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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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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Feeling Festive at Shared Interest HQ

Every year following the December board meeting Shared Interest staff and board members take part in a festive challenge.

Last year we were faced with a particularly difficult quiz. This year we went down a more creative route and were tasked with decorating Christmas cakes.

Surprisingly all teams took the challenge very seriously and there were some pretty impressive results.

In other festive news the 2011 Christmas card should be with all members by now, if you haven’t received yours please get in touch with the team.

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And the winner is….

Ten year old Liam from Benton Park Primary School in Newcastle

Congratulations to Liam and the rest of his class. The pupils all received a Fairtrade t shirt, complete with Liam’s design as well as a VIP trip to the cinema.

The Real Radio team visited Benton Park last week to deliver the good news in person, Liam was thrilled to have won and the rest of his class were very excited to be included in the prize.

To see Liam, his t shirt design and pictures from the Real Radio visit click here.

We are currently in the process of evaluating our Fairtrade Fortnight campaign but initial findings suggest that our work with Real Radio and the Newcastle Fairtrade Partnership has been successful in achieving the aim of raising the profile of Shared Interest and Fairtrade within the region.

We look forward to building on these achievements during Fairtrade Fortnight 2012!

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An informal settlement experience

By Account Manager (Africa) Rita Musyimi

Approximately 25% of Nairobi’s population lives in the informal settlements, also known as slums. Most of the people moved from their rural homes in search of job opportunities in the city. However these jobs proved elusive and they found themselves living here. Even so an entrepreneurial spirit is ever present in these settlements. There are money making opportunities that could be leveraged to increase economic activities and strengthen the communities. Private social enterprises have come to the rescue of these communities. As a social lender Shared Interest falls under this ‘’rescue team’’. On day three, we visited an existing handicrafts producer and a potential new customer based in these settlements. In the former case opening up a line of credit for the producer has meant that they have stayed in business for several years and grown their business to compete globally. In the latter case, recycling and reusing of materials was the mainstay of their operations. The youth involved were not only working on a project that is eco-friendly they were also carving out a decent living. The quality of the products produced right in the middle of an informal settlement where ventilation is a big problem is amazing. From this seemingly nonplussed environment the youth do have a computer and internet connection. It is also clear that their customer care standards are unrivalled by most big companies. It is difficult to fathom the source of these quality products especially when you see them displayed in exclusive stores in Nairobi. With a little bit of help, with better ventilated premises, these youth can do wonders.

Youth and Ingenuity 

Some of the producers visited in Nairobi and its environs were quite young. They are using their creativity and innovation to earn a decent living. How do you fancy running a business in the shell of an old bus? Yes, a potential customer is doing just that. There are two such bus shells on their premises. After the bus company decommissioned these buses the young man and his family moved them to a rented location in the outskirts of Nairobi. He saw an opportunity in them and created an ‘office’ and ‘factory’ from them. He also does not pay for some of the raw materials. Overgrown bamboo trees are a nuisance to a nearby school as they are a breeding ground for snakes. This man offers to cut them down. The school is happy to have this done for free. For this young man the bamboo is used to create wonderful gift items. When not using bamboos, they prune overgrown branches from cypress and jacaranda trees in the compound and surroundings. What he saves in the bamboo, he has to pay for the pruned cypress and jacaranda.

Brace yourself for the location of his board meetings. This is where we were invited to discuss all matters financial. It is right under a tree shade and the seats are tree stumps carved out to make a very comfortable sitting area. With such ingenuity it would be unfair of me to ask how he makes his power point presentations. I reckon he would provide another very innovative answer. Actually, wasn’t his power point the whole tour from bus to tree? Successful and environmentally sustainable businesses are made of stuff like this, we can all agree.

Moving on to another producer…How do you provide quality assurance training to women who have minimal or no formal education? It is happening right in the heart of Maasai land. The two educated project managers tailor the training around the practical things that the women do on a daily basis, like buying lessos (clothing used by the Maasai).  Lessons on quality are derived from this. No written manuals (they can’t read them in any case) and the associated costs. Talk about keeping costs at a minimum, how clever is that!

Matters personal 

In between and at the end of the official trip are two weekends. This is time well spent with family and friends

As the trip comes to an end, I recap the whole experience and realise that indeed I soaked it all in very well. And yes, I remember some more words of the song:

‘’My Land is Kenya

So warm, wild and free

You’ll always stay with me

Deep in my heart, deep in my heart’’

 As I return to my adopted home in Newcastle, I say Kwaheri ya kuonana (So long) to ‘Enkare Nyirobi’*

*The name “Nairobi” comes from the Maasai phrase Enkare Nyirobi, which translates to “the place of cool waters”.

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All in a day’s work

By Account Manager (Africa) Rita Musyimi

Day two and we literally hit the road running with the work. After lunch we proceeded to our first meeting with a social lender based in Nairobi. It is amazing the spirit of social lenders in ensuring that no producer is driven out of business. This meeting was all about what both Shared Interest and this lender could do to ensure the producer under discussion remained afloat in business. After some negotiations and consultation with Andrew Ridley, our Credit and Services Manager in Newcastle, a win-win situation was reached and happily the producer is still in business.

In contrast to Newcastle which was still quite cold when we left, the temperature was really high in Nairobi, at least 260C or more. Lots of water intake kept us from getting dehydrated.

The only producer I visited away from Nairobi is based in Eldoret in the Rift Valley Province. The name Eldoret is derived from the Maasai word ‘eldore’ meaning ‘stony river’ because the bed of nearby Sosiani River is very stony. The white settlers decided to call it Eldoret to make it easier for them to pronounce it. It lies approximately 2,300m above sea level. It is one of Kenya’s bread baskets with the major crops being wheat, pyrethrum and maize. For cheese lovers, the Doinyo Lessos Creameries Cheese Factory produces about 30 types of cheese, as well as ice-cream and yoghurt. The town is home to some of Kenya’s renowned international athletes. It also houses a university and teaching hospital in Kenya, a polytechnic and textile factory.

The town has a number of factories, one of which I visited on my second day in Kenya. Well, only this time it was not a factory processing wheat, pyrethrum or cheese but one which handles a produce that is as small as it is little known – bird’s eye chillies. The chillies are so named both due to their small round shape and because they are widely spread by birds. They are a perennial plant that can be harvested all year round. The fruit (yes, fruit not vegetable) of the bird’s eye chilli is popularly used as a spice and chilli condiment in oriental cuisine. Next time you enjoy the fiery zing of an oriental dish, think bird’s eye chillies. Oh and in medicine the bird’s eye chillies were traditionally used to ease arthritis and rheumatism and also as a cure for toothache and, erm flatulence.  It was also used as a natural insect repellent when mixed with water. Woe unto you if after applying the insect repellent mix, you then went ahead and rubbed your eyes.

After providing a general overview of the business, a very enthusiastic Operations Director took me on a tour of the factory where the chillies are processed into powder form before packing for export. I was clad in mouth guard, head gear and dust coat. Despite all this health and safety armour, I still suffered stinging eyes, an irritated throat and incessant sneezing and coughing. A real test to the strength of my lungs, but I survived the tour. I wondered though about the toughness of the workers in this factory, who work there daily without all of these safety measures. I was informed that with time one gets used to the conditions.

While a 40-minute flight got me comfortably to Eldoret, travel by road was a different matter. Two visits to chillies farmers were scheduled. We managed to visit one farmer approximately 40 kilometres away in Soy area. Despite the use of a 4-wheel drive vehicle, the ride was bumpy and rough and took at least one hour. Didn’t the taxi driver in Nairobi tell me the roads would be brought up to the standards in the West? This is definitely one of the counties that will have to work extremely hard to get investors and resources to fix the roads here to the standards aforementioned. Needless to say half way through the journey to the second farmer, the trip was suspended. We had to factor in another bumpy ride back and check in time for my flight back to Nairobi. We managed to get to the airport at least one hour before departure, heart in mouth for fear of missing the last and only flight back to Nairobi.

All in all, the producer works with these challenging circumstances. The field extension workers have to contend with these rough roads on a daily basis as they make their way to the farmers using motor cycles. After such gruelling trips they sometimes find that the farmers are not tending or have not harvested the chillies. I learnt that due to the high potential nature of the agricultural land in Eldoret, the farmers here do not like to farm chillies as it is considered a ‘poor man’s crop’. Therefore the extension workers have to go farther afield to reach farmers in lower agricultural potential areas. This costs the producer that much more in terms of time and money. Not to mention, the shipments sometimes get routed in the wrong direction. This particular producer had just received news that a shipment they sent to Germany had somehow managed to find its way to a port in Iran!

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My Land is Kenya

By Account Manager (Africa) Rita Musyimi

I recently returned from a trip to Kenya. This was more than just work for me as it gave me the opportunity to return home and visit friends and family. Over the next three days I will attempt to bring you a taste of my trip, sharing my experiences.

Going back to my roots and to my producers

Days before the planned trip I found myself packed and ready to go. As I packed my bags I couldn’t help but sing Roger Whittaker’s song:

‘‘My Land is Kenya, Right from the highlands to the sea…’’

Never mind that I couldn’t remember most of the words. I ended up humming it instead. I beg your indulgence for this kind of excitement, but then again it has been a long time since I was home. Coupled with the fact that I will be meeting my producers for the first time. This time round I will only visit producers in Kenya. During this trip I am in the secure company of my colleague, Elisabeth Wilson.

The long awaited trip finally came to fruition on 23rd March. It was not without a certain amount of angst that I looked forward to the aircraft landing at the main airport of my homeland. The events that characterised this country in the last three years include skewed elections and a near-genocide crisis that ensued, a political power sharing agreement, a referendum, a new constitution, pro-market reforms and economic growth. I find myself thinking about the talk about restoring our national unity that has been the discourse in recent times and wonder if it is indeed true that the situation has gone back to what I remember it to have been as a child, secure and with a heritage of splendour.

I had been warned that I probably would not recognise some of the erstwhile familiar roads in Nairobi. What with all the infrastructural works going on. That became apparent as we drove from the airport to the hotel. The taxi driver wondered where I had been while all the work on the infrastructure was on-going. You do feel rather silly when such a question is posed to you. This is home after all and I should be up to speed with all this information. However there is a fine line between what you read in the press, hear from family and friends, and the reality of experiencing it first-hand. I could not help but wonder how I would soak in the whole experience during the following days.

‘’When these road works are completed the towns will have a completely new face with very modern highways just like the ones where you have come from’’, the driver added in Swahili with pride. He probably would have wanted to add that with the new constitution, government will be established and resources devolved at county levels, meaning expansion of opportunities for job creation and for small businesses not just in the major towns but countrywide. I suppose against his better judgement he decided to keep that information to himself. Nevertheless I could sense the great strides made during my absence. It all began to come back to me: ‘’Kenya Vision 2030 – towards a globally competitive and prosperous nation’’.

Rachel Ngondo, our Business Development colleague in Nairobi came to the hotel the following morning to take us to the office. Up until now I had only communicated with Rachel via email and telephone so a first time meeting was a special encounter. She is as warm as she sounds on telephone. We chatted like old friends at a school reunion. Later at the office Elisabeth and I were introduced to Kennedy Mwasi, our new colleague in the Nairobi office, whose genteel manner is refreshing. We also got introduced to and met the rest of the fair trade fraternity who share office premises with Shared Interest in Nairobi.

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Budget Post Mortem

So how do you feel about today’s budget?

 There are no huge surprises but it is pleasing to see that the 1p fuel duty rise suggested by labour has been scrapped.  With the ongoing unrest in the Middle East affecting the UK’s fuel supply, fuel prices have remained an increasing concern, especially for SMEs.  At Shared Interest, we encourage our staff to travel into our city centre office on public transport and the majority do.  Our function in the fair trade movement doesn’t require the shipping of goods but many of our buyer customers would have been affected by a further rise in the cost of fuel, and will be relieved to see the fuel duty stabiliser kicking in. 

I am also interested to see that £2bn in extra funding has been allocated to the development of the Green Investment Bank, to launch in 2012.  This was something that was mooted in last year’s budget but what followed were differences in opinion over what powers the bank should have.  Shared Interest is proud to hear that the UK is widely regarded as a leader in green financial services.  Many of our own investors come to us because they would rather their money was being lent to businesses in the developing world than sitting in a UK bank account.  Those who decide to get involved with the Green Investment Bank will benefit from a similar social return in knowing that they are investing in a low-carbon infrastructure such as renewable energy and the development of new, clean technologies.

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Budget Predictions…

As we all wait with bated breath for today’s Budget results, at Shared Interest we would be hoping for various aspects of change (in an ideal world.)  One of them is around VAT.

Following the increased standard rate of VAT from 17.5% to 20% on 4 January this year, there have been suggestions that this may only be a temporary increase and that a commitment should be made to bring VAT down again at some point in the future.

 I think this is probably unlikely, and whilst for consumers this inevitably means price increases, we are hoping to see sales of Fairtrade goods continuing to grow past the £1bn barrier as British consumers continue to put their ethics first.  Still, for businesses generally, rising VAT doesn’t always have a direct impact as they are in effect just collecting net VAT for the Government.  However, because we lend money to fair trade businesses in the developing world, we cannot charge VAT to our customers.  This in turn means that we cannot recover the VAT we pay our suppliers back in the UK.  As an increase in VAT affects us on both sides, it would be good to see the possible decrease some have predicted.  Not long to wait now until all is revealed….

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