close control by government authorities
but the implementation of the liberal economic policies supported
by the World Bank has created a need of helping the co-operatives
to evolve into effective and sustainable organisations managed
by their members and capable of providing competitive services.
If co-operatives are to contribute to human resource
and competence development, this will require the voluntary involvement
and commitment of the co-operative members, i.e. that co-operatives
have a social role. If co-operatives are exclusively seen by an
outside promoting agency like the state as a suitable technical
arrangement for the organisations and marketing of agricultural
produce and the interest of the members is neglected in such a
process i.e. the social role, the participation and commitment
of co-operative members disappears and little, if any human resource
and competence development can be achieved through co-operatives.
The economic performance of co-operatives (as well as character)
will, in the long run, be negatively affected by the absence of
a social role.
The Tanzanian government decided to re-establish
co-operatives and introduce the Co-operative Act in 1982, based
on recommendations from the Commission of Inquiry. The new co-operative
frameworks were based on the Rochdale concepts and also a socialist
approach. It was given a three tier system : Primary co-operative
societies; Secondary societies i.e. co-operative unions; and the
Apex organisation, Co-operative Union of Tanzania (CUT). Note
diagram below showing the theoretical relationships between state
and enterprise.
The Co-operative Act implied the state would remain
a major actor in development in Tanzania. The Registrar was also
given a powerful position. The CCM has controlled the co-operatives
in Tanzania, from a village level up to a national level, with
the CUT as an affiliated mass organisation. The CUT has now been
transformed into UCS.
By the end of the 1980s all parts of co-operative structure seemed to suffer from an internal weakness and lack of support. The agricultural marketing system proved to be inefficient and to "have eaten the farmers income"(Bagachwa, 1995). Co-operative Unions thought that the co-operative marketing boards were late in supplying inputs and paying for crops delivered; they made unjustified deductions for services rendered or inputs which had not been delivered, and they delivered seasonal inputs which had not been ordered. Realisation of failed policies spurned a new ideology that co-operatives should be less dependent on Government regulations and concentrate on their own internal economic sustainability. Increasingly after 1991, the Government has been forced to reduce its powerful hold on the management of the co-operative.
The Kagera Co-operative Union (KCU) is the actual subject of this study, but being a co-operative it represents much more than just an organisational structure of such an institution. In general a co-operative reflects the social and economic relations between different interest groups in the community. Moreover it represents the farmers relation the market economy as well as the relations between state and local community. A co-operative is also a dimension of its own with its own organisation, traditions, culture and market.
Within a co-operative structure there can be different
levels. In general terms there are primary and secondary co-operative
societies. The primary society is the local level society which
the farmers join, and the secondary society is constituted by
a number of primary societies.
Figure 1 The internal dynamics of the co-operative enterprise
The internal dynamics of the co-operative enterprise can be summed up in Figure 1, above. It indicates the relations of interdependence within and outside the co-operative. The lines indicate the influences between the areas. The triangle unites values, organisation and economy represents the level at which co-operative principles, norms of conduct, plans of growth etc. are formulated.
The International co-operative movement (ICA) defines
six main guidelines for its member organisations:
(Modified after ICA 1967 quoted in Carlsson 1992)
The general idea of a co-operative agreement is consequently of equality and fair interactions/relationships between members. Influence and power comes through interaction e.g. dialogue, discussion, persuasion, manipulation, election.
"There can be no co-operation without co-operators." (Desroches,1976)
They are person centred enterprises, as opposed to investment capital centred enterprises. Co-operative education and human development are part of the business of the organisation. Much importance has been stressed in the development of a successful co-operative in having a worthwhile education scheme for all members. The ICA also stresses that membership should be free, and not obligatory. A co-operative can be viewed as an association of people that use co-operative capital to carry out their economic activity, not as an investment in search of rentability for the sake of capital profit.
These enterprises have a democratic structure. Below
is a simple outline:
( Hussi, 1993)
One can say that the structure sets the stage and may also determine who the interacting partners are, but without analysing the actual business culture, this will not be very informative in the educational outcome. The lack of structure in many African and indeed Tanzanian co-operatives, was derived from the Colonialists days when the natives where set apart from the ruling power. It is therefore a key aspect that should be dealt with in present development policies, preferably internally.
Economically speaking, we are dealing with enterprises that have to compete in a market like any others. Looking at the co-operative from this angle, a conventional description of enterprise stresses the organisational, economic and technological aspects as the areas which have to be integrated into the internal dynamics of accumulation of experience and knowledge - as visualised in the diamond above in figure 1.
The above mentioned principles of the ICA which represent
the foundation of all co-operative movements is also visible in
the Kagera co-operative union as it exists today.
After the Independence the co-operatives became a
Government control scheme with the declared goal among other things
to make social services widely available for the villagers initially
through the Ujamaa programme. But the co-operative structure was
also made an instrument of the state's political control over
the agricultural sector and the co-operatives were stripped of
their legal autonomous status. Since 1982 the government has moved
away from their policy of making co-operatives part of the public
sector and decided to restore the co-operative structure as it
looked before the abolition in 1976. Between 1976 and 1991 the
co-operatives have had close structural relations to government
control. In Tanzania today this structure still exists but now
co-operatives can be registered outside this structure thus functioning
more in the line of autonomous units. Our case-study the KCU which
is still part of the old structure is a union of co-operatives,
also called Rural Primary Co-operative Societies RPCS. These societies
consists of the single farmers. All co-operative unions and primary
societies need to be registered at the state register of co-operatives,
the Registrar appointed by the president.
In 1955 the predecessor of the KCU, BNCU - Bukoba Native Co-operative Union was founded and in 1984 the KCU was formed (Max Havelaar 1996) .The KCU is an enterprise representing a large amount of co-operatives (in Tanzanian terms primary societies) as opposed to just one. By 1991 the KCU consisted of 137 primary societies but since the Co-operative Act of 1991 after which the primary societies had to be economically viable the total number has gone down to 85 registered and 10 societies on probation (Max Havelaar 1996 KCU data). This entails a potential sum of 200.000 farmers. The farmer can join the union by buying 5 shares in the co-operative. The primary societies are represented in the KCU with 3 representatives at the General Meeting. The members present at the General Meeting evaluates the past season, discuss plans and budgets for next year's season and elects an Executive Committee of 11 members. (Max Havelaar 1996) The main functions of the KCU (1990) are:
(Max Havelaar 1996)
Primary societies represent a functional part of the KCU but they are transforming into more or less independent co-operatives as they still need capital, means of transportation, access to market etc. We believe that there are now private co-operatives (as opposed to public) outside the co-operative unions, therefore increasing competition for the market share. Whether private or public, the co-operative union empowers the smallholder with more opportunities for the ability to deal in the global market (as opposed to being an individual entity). Hence outside trading organisations are guaranteed a more reliable source of trading partners.
Transportation is of vital importance for the farmer to make his product physically available for further processing and exporting. This requires physical infrastructure in terms of roads, railways and freight ship routes (across Lake Victoria).
The transport of the dry coffee berries from the place of production to the primary societies is the small holders own responsibility. It is only the larger producers that can afford to hire motorised means of transportation, the small-holders have to use more simple means, i.e. carry the coffee or transport it on bicycles, wheelbarrows etc. (Nicolaisen et al 1992) The KCU last year (1994-95) produced about 16,205 tonnes of dry berries, the average farmer produces about 200 kg. of dry berries (Max Havelaar 1996:KCU data sheet), which needed transportation from the farmers to the primary societies. The dry coffee berries are transported to the BUKOP processing plant in Bukoba town on trucks owned by the KCU. After hulling and curing of the dry berries, the green coffee is bagged and transported across Lake Victoria to Mwanza and from there by rail to the port of Tanga from where the coffee is shipped. Also coffee from TANICA (Tanganyika Instant Coffee Company Ltd.) processing facility is transported by this route, from farmer to the port in Tanga. TANICA receives green coffee from BUKOP which is made into instant coffee. It should be mentioned that both are located in Bukoba.
Besides need of transportation for the coffee there is also a need for transportation of farming inputs which is for the most part imported to the harbour towns and from there on transported to the region.Transportation costs are fairly large as the KCU is situated in a remote part of Tanzania in relation to the shipping ports. Besides that the general transportation infrastructure in Tanzania is poor and this causes delay, loss of quality and income (Max Havelaar 1996: KCU data sheet). The Kagera region is not connected to the national railroad. This means that the region is largely dependent on main- and by roads. Most of the roads are in a bad condition and are not paved. The areas with the best road structure are situated in the coffee-growing areas. This tendency appeared first in the colonial days, when the Colonial Government expanded the infrastructure to the constructed roads to be able to transport the cash crops from the growing areas to the shipping harbours. It should be added, however, that the roads have been neglected over the recent decades.
The export office in Moshi also offers numerative
advantages. The export office have made it an easier task for
the coffee to get from Bukoba to the port in Tanga, and also the
transfer of money from Moshi to Bukoba has become a fairly quick
and easy task. This way the export office in Moshi has contributed
to the solving of some of the difficulties concerning the transportation
from Bukoba to Tanga (see figure 2 for the
internale structure within Tanzania).
Figure 2. This figure which we created shows the flow of coffe
through channels from small holder to market.
The National Bank of Commerce (NCB) and the co-operative rural development Banks (CRDB) provide short term and medium term credit to the marketing and processing and allied services. The actual use of credit was impossible to control by the authorities. The banks are state owned and therefore the financial relations are necessarily based on both economic and political considerations. By June 30th 1990, the co-operative unions had a debt to the NCB of an estimated 22 billion Tanzanian shillings. Adding to a debt of 6 billion Tanzanian shillings owed by the co-operative unions to the CRDB. The total debt was amounted to 54 Billion Tsh, from the unions and the marketing boards.
Dependence of the co-operatives on the state is being reduced. Growing consensus is that co-operatives should have a more autonomous position in relation to the party and government. The supremacy of politics and political ideology in economics matters, quite possibly a characteristic of a Transition state, has negatively affected the character and performance of co-operatives in Tanzania.
"Now, farmers are allowed to sell their crop to other buyers, the co-operative no longer has the monopoly. So more buyers entered the area and also more exporters are operating on the auction in Moshi where all coffee has to be offered" (Max Havelaar 1996: KCU data sheet in appendix ).
Amongst these other buyers are the Fair Trade Organisations with Fair Trade initiatives. In accordance to these Fair Trade initiatives the First World importer has to facilitate 60% of the coffee price before hand, in the form of a loan to the producers, on demand by the producers. There can be no doubt that the importers of the First World meet their end of the Fair Trade bargain, however, the mentioned facilitation of the 60% does not really create an opportunity to avoid further debt. Given the fact that only a minute amount of the coffee is sold under Fair Trade conditions, the 60% facilitated does not have the intended effect here and now.
The KCU sell about 4 per cent of their coffee under Fair Trade conditions(U-landsimporten, June 1995) . This means that they get, through Fair Trade facilitation, a loan on their coffee amounting to 2.4 per cent of their entire production. This money is used to buy the coffee up from the actual small holders (often facilitated by a certain amount of the payment in advance), and they still have to loan the rest from other sources. Moreover the loans, whether from ATO's or other sources, are still sensitive to currency fluctuations influencing interest rates, (although on different levels), between the Tsh and the US dollar. Also the price fluctuations above Fair Trade minimum price has an effect similar to that existing under regular conditions.
As according to ICA principles surplus or deficit
is distributed to members in proportion to the members economic
activity in the enterprise, and not according to the amount of
each members invested capital. For workers co-operatives, this
implies association members receive payment for their work as
part of the distribution of results of their enterprises. They
do not receive a fixed wage per unit of work or time and there
is a sharing of profit. This seems to be a rather dubious matter
concerning the KCU at present.
Not only does the co-operative structure and its relations to the market and the Tanzanian government entail complications, also the Fair Trade system in itself presents a range of problems. All coffee traded (including Fair Trade) will pass through the Tanzanian Coffee Marketing Board (TCMB) to be sold at the auction of Moshi. Through Moshi the export crop enters the global market. This happens for co-operatives as well as private traders. The co-operative unions have formed an Apex organisation which is supposed to take over marketing role from TCMB as part of the process of making the co-operatives free of the state's control. This is a result of the increased privatisation process in Tanzania, which has been a move away from the former socialist based government control.
The KCU has a representative (John Kanjagaile) present at the market at Moshi who not only is involved in the selling of coffee from the KCU, but he also buys back a small percent of the coffee back from KCU to sell as Fair Trade coffee. This means that the KCU, not only is registered as a seller, but also as a buyer. Their representative in Moshi buys coffee, a certain quantity and quality, to be sold on to Fair Trade organisations, in this case Hamburg Coffee Company, this way he also functions as an exporter and an agent on behalf of Fair Trade organisations e.g. U-landsimporten. The representative can make a bid on the coffee that is higher than regular bids as a result of the higher Fair Trade price. This way the price can become slightly increased as a result of the pressure upward by the KCU representative.
The coffee traded by the representative is thereafter
sent to the port of Tanga where Hamburg Coffee Company takes care
of the export/import. After the coffee arrives at Hamburg (Germany)
it is freighted further on to Fair Trade retailers throughout
Europe one of which is U-landsimporten in Denmark. This way the
representative at the market in Moshi becomes an agent indirectly
for U-landsimporten in Denmark.
At present, the Fair Trade system of importers, exporters and retailers is small compared to that of the global trading system of coffee trade. This often entails that the Fair Trade organisations have to conduct business through regular traders involved with speculation in futures and thereby hedging any adverse price movements. This in turn can cause a paradox within Fair Trade. The following example is a fictive example presented at the Third General Producers Assembly in Copenhagen in 1995:
The result will eventually be that the roaster/retailer
and consequently the consumer, will be paying for any losses as
a result of price fluctuations. This makes the Fair Trade product
highly unappealing to the importer, since he will be paying, not
only an additional premium to the producer, in order to put the
Fair Trade Mark on his products, but on top of that the importer
has to pay additionally for costs as a result of fluctuating prices.
At the Producer Assembly meeting four possible solutions were
suggested:
In our case, where the trade is done through Hamburg Coffee Company, it seem that solution two has been taken. Hamburg Coffee Company has indeed a pre-established time schedule for price fixing. It should be noted, however, that professional traders, like Hamburg Coffee Company, will automatically choose a solution best suited for their specific way of trade, and to avoid any losses.
How do Hamburg Coffee Company actually go about hedging the price differences between the price fixed by the producer and the price fixed by the importer? When the representative at the market in Moshi has fixed the price for KCU he calls Hamburg Coffee Company. Hamburg Coffee Company then pass on the information to their broker on the exchange market who will do the actual selling (what the Hamburg Coffee Company pays for the coffee is what they get at the exchange market). When the importer then decides to fix the price at which he wishes to pay, he likewise calls Hamburg Coffee Company and they then call their broker and buy the coffee back at the exchange market (they buy it at the price payed by the importer). Consequently they sell when they buy and buy when they sell leaving it up to middlemen to lose or win a profit, but ensuring that the producer is able to get the price at which they fixed it and at same time also ensuring that the importer get the coffee at the price fixed for purchase. It is important to realise, however, that the trade in which Hamburg Coffee Company is involved entails two procedures. The buying and selling of coffee and the buying and selling at the New York 'C' market. The following example was put to us by Kirsten Reil, Hamburg Coffee Company:
"we have bought coffee at plus 5,00 and the
producer is fixing at 110,00, i.e. he gets a final price of 115,00
/ we are selling at N.Y. 'C' at 110,00. We sell the coffee at
plus 7,00 and our cusiomer is fixing at 105,00, i.e. he has to
pay a final price of 112,00, at the same time we are buying the
same amount back at N.Y. 'C' at 105,00"
. This means that the table of figures
looks as following:
Coffee N.Y. 'C'
Final price/Producer
purchase 110,00 + 5,00 = 115,00 105,00
Final price/Customer
sale 105,00 + 7,00 = 112,00 110,00
---------------------------- ---------
Loss = 3,00 Profit = 5,00
This means that the final figure from the coffee
trade (Fair Trade) is that Hamburg Coffee Company has made a profit
of 2 US cents per lb. The figures here presented, however, are
imaginative, but is a good presentation of the system.
The state's control of the co-operatives is declining and the role has diminished from being totalitarian regarding the co-operative to one of marketing only. The state still controls the exporting, because the coffee still needs to be sold at the auction in Moshi through the TCMB. The set up of KCU's own export office in Moshi
As a part of the liberalisation of the agricultural
sector the coffee market was liberalised in 1995. This forms a
serious threat to the still restructuring marketing functions
of the co-operative unions. The co-operatives are being transformed
into effective private sector enterprises but their freedom to
operate without undue restrictions on their management and business
activities still needs further ensuring and something needs to
be done to prevent a marginalising of the poor farmers and small
co-operatives without the capital to adjust to the new situation.
Farmers outside the co-operative will not have a very good bargaining
position put in front of the private traders, but then again the
added competition from the private traders might have a positive
effect on the restructuring process of the co-operatives. In practice
farmers are often not paid by the KCU because of the KCU's financial
situation and this must be a very demoralising factor for the
farmers. It is hoped by Max Havelaar (KCU data sheet 1996) that
today by recycling the money much quicker during a season (starting
the season in May instead of July, continuing the auctions in
August and September) and paying the final payment later, less
money would be needed. Therefore less debt will be incurred in
a Fair Trade system. Facilitating the farmers with access to credit,
as stated in the Fair Trade paper, would make this possible.
The lack of structure in many African and indeed Tanzanian co-operatives, was derived from the Colonialists days when the natives where set apart from the ruling power. It is therefore a key aspect that should be dealt with in present development policies, preferably internally. The size of the KCU forms a real problem concerning the Max Havelaar demand about administrative transparency. This is recognised by Nina Schøitz from Max Havelaar Denmark but according to her the Fair Trade paper is not to be taken literally and as long as the co-operatives are willing to strive towards the goals, it is acceptable (Interview 2). We still think that it represents a problem because of the stories of corruption in the management of the KCU (Interview 1).
If the KCU was not such a large structure, it would
be easier for the Fair Trade organisations involved to ensure
that the demands put on the producer for production, and so on,
are fulfilled. On the other hand the KCU is a well established
organisation that has the means of transportation and processing,
and is the means of empowerment for farmers in the primary societies.
The KCU would have to evolve into an organisation led by the farmers,
without the bureaucratic structure it has today, to become a more
successful entity with which Max Havelaar and other ATOs could
work.
Sustainability concerns the interplay between the social, economic and environmental systems. Sustainable Development is a means to an end, as it is a continual process. A systems approach, we believe, is the key to the integration of the necessary analyses of the complex social, economic and environmental systems implicated in any significant development. It involves looking at the various systems with which we are concerned; examining them for their attributes; focusing on the pattern of interactions and exchanges between them; developing a scenario of their behaviour and improving our understanding and our ability to predict their outcomes. Moreover, this final part of our project sets forth to summarise, and to put into context all of the discussion points that have been derived from our analytical study. In this section, we have evaluated the ratio of costs / problems of the project, - Max Havelaar sustainable development plans implemented within the KCU through Fair Trade, to the expected benefits expressed in monetary, social and environmental terms. The costs include; social, material, labour and associated costs of construction. The benefits could include - The increased productivity expected from the imposed sustainable development. More difficult to define, but of equal importance are enhanced environments that are more useful for human purposes than the original environment and increased opportunities in a social sense.
We intend to qualify, not quantify the relationships between the given factors in the chain. We have assessed present situations and outcomes mainly concerning processes that can not be converted into monetary values, yet to us these may be the most important considerations, even though they are complex to determine. The first part of our discussion process tends to emphasise the short term considerations because these are the most easily assessed, where as the long term considerations may be the most important. We have looked at this system from both external and internal perspectives, acknowledging that there are many factors that can not be dealt with by Max Havelaar in the system, for example Government restriction etc.
At global levels flows in the system become internal
and can be aggregated, (in our model they are more simple). At
a national level it is much more complex. Measuring in terms of
sustainability is complex and elusive to define. International
trade means inputs and outputs flow between different political
and economic systems (the idea connected to commodification)
and operations, so some effects are displaced geographically or
temporally or both. Humans depend on the production of economic
processes, such as a agriculture and industry that convert environmental
inputs into economic outputs. There are various factors that limit
the extent of conversions, which we will outline.
Besides highlighting the objectives, goals, demands and criteria of the two organisations, it has throughout the project become important to emphasise the differences between the two organisations. We find it important to weigh the interests of the two organisations, and one reason for this is that we found, through the interviews conducted, that the two organisations have somewhat different approaches, which could be seen as a consequence of their different functions. These entities function as powerful controlling mechanisms in the given Fair Trade commodity chain, hence the variations in their ideologies of 'sustainable development' can cause limitations and barriers for the producer. U-Landsimporten is a business that has a slightly contrasting function (as it is a business) to Max Havelaar which is a facilitator and advocator of Fair Trade, but does not actually ever purchase or sell any products. The idea of Fair Trade is not to compete with the commercial business. Instead it is to get the commercial business to adopt the Fair Trade principles into their existing trading policies. The commercial business is mainly interested purely because there is a market for Fair Trade. They do not want to lose market shares and they will still try to make as many profits as possible. Consequently if organisations like U-Landsimporten (an ATO) goes out of business, then the effect will be that commercial business (more materialistic in ideals and transparent to consumer domination), will take over the market share entirely unless Max Havelaar have the power to enforce controls on all levels from the producer to TNCs. We are attempting to investigate the feasibility and impact of Max Havelaar's sustainable development ideals in Kagera as a post environmentalist concept ( or neo-idealist) - the bottom up approach. Problems can inevitably occur at all levels in the commodity chain, from the producer level up to the demands created by the importer.
The bottom up approach - Fair Trade by Max Havelaar.
This first section is considered a summary of the current barriers or limitations that have been posed since Max Havelaar started to facilitate the importation of coffee from the KCU. We are describing these points of discussion starting with the smallholders and progressing up to the consumer. It must be noted that many of these points are very much linked and it has been difficult to separate areas in some cases, but this is a system, hence everything is connected in one way or another. Below is a brief summary of the situation of the main aspects of the system we have analysed as it is today, to our knowledge.
For generations the Bahaya have cultivated coffee, intercropped with bananas as part of an environmentally sound agroforestry system characterised by a large plant diversity, relatively closed nutrient and energy cycles, and low external inputs. This is a positive aspect with which Max Havelaar can work. However, the sustainability of the agroecosystem is declining due to such factors as rapid population growth, fragmentation of landholdings, out migration, declining soil fertility and productivity, low and unstable coffee prices, and the appearance of various banana pests and diseases.
The KCU empowers the small-holder farmers with more opportunities to deal in the Global Market , as opposed to them being an individual entity. Which ensures a more reliable business partner for Max Havelaar. The KCU gives access to world market through their own export office. However, structure is causing problems to the importer and Max Havelaar as it is large and very bureaucratic in its' administration.
Only 4% of their coffee is currently sold as a Fair Trade product. It is however difficult to make an accurate assessment of this figure due to the nature of the available information. Also it is a controversial issue presented to us as to what extent Fair Trade has had on the region as it is such a small percentage that is sold to U-Landsimporten. This is not foreseen as a delimiting factor by Max Havelaar. The intention is that by starting the process, accumulation of knowledge will occur and a trickle down effect will be seen.
Trading with U-landsimporten has enabled the KCU to establish their own export office that will at some point result in their independence of the state's control via TCMB, of the exporting process (as well as the other process occurring at the moment e.g. liberalisation). Besides that it provides the co-operative union with a direct link to the auction and consequently valuable information about World Market prices etc. Lastly, consumer interest in Fair Trade coffee in Denmark has grown considerably since it was introduced in spring 1995.
It seems that this trend in purchasing Max Havelaar
coffee is likely to increase even further in the future.
We have identified several barriers in this human activity system, which we at present see as limitations or inhibitors to sustainable development, as it is reflected in the Max Havelaar demands and objectives. Some of the following discussion points are not necessarily barriers as such, but they may have a knock on effect within the system. By identifying and describing the objects and events in the system and the connections between them we can see that change in one element induces changes in another. Therefore, it is difficult to separate the limits of a particular problems' (impacts and barriers) effects as trickle down effects occur throughout the system. The following discussion points are consequently all linked in some respect or another.
Exponential population growth is foreseen as an immediate
problem to implementing a sustainable development. There are many
problems that, directly and indirectly, are due to the increasing
population pressure and corresponding fragmentation of the land,
leading to questions of how an increase in coffee prices would
affect these developments. Carrying capacity of the region is
extremely important in an assessment of Fair Trade. On the one
hand, the carrying capacity probably has been reached - in the
context of the ability if the Bahayans system to sustain the population.
On the other, technology can raise the carrying capacity but it
should be in conjunction with the ideals of Max Havelaars objectives
of sustainability. These factors are intimately connected with
the declining soil fertility on the homegardens (Kibanjas)and
the decreasing capacity of the homegarden system to sustain the
population. We consider the changes in the demographic structure
as a barrier to the positive development of Fair Trade.
Better producers prices derived from Fair Trade could help improve the soil fertility, as more producers would be able to afford cattle, which would produce manure for the bibanja, which in turn improves all round productivity, including for coffee. This is more complicated than it looks however, because the land necessary for cattle grazing - the rweya- is shrinking in the heavily populated areas because of the expansion of the bibanja. One of the reasons for the out migration is to accumulate savings, both for purchase and development of arable land. Higher prices for coffee could be an incentive for some young people to stay on the land, improving productivity and possibility giving the opportunity to acquire savings for needed investments e.g. for starting their own Kibanjas. The producers traditions of interpreting reality is different to that of Max Havelaars'. For example they are against the use of pesticides , but not fertilisers (according to Rolf Belling) in their production methods. This is rather contradictory and could be foreseen as a small barrier that could be overcome given successful education of more environmentally sound practices. This is especially so that the extra money derived from Fair Trading will be spent more wisely, by being taught about how fertilisers and pesticides are contrary to their interests (by disrupting the natural flora and fauna they become more dependent upon chemicals). They would possibly be inclined to buy chemical fertilisers or such like with the extra money made form Fair Trade profits. This is assuming that the KCU adopts an attitude that incorporates more of the organic growing aspects of the Fair Trade ideas and reflects less of the governments macro-economic interests in the future.
A speculative point of discussion that we have noticed is that the quality of coffee is decreasing due to reducing fertility, also because of disincentives for coffee production. Max Havelaar expect the Fair Trade coffee production to be focused on quality improvements, not quantity, so pruning techniques and mulching methods should not be neglected (as they are beginning to at present) which will effect the transport of nutrients etc. In the long run it is in the social and economic interests of the producers to prevent any more decline in environmental degradation. There is a partially untapped labour force - that of the poor and middle status males - which they could conceivably direct towards increasing coffee quality in the small-holder farms, if the incentives for that exist. A better quality of coffee is produced if more care is taken in the cultivation. "Quality improvement not coffee production needs to be enforced in sustainable development" (Jos Harmsen). If the producer works towards more quantity of coffee rather than a better quality, then the diversity in the agro-ecosystem could decrease. Max Havelaar desires good quality products for the consumers. There are cultural barriers to the males investing more time in coffee i.e. tree maintenance.
Another important factor is how much faith the farmers have in the Fair Trade market in the long term perspective and at present. At present they would probably be sceptical to make investments in coffee crops at the cost of their other subsistence crops or other cash earning activities i.e. the production of banana beer. This situation could be redressed mainly in relation to consumer demand as the concept of Fair Trade is made more aware in the developed world . As we have described the farmers are reluctant to grow cash crops beyond a carefully thought out equilibrium point between cash crops and subsistence crops. This is evident in their cultural lifestyles (encompassing economy and social aspects). As Smith points out, the producers are keenly aware of how coffee prices fluctuate. Therefore we believe it is likely that trust in the Fair Trade market would have to be built up slowly. The extra money from Fair Trade (although a new type of incentive), would probably not address the needs of the landless youth or the female headed house holds. It might be enough incentive to keep the producers from replacing the existing coffee trees with bananas grown for beer and liquor production, but this is a complicated matter. As an added consideration we want to point out that due to the village class structure a lot of poor people that do not own land, are not benefiting from the positive impacts of Fair Trade within the communities.
Certification of the organic coffee produced could
be a barrier. At present, the coffee produced is not certified
by IFOAM, but if Max Havelaar want to achieve their objectives,
then this will have to be done. The certification can also be
seen as an incentive because of the extra money that can be gained
from organic coffee products and also it is easy for the Bahayans
to fulfil the IFOAM demands as they use organic cultivation methods
already to a great extent. Another group of problems arises from
the requirements regarding certification. These entail yearly
(unannounced) field visits, where growing techniques and bookkeeping
are controlled. An internal control system is also required in
the case of co-operatives; this is also checked at random. The
main barrier here is the cost; both of the certification, as it
is very expensive for the co-operatives to pay for having certifiers
come every year, and also for the establishment of the internal
control system. This entails allocating funds in the KCU budget
from other services. One area which conceivably could give problems
is IFOAMS insistence on the use of scientific methods for calculating
mineral balances and pH, for instance one of the guidelines states
that, "Soil activity is optimised by correcting the pH",
and "Return of nutrients is calculated with a mineral balance
which must be drawn once a year." This puts demands on the
producers in the form of technique (i.e., the soil measurements)
and methods, as the producers are required calculate mineral balances
in the soil. These requirements alone would entail teaching the
farmers new techniques and methods, which would probably be done
as a service of the KCU working with the primary societies. Needless
to say, this would in the beginning require allocating scarce
funds away from existing services - although extra profits from
the organically grown coffee would in time cover the costs.
The KCU, being such a large organisation with a big difference between the grassroots and the elite level entails that it does not have 'administrative transparency'. In that sense big unions are not ideal business partners for Max Havelaar. On the other hand big unions strengthen the position of the individual farmer in the sense that a large organisation has a better bargaining position in selling and buying of the coffee.
The size and the extensive infrastructure of KCU also consists a problem in terms of the democracy or rather, the lack of. There is a very large gap between the educated executive of the co-operative and the Bahayan farmer. With 35.000 members it is limited how much direct influence each farmer have on decisions also there are strong relations between the KCU and the State. This means that the KCU is more influenced by the State than the individual farmers. In theory the KCU is supposed to represent the opinions of the farmers, but in reality the KCU compile their policies from the directives made by the state and the smallholders ideals are not interpreted to the extent that they deserve.
The transformation from a government controlled to
member controlled organisation equals a lot of confusion, rumours
and little confidence in the Union. Max Havelaar acknowledge this
critical factor considering their involvement as an ATO. Education
is the key to resolving this situation and co-operation from internal
and external agents. This is a long and complex process however.
From talking to Jos Harmsen and Niels Jensen we can
assume that the following structural problems are a large problem.
Farmers feel very close to their society as it is the only organisation
in the village (primary society). The KCU is not defending the
necessities of farmers strongly enough. The KCU is still following
the policies of the Government closely. Primary societies are
not involved enough in the decision making, which determines their
livelihood in short. They are used as a means to collect coffee,
therefore the KCU should work on strengthening the societies e.g.
by giving them opportunities to capitalise, hence transforming
into a service organisation for the primary societies. The states'
influence on the KCU's policies is still a concern when dealing
with the implementation of Max Havelaar's development plans.
Growing more coffee being one. KCUs policies do not always reflect
farmers needs. The macro-economic considerations come first it
seems. The farmers have the opportunity to get elected into the
main body of the organisation, but they often do not have the
insight and the education to understand, what is going on at executive
level. Furthermore from the looks of it, the primary societies
are not involved enough in planning and making budgets for the
season. This forms a serious problem as the management of the
KCU and the farmers have very different views on agricultural
production, although we think it may be diminishing. The management
has a modernistic conception of agriculture, based on Western
theories whereas the Bahayan small-scale coffee farmer represents
a traditional standpoint, which is built on indigenous knowledge
passed on through generations. The State has for many years provided
the co-operative unions and primary societies with training of
co-operative executive managers and administrative personnel on
the government co-operative college in Moshi (Sam Maghimbi, 1990).
Transition to sustainability needs capital i.e. financing investments from profits made through Fair Trade. Borrowing is not an option for the KCU as it is already in large debt to the World Bank etc. Hence, long term solutions are inevitable for the reconstruction and development of economically efficient transport systems etc. One of the main problems is that the state need the extra money (n.b. they do not receive it at present)more than the farmers because of the debt situation that has built up over many years, and farmers can rely on subsistence crops instead if necessary. This is purely based on our assumptions here from the material we relied on, but it is difficult to judge the needs or weigh them against each other in reality. How the bonuses (derived from the extra profits made from Fair Trade products) are used is a co-operative issue, not for the individual smallholder. This effects the self determinism that Max Havelaar aim to respect in development plans. Co-operative decisions, at present (as mentioned before) do not represent or benefit the producers needs in such a case.
The rising competition from the TNCs in the form of private traders puts the co-operative unions in a vulnerable position. They do not have the structural capacity to compete with the TNCs in terms of marketing etc. as the co-operative unions are very much linked to the State still.
The TNCs control all links of the coffee commodity
chain a part from the production level. Their stronghold on the
coffee market is a problem.
Different cultures have different perspectives and
in this chain we are dealing with a vast contrast in cultures
from the developed to the developing world, also the differing
in perspectives of parties in each area. We can see that this
will cause many of the problems/ barriers that we have so far
discussed. The figure (figure 1) below highlights the many stages
that occur between the production stage of the coffee and consumption
in Denmark.
Figure 1: Is a figure presenting the access to market for the
smallholder. Also it can be interpreted as a commodity chain when
looking at it in a economic perspective.
We have created this diagram to illustrate the main
agents involved in the complex system we have described in our
project. It clearly shows the links between all agents in the
Fair Trade system as compared to other typical systems. There
are so many different ways to get the coffee from the producer
to the consumer that it is not in our capacity to create an exact
representation of all the alternatives (perhaps this is true of
all models !). We have chosen the three main versions in simplified
forms to emphasise the fact that barriers can occur at all levels
and as one element is linked to another, the whole commodity chain
is effected. Conflicting ideas about approaching rationality
between the small holder and Max Havelaar and KCU occur on all
levels to be precise, as mentioned above.
Firstly it has been recognised that only a minimal
amount of the coffee produced under the KCU is sold on the Fair
Trade market. As mentioned before this means that the money acquired
from Fair Trade coffee sales will not increase the wealth of the
individual Bahayan small holder. The sales of Fair Trade coffee
can however, as pointed out by Nina Schiøtz, increase their
awareness of the real value of the coffee. The farmers have had
problems in getting their money on time from the KCU in spite
of the KCU involvement in Fair Trade, as pointed out by Jos Harmsen,
there is the problem of fluctuating interest rates. If the KCU
have to pay more than expected in the form of interest on loans,
the effect will then be a lesser price to the farmers in the end.
Often the KCU have to take loans to buy up the coffee from the
farmers, but often the farmer does not get the entire payment
up front, only a part .
The quality requirements in the Fair Trade initiatives
can function as a limiting factor as a result of lacking incentives.
If the price received from selling a small per cent of the production
on the Fair Trade market amounts to almost no increase in wealth.
Furthermore the buyers of the coffee, the First World importers
and retailers, prefer to buy coffee from high quality areas, and
this can effect the possibilities to increase Fair Trade sales
for some producer organisations, including the KCU. The KCU produces
mainly robusta coffee which is considered a worse quality coffee
compared to arabica and also there are no immediate measurements
taken towards certified organic production. One other barrier
for the KCU is that the consumers prefer better quality coffee
(particularly as they are paying extra for it as a Fair Trade
commodity), so Arabica products are desired. Of course robusta
is the main export commodity, so this could entail a change of
crop for the smallholder , which is not feasible because of environmental
conditions required. It must be made clear, however, that with
no increased wealth as a consequence of growing organic coffee
the lacking incentives will not be reversed and this in turn means
that there will be no immediate interest in certified organic
production from the farmers view. Consequently the KCU will not
have better quality coffee to offer and therefore will have problems
in increasing their share of coffee sold on the Fair Trade market,
which in turn could result in increased wealth for the individual
small holder. All in all a vicious circle starts to appear, which
can only be dealt with through informing the farmers, maintaining
the transparency of the producer organisation and thereby maintaining
a foundation of trust that could move the farmers in the right
direction with no immediate personal gain for the individual farmer.
The strong control of marketing and coffee exporting
by the Tanzanian government, although now being dissolved, still
has an effect in present day Tanzania. The strong influence by
the TCMB and TCB has had on the co-operative unions, an influence
never well liked amongst the Bahayan small holders, has left a
sense of mistrust towards the administrative levels of the KCU.
This mistrust could have been the cause for recent rumours about
the involvement of corruption in the case of late payments to
the farmers.
The scenario.....
Given the scale of the challenge, this is likely
to be a lengthy process. Perceptions, attitudes and expectations
may all have to change. Any programme for a transition to sustainability
must be translated into a series of clear, practical and politically
feasible steps. Given the fluid and dynamic nature of the challenge,
it is unlikely that we will ever be able to anticipate exactly
what steps might be necessary and practical at future stages.
Max Havelaar have to keep in mind a decision making process that
is adequate to the task and can adapt to change. The process must
have a feed back mechanisms at each of the key levels of policy
development and action. Results should continually be compared
with expectations. The policy commitments themselves must evolve
in the light of increasing knowledge of the social and natural
worlds, and of the nature of interaction between them, and in
the light of the practical experience that will be gained during
the course of implementing the strategy. It is difficult for us
to predict the various dimensions of the problems and the bearing
they have on each other. The impact of extra money from Fair Trade
on the smallholders would depend on many factors, the first and
most obvious being how much extra income the coffee brings in
compared to the prices of the consumer goods.
Incentive may be to move away from diversification,
although they will never go fully over to monoculture due to their
indigenous ingrained cultural traditions. Agriculture and other
forms of human land use can induce land degradation. This can
take different forms, including soil loss through acidification,
alkalisation, salinisation, denaturation, wind or water erosion,
and desertification. Some forms e.g. gullying are more obvious
to the human eye, others are less apparent such as chemical action.
Basically environmental degradation and a decrease in sustainability
is difficult to measure in the system. Seen in relation to the
farming practices of the Bahaya, the Fair Trade objectives of
working towards "sustainable production methods" would
not entail significant changes in coffee cultivation methods.
Although there is safety in numbers for the small-holders they might feel a need to join a smaller organisation based on member initiative, as opposed to the KCU's leaning towards state influence. For the moment KCU is the predominant co-operative organisation in the Kagera region, but after the market has been opened up, the incentive to sell to competitors, or form new co-operatives, becomes more appealing. The KCU is not the only legal buyer of the small-holders coffee anymore. A complete restructuring would need to occur to form a more democratic entity (although this is difficult to define).
Jos Harmsen states that : 'Volumes of Fair Trade
coffee sold by unions in Tanzania will never be big enough to
make farmers notice a relevant financial impact. For big unions
experience, no matter how small, in exports is more important
than volumes. A first step in Max Havelaar Fair Trade initiatives
will give them the opportunity to get access to regular markets.
'Consequently regarding the long term objectives of Max Havelaar
: If the producers are mostly growing coffee for Fair Trade, the
extra money, profits, could be an incentive for growing more coffee
contrary to the objective of the diversification of crops. A
solution to this could be to only buy some of the coffee produced
from a given co-operative. There is a need in the political process
to give a capacity for a better equipped challenge to tackle the
future, because waiting for the market to work for their needs
is not a plausible option. In essence policy reforms are needed,
but not the type of SAPs that have been imposed in previous eras.
They should provide a supporting framework that will encourage
co-operatives to be more independent. This is an area that we
have not researched in detail, therefore it is difficult to expand,
but we are aware that it is a critical factor. This is an external
factor in our given system that Max Havelaar can not control or
influence a great deal, as present political structures and ideologies
in Tanzania are inevitable out of their hands. There is a dilemma
with the fact that of Max Havelaar facilitating and not imposing
on agents involved It is a very sensitive role to play.
The impact of extra money from Fair Trade on the
smallholders would depend on many factors, the first and most
obvious being how much extra income the coffee brings in compared
to the prices of consumer goods. Given the fact that organic coffee
fetches a considerably higher price than other coffee (15 cents/lb.
extra), this factor seen in isolation would seem be an incentive
for farmers in the Kagera region to grow coffee organically.
This could lead one to conclude that shifting over to organic
cultivation would therefore be advantageous for the producers;
however, a number of factors have relevance in this discussion.
Incentive may be to move away from diversification, although they
might never go fully over to monoculture due to their indigenous
ingrained cultural traditions. The role of education is a way
in which moral values and positions in society could be developed
if Max Havelaar intends to continue trading with the KCU.
Basically, environmental degradation and a decrease
in sustainability is difficult to measure in the system because
sustainability encompasses the social and economic aspects as
well, so it will be difficult to monitor any progress in the short
term. Fair Trade could reverse the trends of the declining soil
fertility in the area if organic methods of nutrient recycling
are fully implemented. Most of the coffee producers in the region
are smallholder farmers, who grow coffee only as part of a highly
diversified agroforestry system. With the exception of the wealthier
farmers, who only make up a small percentage of the producers,
most of the coffee growers don't use many chemical fertilisers
or pesticides. Thus for the most part, the system can be characterised
as a low external input agroecosystem, with a correspondingly
high amount of both energy- and nutrient recycling.
Again, the extra profits would in theory make up
for the investments, but this would be a matter of time, because
buyers would have to be willing to pay the extra money; this being
dependent on the willingness of consumers to buy the coffee. As
only a small amount of coffee from the KCU is being sold on the
Fair Trade market now, a relevant question is whether a market
for organic coffee would be established quickly enough to cover
the large costs described above, given the fact that the money
used for the investments undoubtedly would come from bank-loans
at relatively high interest rates. It is possible that the organic
coffee would be easier to sell than the 'normal' coffee grown
in the region. The poor-quality robusta coffee is harder to sell
on the world market, but the present trends in 'healthy' consumerism
could provide a niche for the coffee which it had not had previously.
In America, for example the trend has been for consumers to desire
a better quality coffee, as well as a slight decline in coffee
purchasing in general (UN sources), hence the future demand for
KCU's coffee is in jeopardy.
To summarise therefore, we can but pose more questions
:Will this ever equal a truly sustainable system (along the
lines of that which Max Havelaar desires) give all the external
as well internal barriers to development?; Could sustainability
be reached without Max Havelaars initiatives, bearing in mind
that there seemingly are so many limitations to the development
of Fair Trade?; Indeed, is it possible to define a truly sustainable
system?.
Future research to determine the possible outcome
of Fair Trade practices is of course needed. The smallholders
future would really be dependent upon an increasing consumer awareness
in coffee in Denmark for sustainable development to progress.
Demand for Fair Trade coffee would have to be increased. If their
coffee was not grown as Fair Trade it is then reliant upon unstable
market prices (and all the other complexities in the coffee market),
but at least the Government gets a source of revenue from the
coffee, which it would not receive from bananas (the alternative
main crop grown). Inevitably the nation state causes quite a barrier
to everyone's interests but this is an external factor which is
not in the control of Max Havelaar, they will have to work around
these barriers as much as possible. Perhaps the farmers would
be better off growing bananas for the local market (as beer etc.)
or as a subsistence crop. We propose that demands should constantly
revised and that more research should be implemented in this area.
At present the demands and ideals are too general in respect to
Kagera's infrastructure (demographic, economic and environmental)
and even short term objectives can not possibly fit in the system
in all respects as they were designed for Latin American co-operatives.
Previously in the 60's and 70's a lot of politics has entered
the co-operatives and they did not benefit the smallholders,
therefore when searching to support the small farmers, Max Havelaar
could have some doubts about co-operation with these old co-operatives.
A longer time may be needed as a temporary assessment measure
to gain better insights into functions, before a final decision
is made as to whether they can be a suitable Fair Trade partner.
Social factors are essential in the decision making, therefore
consequences from economical and political decisions should be
related to the social consequences more often than not.
Given the fluid and dynamic nature of the challenge
it is unlikely that we will ever be able to anticipate exactly
what steps might be necessary and practical at future stages.
" Consumption is an active mode of relations, a systematic mode of activity and a global response on which our whole cultural system is founded. In short it is a means to an end." (Baullrillard, 1988). This project does not present simple answers. This is partly because the concept of sustainability is not simple. Also the barriers to this development is so interrelated and complicated. The analysis that must underpin any genuine transition to sustainabilty, given the highly complex pattern of interaction between the social, economic and environmental systems concerned, must be sophisticated.
Commodifictation is an important ingredient of power. It is of course part of the process of Globalisation. It is not just about the market, it is also about the process of accumulation of benefit through its alienation from the realm of the unpredictable. This form of accumulation is one of the major props of centralised power and as more aspects of life become more commodified, more and more regulation takes place and less remains free. As Marx stated in through his first volume in capital - commodity fetishism ."A mere thing takes on a spectrum of values as soon as it is commodified." We have identified a chain (coffee trade) which is indeed, part of a larger system. A commodity being something (inc. services and attributes) which is buyable, and it is subject to market forces, with all the morality and politics which adhere to these. We have aimed to illustrate the realities of this through our case study.
In the 1992 World Development report, the UNCED presented the suggestion that there is a need to derive a development that is both people centred, concentrated on improving the human condition, and conservation based, maintaining the variety and productivity of nature. Humans beings are at the centre of concern for sustainable development.
" Economic growth is seen as the only way
to tackle poverty in 'Our Common Future', hence to achieve
environmental development policy objectives." (
Adams, 1995) It must however be a new form of growth, sustainable,
environmentally aware, egalitarian, integrating economic and social
development. It should entail freer market access for the products
of developing countries, lower interest rates, greater technology
transfer and significantly larger capital flows. We are pessimistic
in our outlook for the future concerning sustainable development
through Fair Trade. We feel there is a lack of appropriate mechanisms
for effecting change, and the power and degree of vested interests
that seem likely to resist change. Even with all the international
organisation, agreements and understandings, there will always
be some insurmountable barrier or another. Systems such as these
are so complex to define, let alone evaluate that controlling
agents will never be fully in charge. They can never know the
truth at all levels. Corruption could continue to a certain degree.
What Max Havelaar intend to do is work towards a sustainable goal,
but this is so long term that it is difficult to visualise for
those that are bottom levels in the chain - the producers. Awareness
is inevitably important, but this entails a good education. There
will always be divergent interests in this global system of trade,
fair or otherwise, because humans are the 'loading factors' and
are never predictable.
Local systems of value are being overturned by a global market system which the developing world have no tools to conceive of. Peoples relation is to the land, non market values then retreat in to subordinate realm of tradition guarded predominantly by survival instincts, but externally under siege from market forces once commodity becomes part of experience. Only when tradition is commodified as heritage does it become revalued, but this is full of obvious contradictions i.e. construction of barriers to the flow of benefit reinforced by legal systems and structures of social differentiation. The competition introduced is supposed to minimise costs. Access to economic benefits is needed for the whole community (in terms of investment of the production), but this is difficult with the Bahayan village class structure. Also, if more than one crop (e.g. bananas) is sold as Fair Trade, then maybe this will add to achieving sustainability to a greater extent.
The global society is driven by the production of
commodities. They chose both the commodity and the method by which
it is produced according to what they expect from it. Commodities
are fashioned that will, as near as possible, mirror consumers
desires. The media to a large extent creates these desires and
manipulates them. The product must be made appealing to the consumer
- profit satisfaction from a bargain! Max Havelaar as a facilitator
of change have to work towards a consumer awareness that will
present the coffee product as a necessity in peoples lives.
It may be necessary for some kind of prevention against
the ability of TNCs to evade environmental regulation by moving
beyond the jurisdiction of nations in a position to impose such
regulation. Markets should be subject to controls and not 'free',
hence the smallholders need empowerment or protective measurement
to enable the global gap to be reduced and to protect them more
against TNC's if possible. This is a big 'if'. With the increasing
importance of market value, ideas about society change; at all
levels up from the individual to the global an 'economising'
sets in. A significant aspect of that is that the individual is
encouraged to perceive themselves as a site of investment. Fair
Trade takes on a humanistic approach in the sense that it considers
producers as a person, not a thing. The global ecological crisis
is of a global concern and responsibility, we believe that it
is the rich nations who have the greatest share of responsibility
to respond to the challenge. "At the same time social
relations become laterally stretched and as part of the same process,
we see the strengthening of pressures for local autonomy and regional
identity important as the world is experiencing the process of
Globalisation."(Giddens, 1990) Fair Trade emphasises
regional identities as an important factor as part of working
towards bridging the gap, to a certain extent, of the New International
Economic Order. They have the skill, resources, political and
economical power to start to develop solutions to these problems.
After all the developed world is creating the stress on the global
ecology directly and indirectly, so they should be the ones to
take responsibility for change. The sustainability debates that
have been occurring are at least a start, but as has been said
on a number of occasions, there is a long way to go to redress
the imbalance, we as humans have created in the world today. Fair
Trade might succeed in enclaves , but this may not surmount to
have an impact on a global level. We have not assessed other products
or other case studies to be able to define the extent to which
sustainabiltity could be reached. Inevitably, the sustainability
of the human species can only be defined, ultimately , at the
level of interaction between the entire complex of human systems
and all directly implicated environmental systems.