There was a time when Fair Trade was believed to be the domain of charities such as Oxfam and TraidCraft. Over time though, particularly since the early 1990's, it has been recognised more and more that businesses have an increasingly important part to play in ensuring producers in developing countries get a fair share of the value from their efforts.
Producers and traders alike are being encouraged to register with, and join, increasingly complex and burdensome "official" Fair Trade organisations. These organisations, year-by-year, introduce ever tighter strictures, to which participating individuals, businesses, and charities must adhere. This creates a dilemma, and one that long-established charities are fully aware of. As the rules and regulations of the fair trade certification bodies expand, the costs of maintaining compliance also balloon disproportionately, leading to pressure on trading margins. That pressure in turn, finds its way to the originally intended beneficiaries of the principle of fair trade, and the prices they receive begin to reduce.
What can be done about this?
The fair trade certification organisations began with some excellent intentions and precepts - those are still valid today and should not be discarded. However, the cost-increasing bureaucracy that has developed around such schemes can easily be dispensed with, and a simple adherence to the core values of trading fairly can yield better benefits for all concerned. Businesses and philanthropists can take the core intent of fair trade and use it to formulate a mission statement. That mission statement doesn't need to be registered with Charity Commissions or accreditation bodies, it simply needs to be available for everyone concerned.
A fair trade mission statement should first and foremost be achievable.
It is no use drafting and attempting to adopt some airy-fairy, pie-in-the-sky, utopian ideal. It will be either unachievable or unsustainable. Either of which does more harm than good to the intended beneficiaries who need long term benefits. Offering hope and then removing it destroys belief in the ability to escape whichever circumstance-trap the beneficiaries believe they are in. It is far better to offer too little, and then provide more, than it is to offer too much and provide less.
Fair trade is not charity.
In recent years, a statement that has become known around the world is, "If you give a hungry man a fish, he will be hungry again tomorrow. If you teach him to fish, he can eat for the rest of his life." In essence the statement is correct, but what do you do -
These are some of the real situations facing a great many people, in many parts of the world.
- when the man knows how to fish, and the rivers are fully stocked, but he is not allowed access to them?
- when the land is fertile and rain is plentiful, but the man is not allowed to farm by official decree, what can you further teach him?
- when he has marketable skills, but is not allowed to travel for employment, how can he earn?
- when his children have enquiring minds, or are sick, but are not allowed access to education or healthcare, how can they develop?
This page began as an explanation of fair trade, but it will continue as more of a history of our activities, to illustrate how we apply fair trade principles to our business.
The first challenge that we try to address at GazLanNaThai is: How can we offer opportunity and support, for the non-citizen ethnic minorities located here in Northern Thailand, without degrading their feeling of self-worth, or tarnishing their culture and traditions?
In a barter-based culture, is it right to create monetarism?
Despite the popular conceptions, Thailand is full of extremely wealthy individuals. There is a core group whose wealth exceeds that of the majority of individuals in western industrialised nations. Some are included in the annual Forbes list of the world's 500 richest people in the world. For the rest of Thailand though, their life rotates with their crops between famine and feast, or remains permanently at, or near, beggary-level. Perversely, amongst the ethnic minority Hill Tribes, such worries of wealth or want has not traditionally been a problem. Their cultures and beliefs revolved around subsistance cropping and animal husbandry, and the forests provided for all their other needs, including medicines, building materials, fibres for fabrics, and everything needed for daily life. Unfortunately for them, the government decided they must be modernised, civilised, and culturally brought into mainstream society.
One of the first initiatives, which is still underway today, was to convert their "native language" from the diversified dialects of Tai, into Bangkok's central Thai language. To do this required village schools and the teaching of other academic and scientific subjects, all done in Thai language, and despite being unrequested intrusions into millennia-old cultures, the cashless-society villagers were told they had to pay money for these services. Another unrequested intrusion was the connecting of the villages to the national electricity grid (not all have been connected, but the process continues). Household durables such as refrigerators and televisions were introduced to them, despite their complete ignorance of money and commerce. Naturally, switching overnight from such a Dark Ages environment, into the consumerist 21st Century, they became hooked on hitherto unknown "neccessities". But they still had no means to pay for them, and there was a period where unscrupulous dealers would act like conquistadorial gold grabbers. Eventually, the King of Thailand (HM Bhumiphol, Rama 9) had to step in and secure the lands of the hill tribes, granting them permanent tenure, and placing ownership out of transferable title into a Royal Trust. Later, he introduced the Royal Projects Foundation (RPF), which was initially intended to move hill tribe agriculture away from opium cultivation, but became a useful channel for teaching cash-cropping alongside improved subsistence farming. The hill tribes responded well and a few decades later, within Thailand, opium production is almost eradicated, and the villages have the means for cash-subsistence, but little extra.
Solutions and Activities
In response to answering our first challenge, the solution lay in assisting the hill tribe farmers to leverage their output and provide higher cash yields from their produce. Assisting peasant farmers has long been a cornerstone of fair trade movements, as witnessed in West Africa and the Indian sub-continent, but no-one had attempted it on micro-scales with remote and isolated communities. The RPF had taught the hill tribes how to farm high value temperate crops that would not grow in Thailand's tropical plains, and which were expensive when imported. A by-product of this was experimentation with herb and spice production, and from that came our own brand of Hom Aroi organic herbs and spices.
Developing Hom Aroi introduced us to additional products and suppliers as we travelled around buying stock, many of those handicrafts products you will find here in our store, or on other sites where we sell through online auctions. Since we began in 2003, we have worked hard to build sustainable relationships with our suppliers, engaging them in learning production planning methodology, and workload prioritisation skills, which have helped them to stabilise income flows and move away from the feast & famine cycles that once dominated their lives. Because we agree prices based on duration purchasing, and begin with prices that exceed the then current local market norms, we cushion them against downward fluctuations during gluts, and they reserve product for us during shortages. It is a symbiosis that benefits them, our customers, and ourselves. Price stability is one of the greatest threats to maintaining a market for products. Together we reduce this threat as much as possible.
Compared to the scale of the issue, our contribution has been small, but by working with a select group of suppliers, we have concentrated the benefit on those whom we identified as willing to share their new knowledge. In this way it has cascaded out to many more than we could help directly. Most importantly, we have achieved this without compromising their culture and traditions, whilst at the same time we have elevated their self-esteem by assisting their self-sufficiency, interacting with them as equals, and providing skill they could never afford to acquire at colleges or university. By travelling to them, we have removed the access to market barriers that previously held them back, and the improved incomes are allowing them to acquire improved education and healthcare facilities for their families.
The second challenge we nicknamed the "Magpie Dilemma". As a westerner from an industrialised nation, I had become accustomed to mass-produced blandness before arriving in Asia. Everything I bought "back home" was homogeneous production-line stock. For someone with a strong artistic and creative streak, this became depressing at times, and may go a long way to explaining some of the more esoteric hobbies I became embroiled in over the years. Arriving in Northern Thailand, which is rightly acclaimed as the "Handicrafts Capital of South East Asia", I was like the proverbial kid in a candy store. Everywhere I went, and I do mean everywhere, were treasure-trove after treasure-trove of high quality handmade products.... and they were all for sale at prices that would dislocate British gift-shop owners' jaws.
It took me a few years to identify the "correct" prices that were expected by locals, and the most reliable producers with ability, skills, and desire to have their products marketed overseas, as opposed to those who merely wanted to "fleece" foreign tourists for quick and easy money. As with applying fair trade with the hill tribe farmers, I was looking for craftspeople who wanted long-term and fair, trading relationships. Yet I also wanted a lot more than that, I wanted to assist those with genuine needs that could not be resolved without partnership, and I wanted to ensure the survival of traditional skills in danger of disappearing. Perhaps I wanted to do for Northern Thai handicrafts what Jim Thompson did for Siamese Silk almost a half century ago? But where could I start? There was (and is) a bewildering choice of products.
The answer lay in following the original thoughts about assisting hill tribe farmers. Identify the disadvantaged and nurture their skills and opportunities. Because the lowlandhandicrafts industries are generally run by individuals without the educational and other restrictions of the hill tribes, it was harder to find "eligible" enterprises, and having done so, they tend to be faster learners. Generally, I targeted start-ups. I know from past experience that the first few years of a business are critical, most home and small businesses fail in the first year. This is the cash-flow critical period when guaranteed custom can make or break a business, and if you're from a cash-starved background, it makes it even tougher to survive into years two and three. I therefore decided that "one-person artisans" and "family staffed cottage industries" working exclusively with traditional skills, materials, and processes were my targets. That didn't narrow the field as much as you'd expect, until I realised that many of the businesses were not producers, but were resellers and commission agents making a few extra products on the side of agreements with source producers. I only wanted to trade with genuine manufacturers and source producers - that narrowed the field a lot.
Initially, my search for source producers brought me back to the hill tribes. Their honesty and transparency ensured that I could be certain of buying from original source, and of giving help where it was most needed. Fabrics made from hemp and handspun / handwoven cotton were amongst the first ranges added, this sent me off on a quest for similarly hand-produced silk, and for products made from those three materials. I have never changed the group of core suppliers identified years ago, and again it's paying off for everyone. Another early product range was handmade mulberry bark paper, known as "saa" in Thai, which linked nicely with the silk in an eco-friendly way. Silk worms eat the mulberry leaves, leaving the branch stems, which are then stripped of their bark for making the paper. Excellent symbiosis, but of greater importance was the opportunities that those two materials gave to disadvantaged workers. Both are very easy to work with, and allow creation of stunning products with minimal skills and tools. They are both relatively cheap and in good supply here, and in recent years we've leveraged that to "grub-stake" talented individuals who couldn't afford to get onto the handicrafts design-produce-market ladder. Those that persevered have flourished I'm pleased to say.
Case Study - Dok Mai handcarved-soap tropical flowers
When I first met Miss Ui, she was just launching her carving business and had taken the same tiny booth in Chiangmai's Night Bazaar that she operates today. She had moved (14 hours by bus) from central NE Thailand to be able to sell her products in a handicrafts-rich environment. Within months of her arrival, the copy cats began appearing, and now, four years later, of the dozens trying to do what she does, only one has come remotely close to the quality she produces.
Those copy-cats were a severe challenge to the sustainability of her business. They attempted price challenges and captured some custom that way. At one point they even created a co-operative to flood the local market and squeeze her out through volume. Our contract purchasing, at fair trade pricing and terms, allowed her to weather the storms until most of the copy-cats realised they simply could not compete with her quality, and gave up.
Working with GazLanNaThai since 2004, Miss Ui has produced, and we have shipped, several tens of thousands of her stunningly detailed flower, as wedding favours and gift-shop supplies, mainly to the UK, but also to Poland, Israel, the USA, Canada, Australia, most north-coast Mediterranean countries, and several in the Caribbean. When we married in 2006, Tan and I chose Ui's roses for our own wedding favours, and they were admired by guests from 3 continents.
Dok Mai now has two retail outlets, several carving and painting staff, and wholesale customers throughout SE Asia, Australasia, the Middle East, and Central Europe. Ui has stated she will not sell wholesale to the UK or North America - she wants GazLanNaThai to remain her exclusive distributor for those regions.
The spectrum of our fair trade and philanthropic adventures are not confined to the brief outlines above. We have "our fingers in many pies", some minor, some quite major by our scaling. You'll find mention of them in some of the product category header-descriptions as you browse through the products in our store.
When I first began using the internet to market hill tribe products, a lot of competitors tried to copy what I was doing. Unfortunately for them, they believed I was buying stock whilst on holiday and they copied that too. This caused them to have trans-shipping overheads (between Thailand and their home country) which had to be added into the product cost before they could resell the items they'd bought, which still sold quickly. Others emulated them, and at different times the market gets flooded and spoiled with whatever is fashionable each year. In agreement with our suppliers, we wait. This market flooding happens in cycles. Four years ago it was hill tribe fabric products, for the last two years it has been handwoven raw silk, and now the saa paper products are showing the same trend. This doesn't mean those holiday buyers are selling successfully, it just means that for a period they disrupt the market, and when they give up or run out of stock, we're still here, still supplying our growing list of wholesale customers.
When a market is flooded with a particular product, supply and demand dictates that prices fall. My suppliers understand that, because I've not only taught it to them, I've shown it happening to them. Unlike the tourist-opportunist buyers & resellers, my suppliers and I can wait - the products are produced here, we have no trans-shipping costs, and if we really need to, we can sell direct and undercut them all. But that wouldn't be fair to our trade customers, nor would it be trading fairly in general, and remember, we're in it for the long haul, not just this year's fad. Our mission statement is to improve life's lot for our suppliers, and you can't do that if you get into price wars.
If you're into institutionalised regulation of fair trade and similar activities, you need to visit the following websites
Fairtrade Labelling Organisations International (FLO) probably have the best known fair trade logo in the western world
FLO FAQs & Links
FLO-CERT GMBH are the certification body for the FLO
Quote - "Why doesn't FLO certify handicrafts?"
Fairtrade Certification and its system of minimum pricing were designed for commodity products. It is technically difficult to adapt this model of standardized minimum pricing to crafts and other products made by small-scale artisans, which are each unique and have highly varied production processes and costs.
Gaz says - Just as well the handicraft artisans have got us then, isn't it? (I knew there was a reason for not registering with FLO).
World of Good. an eBay initiative to introduce standardisation into trading fairly on eBay.
Some Recent discussions about fair trade on World of Good
Is Fair Trade Fair?
Quote - "There's been a fire storm in the Fair Trade world in the week preceding the UK's Fairtrade fortnight (Mar 2008), as a UK-based policy institute this week slammed Fair Trade, saying that the practice distorts the market and traps some of the world's poorest farmers in a cycle of poverty. The report "Unfair Trade" issued by the Adam Smith Institute, says that the fair trade movement does little to drive the momentum of the global food chain.
The report's author Marc Sidwell claims that consumers who buy Fair Trade products end up spending more money on poorer quality goods, due to the fact that the Fair Trade system pays farmers a fixed price. This leads to farmers not being pushed financially to improve the quality of their products, and they may even hold the best of the crop back to sell on the open market Sidwell said."
Gaz says - Like the response from FairTrade UK, I dispute the report author's assumptions. His logic seems entrenched in the days of colonial plantations and "tiffin at three". Today, fair trade is not just about price maintenance against market dips, it's about producer development and diversity of opportunities, education for all, and removal of opportunity barriers.
Nagging Doubts about Fair Trade
Quote - "Could the Fair Trade movement, full of artisans painstakingly handcrafting each item, meet the demand of literally millions of cards in the United States alone? Some would say that Fair Trade is a niche and isn't expected to scale up to meet the demands of the entire economy. Then what about the notion that Fair Trade is an alternative that can be applied to the conventional way of doing business? I mean, if we can't get consumers what they want quickly and plentifully, are we really proving Fair Trade as a business model?"
Gaz says - It's a valid point by the author. However, because GazLanNaThai is located at the source, and markets the products globally, we have the advantage that as far as mail-order goes, we can not only "scale-up", but we can also respond near-instantly to market demands.