The Impact of Fair Trade On Small Mango Producers In The Philippines

By Father Shay Cullen, PREDA Foundation Inc., 23 October 2000

Fair Trade means essentially one thing—Fair prices for the products produced by the small farmers and cooperatives. Just prices can only be had when the producers have direct access to the buyers of their products. On the road to the market there are many middlemen who are like roadblocks barring the away of the farmers from making direct contact with the buying public thus preventing them from getting higher prices. This is an unfair system that FAIR TRADE can change. FAIR TRADE is a form of direct action that has AN IMMEDIATE IMPACT and changes unjust structures that maintain poverty and economic serfdom.

The unjust socioeconomic system set-up and dominated by a oligarchy of ruling elite is one of the main causes of hunger and widespread poverty in the Philippines as it is elsewhere in the Developing World. Small producers in the Philippines are at the mercy of a powerful clique that control production and the marketing of food.

Because of this system food producers are prevented from reaching the market but they cannot even fully own the fruit of their labor. Most work as tenant farmers on land owned by absentee landlords and they have to give as much as 40% of their produce to the land owner. In mango production they give 60% or 70% of the crop to the wealthy contract sprayer or the land owner. Since Spanish colonial times the land in the Philippines has been in the hands of a few very wealthy families and during the American colonial area and ever since little has change. The comprehensive land Reform although enacted into law has been ineffective.

This is because many of the law-makers, Congressional Representatives, and Senators are landlords themselves and from their position of power they pass amendments to the land reform act that make it powerless. They also use their influence to prevent the implementation of the law in their lands and others bribe government officials to find exemptions for them.

70% of the population are rural based and have remained in poverty because of the unjust economic and social situation. The population of the Philippines today is 65 million. If we can review this and represent the ownership of land and property in the Philippines in a Pyramid we can see that:

1. Only 2% of the population own about 70% of the means of production, land, infrastructure, factories and real estate.

2. A small middle class, about 20% of the population, have about 10% ownership.

3. Whereas the vast majority of the population are rural folk and make up 75% of the population but only own 2O% of the property among them all. Whatever food items they produce and can keep for themselves is usually only sufficient to feed their family but if they have a surplus they can never rise out of poverty because the prices of their products are controlled.

The Example Of Mangos

Mangos are a very delicious and desirable tropical fruit. The mango tree grows to a large size and can be very productive when fifty or sixty years old. The PREDA FAIR TRADE PRODUCT project is helping small farmers and farmer cooperatives to produce organic mangos in the traditional way both for the fresh fruit market and for making dried mangos with no chemical additives and preservative (SO2) free. Preda buys the fresh fruit directly from the farmers paying them a fair price by the kilo. In other provinces where there is a drying factory PREDA arranges for the farmers to sell their mangos directly to the dried mango processing factory and they bypass all the middlemen. Preda can do this because The Fair Trade marketing organizations in Europe pay a just and fair price.

PREDA Is a Philippine Non-Government Organization that helps farmers and other craft people to overcome the exploitation that causes poverty. It is a Fair trade organization that believes social change for the poor and the oppressed can come about through the practice of Fair Trade. Preda exports dried mangos sourced from poor farmers at Fair Trade prices and provides other development projects to the producers.

Higher Prices For Traditionally Grown Mangos

Many poor farmers have a few mango trees. Preda is encouraging them to plant more mango trees on eroding land. The mango trees have a network of roots that hold the soil and the water and improves their irrigation and earnings. The farmers are encouraged to continue to fertilize the trees for a good crop by keeping their chickens and water Buffalo under the tree to fertilizer it. They are encouraged to burn grass and leaves under the trees to help induce the trees to flower in a natural way. More and more farmers are putting small paper bags over the fruit when the fruit is a week old so they are protected and there is no need for pesticides. Others are encouraged to plant Neem trees near their mangos to ward off insects. When they do blossom the flowers are frequently attacked by insects who lay eggs that destroy the flower and so there is no harvest.

Contract Spraying

In recent years spraying Potassium Nitrate has been used to induce the tree to flower and then pesticides are used to control the insects that attack the blossoms. This can produce a very rich crop of fruit and does not harm the tree if it is done once only every two years. But poor farmers cannot afford this procedure but the rich middlemen or the land owner can and they frequently get the farmer to sign a contract to allow them to spray the trees and control the insects. For this contract service the middlemen claim 60% of the harvest and give only 40% to the farmer. Sometimes the division is 30% for the farmer and 70% for the capitalist. So the farmer earns very little from his trees and his work of harvesting.

A Buyers Market

Some small farmers harvest what the tree produces naturally others borrow money at high interest rates to spray their trees themselves. But they don't have access to a fair market. Most towns in a mango growing areas have a mango buying station usually owned by a wealthy family or by a export company. They set the buying price by size and weight and poor farmers do not have the contacts or transportation to sell their fruit in the urban wholesale market or to exporters.

Unless they are members of a well managed cooperative they do not have the large quantity that would make individual marketing profitable so they sell at the local buyers price. In some areas the local buyer is also the capitalist for the spraying and thus has a monopoly of the harvest. Also the same capitalist controls the supply of the flower inducer and the pesticides. So individual farmers have to pay a higher price if they want to spray themselves. Cooperatives can help farmers in the production stage if they have the capital but the cooperatives cannot get control of the market.

Spraying of potassium nitrate and moderate use of pesticides on the mango flower or blossom does not effect the fruit. PREDA encourages farmers to attach bags to each fruit to eliminate the need for pesticides on the fruit.

The PREDA Organization is linked with FAIR TRADE ORGANIZATIONS such as GEPA (Schwelm) and members of the European Fair trade Association (EFTA) and Third World Partners (Ravensburg). These groups have a market and they pay a fair price for dried mangos. This enables PREDA to challenge the monopoly or the cartel in a given area and bring the farmers in more direct contact with the market and get just prices.

PREDA gets a just price for SO2 free dried mangos from the Fair Trade Organizations and can offer high farm gate prices to the farmers for organically and traditionally grown mangos and encourage them to grow traditionally. To increase production without using chemical inducer the Project offers the farmers organic fertilizer made from compost or more refined fertilizer made from worming castings. It trains and financially assists the farmers to produce this fertilizer themselves by setting up vermi-culture production units on their farms. This is a slow process and we are only beginning to have an impact.

PREDA PRODUCTION LOANS

For those farmers who are exploited by both the contract sprayer and the monopoly and who insist on spraying their trees to induce blossoms also want help from Preda. Preda while encouraging them to grow in a traditional way with natural fertilizer still helps them by giving them low interest production loans and training in how to bag the fruit so they have no need for pesticides. Preda also buys their fruit, not by contract pricing, but by the kilo. If the farmer cannot reach the Processing factory to sell directly the farmer still gets the same high price from Preda. PREDA CAN ONLY DO THIS BECAUSE IT HAS JUST PRICES FROM THE FAIR TRADE ORGANIZATIONS.

This is one example of how FAIR TRADE directly benefits small producers who are victims of cartels and monopolies in The South and helps break the cycle of exploitation and poverty.