The Brazil Nut Effect

After six hectic days of travelling we are coming to the end of our journey.  Today we met with of CANDELA PERÚ; some people may recognise the brazil nut organisation from the video we produced last year.

Candela has been established for 23 years and mainly works with brazil nut collectors in the Madre de Dios area of Eastern Peru.  Collectors or “Casteneros” are given 40 year concessions to collect nuts and one concession can cover 800 ha.  A massive area particularly when one considers that there may only be 1 tree per hectare.  Collectors can carry their nuts for three days to get to the nearest collection point.  The collection season is also very short at 3 months so the life of the collector is extremely difficult.  30% of the collectors have no other form of income.

The aim of Candela is to work with these grass roots communities providing river transport, establishing committees, providing food, training and with the help of a Shared Interest lending facility, they offer their 300 Casteneros much needed credit.  The nuts are brought to the CANDELA factory in Puerto Maldonado where they are shelled and dried before being transported by truck to Lima. Here the nuts are dried further, sorted, graded and vacuum packed for sale.

Brazil nut facts:

Brazil nut trees grow wild in the rainforest.  They can take up to 30 years to mature and can live up to 1000 years

The trees can grow up to 50m tall and 2m wide and require a specific bee to pollinate them which has made cultivation attempts largely unsuccessful.

Brazil nuts are not actually nuts. Like horse chestnuts, they are seeds contained in a capsule or pod, which splits apart. True nuts don’t split – the seed and the fruit are one and the same. 

The pods contain up to 24 nuts and can weigh up to 1KG.  These wooden capsules fall to the ground in the rainy season and are gathered by the collectors.    

A Brazil nut is 65 per cent oil. In a packet of muesli full of seeds, nuts and cereal, Brazil nuts always end up on top if you shake the packet; this is called the Brazil nut effect.

 

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A Lifeline for the Community

Edwin and I had a very moving experience visiting the inspirational association Intercrafts Peru. This co-operative represents over 20 producer groups and 1,400 members.  General Manager, Moner Lizana Huaman described the organisation as a family and many of the artisans we met echoed this sentiment.  Moner wanted me to pass on his thanks to Shared Interest investors for providing the funding to “change lives”. 

We saw how the groups recently approved term loan was being put to good use, funding the construction of a new building.  This new office will house 25 staff and will be a base for artisans to meet, share ideas and discuss their future vision. 

Whilst visiting Intercrafts we met Ildefolso a jovial man who is responsible for communications.  Ildefolso was suffering from kidney failure and attended hospital every other day for dialysis.  This vital treatment was only made possible through health insurance received from Intercrafts.

  

We also travelled to see one of the producer groups “Asociacion Casa Betania”.  There we met Emily, a weaver who had worked for the association for seven years.  Emily explained that she liked coming to work where she made colourful hats and jumpers for sale.  The money she earned meant she could have a better life for her family.  As we travelled to our next appointment, through the suburbs of Lima and witnessed the local hardship, it was even more apparent that this co-operative provides a lifeline for the community and really does change lives.

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Coffee, Cocoa and Social Impact

On Wednesday we left the banana plantations behind to visit Cepicafe to learn more about their Fairtrade coffee, sugar and cocoa exports.  When we arrived they were hosting an international conference but Finance Manager, Jose Fernando Reyes Cordova still found the time to show us around their facilities. Cepicafe is a fascinating model that really helps grass roots communities. Farmers are encouraged to work together in associations in order to increase the scale of production and reduce costs.  Once the association is large enough they are given assistance and staff to become independent. 

Cepicafe exports sugar, coffee, cocoa, marmalade and juice.  Shared Interest funds have been particularly helpful in this time of high coffee prices. During our visit we looked at the sugar and coffee processing, before heading out to see the cocoa farms.

Sugar cane needs a lot of sun to grow so the region is perfect. Cepicafe works with 700 sugar producers and by exporting sugar cane they have improved their quality of life and self-esteem significantly. Particular emphasis is placed on training the farmers to reduce their costs and maximise their yields.  Working with the farmers has also resulted in big reduction in alcoholism due to the sugar being used for other products and in addition, the increase in price makes alcohol less cost effective to make.

Cepicafe has seen a huge growth in cocoa production and export.  There are a number of factors that have led to this increase.  Firstly buyers are looking for a high quality aromatic cocoa.  Also the quality of the bigger cocoa producers has reduced but the most important factor has been the marketing of white cocoa “Porcelana” which is considered the best in the world.

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Going Bananas in Peru

I have learnt a LOT about bananas in my first few days in Peru so I thought I would share some banana facts with you.

Did you know that Peru is relatively new to bananas? Despite its late entry to the market the country has a competitive advantage in that the climate is relatively dry which reduces the risk of fungus and allows the farmers to cultivate their bananas without the use of chemicals.  It takes about 8 months for the banana bunch to grow.   First the ‘madre’ stem grows and three weeks after the flower appears small fingers start to grow.  A protective bag is then placed over the bunch to stop insects and birds attacking the fruit. 12 weeks later the bananas can be harvested.  The stem then dies and the farmer selects a “nino” child stem to grow and take the mothers place.  The process starts again.

Yesterday I brought you news of Banana co-operatives Cepibo and Appbosa.Since we met them we have visited two other banana groups, Bos and Apoq. Bos really felt like a community organisation. They have been using their Shared Interest term loan for a number of projects which include new storage, palletising and office facilities.  We went with the General Manager, Pedro Quezado to see the on-going construction work. Shared Interest’s lending has also enabled a government grant to be accessed to finance the projects. This new storage facility is important because it will reduce the waste created when containers are not available.  The next project will be a processing plant to make puree from the bananas which are rejected for export.  This will create 30 new jobs.  I spoke to one Board member, Mirta, who told me that she had worked with Bos for five years.  Previous to that she had sold her produce to the local market at a very low price.  Now she gets a good price for the bananas.  She told us that Bos had a very big impact on the community.  Each year they invite 750 local children to participate in learning activities.  Many more children go to school now and two young people have just graduated from university. This would have been impossible without the existence of Bos and the help of Shared Interest.

Later in the afternoon we met with Apoq is a small producer organisation with 458 members. All are small producers with on average 0.8 ha of land.  Since working with fair trade 7 years ago they have built their own packing plant and currently export 100% of their bananas. The social impact has been significant in this time.  They invest the Fairtrade premium to improve the packing stations and also help the producers with health and education.  They pay 50% towards a health insurance and the other half is paid by the farmer.  Training is provided on security, health, environmental impact and first aid topics.  Profits are reinvested back into the community with workers paid $10 per day, 25% more than the daily average.

I can’t resist sharing a few more banana facts…did you know that:

  • Bananas are the fourth most important staple crop in the world, and are significant for food security in many tropical countries. They are also the most commonly eaten fruit in the world.
  • If all the bananas grown in the world every year were placed end to end, they would circle the earth two thousand times.
  • World banana production amounts to around 81 million tonnes per year and due to the climatic conditions required to grow them, production is mainly concentrated in developing countries in Asia, the Caribbean and Latin America.
  • Fairtrade bananas were first introduced into the UK in 2000.

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Cableways and Nun Necks

I am currently in Peru with my colleagues Edwin Anarcaya and Paul Sablich. We are lucky enough to be visiting some banana co-operatives in Northern Peru and have seen first-hand the massive impact that Shared Interest funds have made to communities.

On our first day in Piura we visited Cepibo which is owned by 12 producer groups and over 1300 individual farmers.  Jose Lecanaque, General Manager showed us the new cableway they have installed to help the farmers take their bananas to the washing station. Previously the farmers carried the banana bunches 500m on their backs.  Now they pull the bunches along.  This still looked like very hard work but they were extremely happy with the improvement.  I spoke to Ana whose job it was to put lemon juice on the banana crown to stop the latex from leaking and damaging the banana in transit. She said that she now worked 8 hours per day and was paid a fair wage for the work. She was also a member of a union which looked after her welfare.  The new infrastructure has allowed them to increase exports from 150 containers in 2005 to 803 in 2011 and they are now exporting directly rather than through a third party which means they get paid a better price.

Later on that afternoon we met with Appbosa which started in 1983 with only 20 workers. The co-operative now has over 350 individual farmers in 12 producer groups.  Aingeru Garcia, General Manager explained that they have been concentrating on ways to increase production. They have installed an irrigation system which not only waters the bananas but also delivers fertiliser.  They have recently used their term loan to buy “nun necks” to protect the bananas and increase production.  These are very simple collars that stop the bananas rubbing and damaging the skin. These strategies have resulted in a 16% increase in production. He thanked Shared Interest’s UK investors for helping with this investment as it has had huge impact.  He explained that there was still much to do and they are now looking to build a small reservoir as they often run out of water.

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International Year of Co-operatives

The United Nations General Assembly passed a resolution declaring 2012 the UN International Year of Co-operatives on December 18, 2009.

The UN resolution entitled ‘Co-operatives in Social Development’ recognises the diversity of the co-operative movement around the world and urges governments to take measures aimed at creating a supportive environment for the development of co-operatives. Click here to go to the UN IYC website to find out more about the UN Resolution and about other UN IYC activities.

The International Year of Co-operatives, or IYC, celebrates a different way of doing business, one focused on human need not human greed, where the members, who own and govern the business, collectively enjoy the benefits instead of all profits going just to shareholders.

Having an International Year of Co-operatives provides an opportunity to captivate the attention of national governments, the business community and, most importantly, the general public on the advantages provided by the co-operative model.

As a co-operative supporting co-operatives this is an exciting time for Shared Interest. Our members invest anything between £100 and £20,000 with us. We then lend these funds out to groups such as Naranjillo.

Peruvian Fairtrade cocoa producers, Naranjillo are using financing from Shared Interest to develop their cocoa processing plant. This should increase productivity as well as improve the co-operative’s efficiency and sustainability. Regional Development Executive Paul Sablich said: “Thanks to our funds, Naranjillo was able to expand its Fairtrade cocoa sales to Europe and the United States. We hope to continue helping their growth in the future, for the sake of the 2,500 cocoa farmers that make up the co-operative.”

To find out more about the IYC and how you can get involved, visit www.2012.coop to find out more about Shared Interest and how you can invest visit http://www.shared-interest.com/invest.htm

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Vanilla Farming in Africa

Those Shared Interest members amongst our readers will recognise the above image from the Christmas card that we sent out last month.

Kisembo Saburole Jockas is a vanilla farmer from a village called Bumate in Bundibugyo District in the West of Uganda bordering the DR Congo. He is a member of a farming co-operative set up by Shared Interest’s customer Gourmet Gardens.  

Kisembo said: “I joined this group because many of the other buyers in the area play games with us, squeeze prices or only take the very best beans.  Some even forget to pay at all!  Gourmet Gardens accepts all good vanilla and pays fair prices.  They also provide advice on organic farming and pay without delay.”

Gourmet Gardens was set up in 2002 with the aim of becoming “renowned for outstanding products that are produced in harmony with nature and in a sustainable and fair relationship with the local producer.”

During the years of the war, the people of Congo suffered extensively and the local economy still offers few employment opportunities, despite the relative peace that has returned to the area. Agriculture is one of the worst hit sectors of the economy.

Our members’ capital helps Gourmet Gardens with their cash flow, enabling them to pay farmers at harvest time rather than once the order has been processed. In the case of vanilla it often takes up to 12 months to complete the harvest to sale process. This pre-payment is a great help to the likes of Kisembo.

Gourmet Gardens’ Operations Manager, Clemens Fehr said: “Establishing and running an organic and Fairtrade certified farmer group within the DRC is challenging. However, over the years we have found ways to deal with most of these issues. The exception remained access to adequate finance. The support of Shared Interest means that for the coming season onwards we will be able to buy the whole vanilla crop from the project group and we will be able to assure timely payments.”

“The co-operation with Shared Interest means adequate and long-term access to finance.”

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