Why is there a cut in Fairtrade Money? Print E-mail
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Thursday, 04 September 2014 00:00

There is no official in Belize who can actually answer the question as to why Belize’s assistance through Fairtrade is being cut but there are many indicators that can give us some idea as to why it is happening.  

Julio Cesar Escalante, a career public servant in the Ministry of Economic Development finalized his doctoral thesis in February 2013 at the Centre for Development Studies, The University of Auckland, New Zealand. It was entitled “The Politics of Fairtrade Sugar in Belize: Fairer for Whom? The document is quite compelling and examines the topic quite extensively. While that is so, what is very interesting is what the document says about the Belize Sugar Cane Farmers Association and the way they handle the finances derived from Fairtrade.

The thesis explains that the BSCFA was first certified in 2008 but “Just over a year after the BSCFA was certified it was then suspended for a litany of noncompliances with the Fairtrade standard. These related to mismanagement of the premium – totaling almost US$4m in the first year – and a lack of accountability in the governing committees.” The thesis continues: “Canefarmers had little knowledge of Fairtrade” “in the beginning many cane farmers were against Fairtrade funding being used to pay for new vehicles and increased wages for staff of the BSCFA because the budget was well in excess of a million Belize dollars. In addition many interviewees reported that they had seen the machineries of the BSCFA in plots that belong to farmers who serve in the association or their relatives; the machines in question were fixing feeder roads.”

Then there was the issue of farmers receiving assistance, being provided fertilizer. The thesis explains how it was to have been distributed; “The issue was rooted in the formula that the BSCFA had set for allocation, namely, for every 45 tonnes of quota, a farmer would receive one sack of fertilizer. For many interviewees, this was considered insulting. Most of the cane farmers had a quota that ranged from 75 to 150 tonnes and therefore, receiving two to three sacks was like a “slap in the face” as one of them expressed. Moreover, it was evident that the larger farmers with over 400 tonnes of quota were the ones receiving the most subsidies, which was held to be unfair to the majority. To make matters worse, interviewees noted that they were required in some instances to build new sheds for the storage of these agrochemicals and that the fertilizers and herbicides prescribed under the Fairtrade standards were more expensive than the ones they previously bought. Since the subsidized allocation was not enough to cover their needs, they had to buy additional amounts of inputs at an average extra cost of BZD$20 or more.”

Over the past few days, Alfredo Ortega has been making the media rounds explaining that the Fairtrade cut will affect social programs that BSCFA runs using funds from the program, on Channel 7’s news he stated that “we have social programs in which we have been helping the education sector, infrastructure and healthcare, medicines and so on. With this reduction it means that many of those programs that we were contemplating before, we won’t be able to do so and that means that many of our staff at this point we will have to come to cut in regards to staff because of this situation.”

Escalante’s thesis however puts quite a damper of this seemingly philanthropic ventures. It says “In respect to these community projects, some cane farmers interviewed argued that fixing schools and providing scholarships to student is the responsibility of the government. Moreover, they noted that while projects have been undertaken in schools and health centres via Fairtrade, their size was minimal. It is worth noting here that there has been a drastic decline in the budget for the Social Programme through the Fairtrade scheme; in 2010 the allocated budget was BZD$500,000, but in 2012, this had halved to BZD$250,000.

Other participants spoke actively against funding for small projects, specifically for income generating activities in the Sugar Belt. A cane famer, Don Tilo, argued that small projects have always been a failure. As an example, he stated that for years, USAID promoted these types of intervention and these had failed. Moreover he argued that recently, under the Belize Rural Development Programme which is funded by the EU, the same types of projects have been promoted. Don rhetorically: “Where are the women that were baking cake, where are the women that were sewing? It is just a show…at the end they end up fighting and the group is discontinued”.

A different opinion on the social initiatives was provided by Don Felipe. According to him, there is a lot of favouritism when these projects are executed. He cited a specific example where three   scholarships were granted to one family who were well off, compared to others in the community who were in need. The reason for these scholarships given to this family was because a family member was part of the directorship of the BSCFA.

While Escalante’s study is compelling so too is information obtained by the Guardian which indicates that earlier this year the association put to tender bids for the supply of fertilizer to them. Four bids were entertained and it is amazing that despite the fact that the supplier who offered the best quality of fertilizer for the cheapest price was not considered. They instead opted for a supplier who provided the fertilizer at a more expensive rate causing the farmers to lose out on a few hundred bags of the product. Of course the finances used were Fairtrade money.
Most recently. In July of this year, there was the decertification of the association after Flo-Cert, Fairtrade’s certification body conducted an audit and found that 78 thousand dollars of finances provided by Fairtrade were misappropriated.

Is it a wonder why it is that Fairtrade is cutting the premium money to Belize?    
Tilo asked