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WTO failure aids farmers
Trade talks' collapse a plus in poor nations
Susan Ferriss - Cox International Correspondent
Tuesday, September 16, 2003

Cancun, Mexico --- Within hours after the surprise collapse of World Trade Organization talks Sunday, members of the U.S. trade delegation were jetting home in defeat. At the other end of the power spectrum, it was a victory.

Small Latin American coffee farmers, African cocoa producers and others rejoiced in the failure to reach a new agreement to eliminate trade protections and open countries to more corporate investment.

They also were able to use the meetings of the powerful 148-member organization as a showcase for modest but growing efforts to make global trade fairer for developing countries' farmers, who are on the lowest rungs of the international trade ladder.

A few miles from the convention center where WTO delegates met, fair trade enthusiasts gathered to show off coffee, chocolate, tequila, Nepalese jewelry and Panamanian and Peruvian woven clothes whose profits go more directly to producers rather than middlemen.

International aid and development groups, like Oxfam, are worried that the globalization of trade is creating a ''race to the bottom'' that is driving down prices for commodities like coffee and chocolate and making farmers in poor countries vulnerable to greater exploitation.

To combat this, a global network called Fair Trade Labeling Organizations International has established a way to certify that products are produced without labor abuses and with prices that are higher because of their quality or because they are organic.

The push is on to get more products with fair trade labels in retail stores as diverse as Whole Foods and Trader Joe's to Safeway, Starbucks and Dunkin' Donuts.

The U.S. donut chain, which includes 3,500 franchises, announced this year that its new espresso drinks would use 100 percent ''fair trade'' coffee beans, a decision that Oxfam praised.

''Fair trade makes a big difference to us. With fair trade sales, we've been able to get villages potable water, sanitation facilities and more money to invest in other economic activities,'' said Appiah-Kubi Abraham, who was in Cancun to promote the Kuapa Kokoo cocoa bean cooperative, which unites 40,000 farmers in Ghana.

The farmers in Ghana earn only about $400 a year from their cocoa, but set aside some of their surplus to invest in infrastructure, such as a public well, or projects to develop new sources of income and reduce their dependency on cocoa.

The Kuapa Kokoo cooperative also owns 33 percent of the Day Chocolate Co., which sells Divine and Dubble chocolates, products that bear fair trade labels and are distributed in the United States and Britain.

The Washington-based Fair Trade Federation, which helped host the exhibit here, estimates that commerce that met fair trade standards surpassed $400 million last year, translating into an extra $30 million for producers in about 40 countries. While still small, it represents a 44 percent jump in such trade over last year.

Sales of fair trade coffee increased in the United States by an estimated 46 percent between 2001 and 2002. In Europe, where the concept is popular, overall fair trade sales increased by more than 100 percent in Austria, France and Norway during the same period.

''Fair trade is the only thing that is allowing me to support my family, to make sure they can have education and health care,'' said Daniel Chinchilla, 43, a Honduran coffee farmer in Cancun with the 10,000-member Honduran Coffee Cooperatives Central Union.

Because of a flood of coffee on the global market and the dismantling of international agreements that controlled its prices and supply, coffee farmers have been devastated by plunging prices for their beans even as retail prices have climbed.

An estimated 25 million coffee farmers in Latin America, Asia and Africa have seen prices drop by as much as 70 percent in five years, according to Oxfam.

The crisis has been so terrible, Chinchilla said, that he and other farmers haven't been able to buy fertilizers and other chemicals typically used on coffee bushes. But, he said, his inability to buy chemicals has helped him convert some of his fields to organic coffee, a process that requires several years of purifying the soil.

Chinchilla says he's successfully converted some of his crop to organic beans and is receiving a fair trade price guaranteed at almost double the conventional coffee price. His coffee beans end up mostly in the Netherlands, Norway and Denmark.

The farmer is grateful to the fair trade movement. But he doesn't see the World Trade Organization, whose aim is to reduce tariffs and boost investment worldwide, as a positive influence over the lives of peasant farmers like himself.

''World commerce is basically in favor of the big multinationals,'' Chinchilla said. ''There is an injustice in the price of coffee. We see that every day coffee is sold for more and more, while what we producers earn is nothing.''


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2003 The Atlanta Journal-Constitution