Vince Caruana, President of the Fair Trade Cooperative Society, operators of L-Arka Fair Trade shop in St Paul’s Street, Valletta, explains how a profitable business can be run along Fair Trade principles.

Coffee is blessed with an aroma that is as rich and tantalising as the profits you could make if you speculated in commodities, whether your preferred trade was in coffee, tea, sugar, cocoa or any other. All potential money minters, these markets offer rich pickings to traders with foresight and luck – sadly they do not do much for the people who actually produce them.

On the contrary, as prices fluctuate according to investors’ and speculators’ whims, the ripples reverberate all the way down the production line, causing instability, insecurity and uncertainty to dictate the progress of entire national economies and then continue unabated until they wash with accumulated force against the livelihoods of the often poverty-stricken peasant farmers and plantation workers who sow, tend and pick the produce.

Out of every Lm1 you spend on a jar of coffee, the farmer in the developing world gets 8c – while the speculators and the multinationals sweep up the rest.

Does this sound fair to you? Well it certainly did not to Vince Caruana, indefatigable campaigner for third world causes, and President of Malta’s only Fair Trade Cooperative Society – operators of L-Arka Fair Trade Shop in Valletta that offers consumers the choice to purchase goods and ethnic products that allow a fair profit to be earned by the producers.

“I am a member of an NGO called Third World Group,” said Mr Caruana, as he explained how he got involved in the Fair Trade movement, “and though we were doing valuable work among people living in depressed conditions, about four years ago we realised that our work was all dealing with the end result of poverty, and not addressing the causes at all. So we decided to find a way in which to identify and promote fairer structures that would actually combat poverty from its roots.

“The Fair Trade Movement has exactly this mission; by buying goods directly from producers or growers in Third World countries, avoiding middlemen and paying a fair price that reflects the market value of the goods, Fair Trading offers these people the opportunity for a decent return on their labour, as well as a sense of security in long-term planning for the future, whether it is for their village or for their children’s education.

“Where there is market speculation dictating the terms of their livelihoods, you get situations where the father of a family can afford to send his child to school one year, but not the next. You get a situation where, if commodities trading has lowered the price of, say, coffee, growers get less for their product than they have paid to produce it. This means wages for workers are drastically effected and makes it impossible for these people to ever plan confidently for the future.”

So, as part of the Third World Group, Mr Caruana and a number of other members got together to form the Fair Trade Cooperative Society. “We discussed what structure we should adopt,” said Vince, “and decided that if we want to reflect the values of Fair Trade and democracy we should opt for a cooperative. Of course, we don’t make any money out of it – we are all volunteers and it is written down in our statute that we waive our rights to take profits. But the profit that the cooperative makes is either re-invested in the cooperative or sent out to support projects to alleviate poverty. It was very important to us to keep the same spirit of volunteer work as we had at the Third World Group.”

The Fair Trade Cooperative imports third world Fair Traded goods that have been produced or manufactured by workers’ cooperatives or companies that offer suitable conditions and fair wages. Consumers of these goods are offered firm guarantees of this, as each and every product imported can be traced back to its source, and detailed information about the manufacturers is available. The Fair Trade Cooperative Society is able to assure these guarantees through their affiliation with Bolzano-based CTM, an Italian Fair Trade Movement that runs over 100 shops around Italy. They are also members of IFAT, the International Federation for Alternative Trade, which is a global network of 142 Fair Trade organisations in 47 countries.

“Having decided to start doing this properly,” continued Mr Caruana, “we obtained a loan from an Italian Bank, the Banca Etica di Verona, whose pledge is to re-invest profits in alleviating poverty, and bought a shop in St Paul Street, Valletta. This was a complex step for us to take, as we had no-one with any experience in business on the team – one of our members actually studied for and did an accounts O’ Level just to be able to help run the business!”

A committee of six meets and coordinates all the activities of the cooperative, that includes some 20 members, with 15 being active. Apart from the stock sold in the L-Arka, their Valletta outlet, the Fair Trade Cooperative Society also goes on the road with their products, selling them at fairs, parish halls, bazaars and other events where people congregate.

The range of products includes Fair Traded coffee, tea, honey, jam, biscuits, chocolate, wooden and woven crafts, books, clothes and textiles, stationery, jewellery and gifts and many others. Each item is guaranteed and sourced, and come from countries like Peru, India, Zimbabwe, Bangladesh, Chile, Sri Lanka, Thailand, Kenya, Indonesia and so on.

But can a business that offers no profit motive to its founders ever really be successful? Most seasoned businessmen would say no, but Mr Caruana, though pragmatic, believes it can be successful. “We think we can marry the two concepts of business and generosity, though it is difficult. In fact, one of our main weak points is that we have no true business acumen, and are having to learn everything from scratch.

“I, for example, am a teacher of mathematics, and have never been involved in business at all. But we are fortunate in that we find the help of others who offer their advice and support on a voluntary basis, and just three years after we bought the shop, we are now breaking even. Our turnover at the end of 1999 was Lm14,600, and we have expanded our stock base from Lm3000 worth to LM8,000.”
Unfortunately, the location of L-Arka in the bowels of St Paul’s Street means that they get practically no passing trade, and, as I know from exasperating experience, might even be losing specific customers who fail to locate the shop easily.

“In fact,” agreed Vince, “we are not happy with the location because it is not central, and we are trying to look for something more central. However, we have to find something affordable. We do not want to have a situation where the meagre profits are gobbled up by exorbitant property prices. For example, we were negotiating with a prominent shopping centre to have our goods sold from an outlet there, but the operator wanted 35 per cent on every item! That would be completely pointless.”

The long-term objective of the Fair Trade Cooperative Society is to make fair-traded goods accessible to as many people as possible. Finding the right, centrally-located premises for their shop is one way of doing this, and they will then be able to cash in on the current trend for ethnic crafts and giftware that has become such a strong retail market.

Besides that, they would like to see their foodstuffs available in mainstream supermarkets. “In England,” said Mr Caruana, “you can buy the fair traded coffee, Caffe Direct in Sainsbury’s and all the other major supermarkets. In other places coffee shops offer customers the choice between normal and fair traded coffee – this is an excellent way of expanding not only the business ideal, but also the ethos.”

So many people are disturbed by the idea of richer countries exploiting the poorer ones and distressed by news of poverty and famine in the third world.

“Many people ask, what can I do to help?” said Mr Caruana. “But apart from charity we couldn’t propose much. Now we can. Now we can offer people the chance to choose to consume a fair traded product, and know, while they are sipping their hot brew, or munching their chocolate, that the person who produced it has got a fair deal. They can be certain that at last, while enjoying a highest-quality product, they are also doing their bit to alleviate poverty in the world.”

The rallying cry of the Fair Trade movement around the world is Trade Not Aid. The people they aim to help are not beggars. They are workers of dignity and industry. All they ask is a fair deal.

Contact the Fair Trade Cooperative Society at L-Arka, 306, St Paul’s Street, Valletta, or on tel: 244865, or email: [email protected]