Introducing the Fairtrade Access Fund
It’s hard to pass a Starbucks without grabbing a cup of delicious Fairtrade coffee. Not only is the coffee great quality but the Fairtrade certification guarantees small-holder farmers a fair price and investment in environmental and economic developmental projects that benefit the whole community. Today, I am so happy to be sharing an exciting new development. Fairtrade International, together with Grameen Foundation and Incofin, are launching a new Fund for smallholders. And guess who was the first company to put up their hand, and put in their money? Yes – Starbucks.
Tackling poverty through trade is not the work of a year, or even a decade. It’s always difficult and complex, with problems springing up as fast as the crops themselves. So whenever you talk to the farmers, while they are always proud of all they have achieved through Fairtrade, they are also always vocal in sharing their many problems. And top of the list? Time and again, it’s their inability to access credit. For example, when I visited coffee farmers in Rwanda with Starbucks a few years ago, they kept on raising the issue. It’s a finding underlined by recent research too – for smallholders cash is king; and they need the right amount of money at the right time in the harvest cycle if they are to unleash their full potential.
Really that shouldn’t surprise anyone. We all know how small companies in the UK are banging the table about not being able to get finance. Imagine the problem multiplied tenfold. Smallholder farmers are not exactly the darling of the banks, who consider them too high risk – and constantly shut the door in their face. While the need of a coffee cooperative is for more than micro-credit agencies, which have expanded rapidly, can offer. Farmers’ leaders say that the problem has got worse since the economic crises of 2008, with rural banks closing and conditionalities rising. Yet they desperately need cash to kick-start a virtuous cycle of investments in improving their farms, their quality or productivity. Which is why Fairtrade International, Grameen Foundation and Incofin put our heads together to come up with a solution – the Fairtrade Access Fund.
This unique partnership between Incofin Investment Management a social investment firm, Fairtrade International and Grameen Foundation, will provide farmers’ cooperatives and associations the long-term loans they need to renew their farms or adopt new technologies and equipment. What’s more, the fund will also offer a new service that will give farmers access to business information on Fairtrade certification practices, crop management and localized market information via their mobile phones. It will also ensure technical assistance to enable farmers’ organizations to strengthen and secure their businesses. Also of this will be available from this autumn and Starbucks have pledged the first €1 million in loans into the Fund. Everyone’s hoping other companies will also be contributing soon. But meanwhile, it’s good news worth celebrating with a good cup of coffee.