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Yakity yak about fair trade: Helping poor producers by paying them more

WHEN it comes to helping the poor, many people think about charity donations, international economic assistance, major agriculture, water and other projects.

Some people travel to developing countries to help with their own labor and expertise.

In China, many still think first about donations - cash, clothing, equipment.

There's another, far better way to help the poor - empowering them by buying their "fair trade" products - at a fair price to the producers.

Fair trade products cost about the same as other products, but much more of the ticket price goes to producers themselves, helping them improve their lives.

These products are also green, environmentally and socially sustainable.

The slogan is "Trade, Not Aid."

Fair trade is a social movement that works with marginalized producers and workers to help them move toward economic self-sufficiency and stability.

Middlemen and their costs are eliminated as much as possible.

Common fair trade products are coffee, cocoa, tea, sugar, bananas, honey, cotton, wine, fruit, chocolate, flowers and handicrafts.

Fair trade first appeared in Europe in the 1940s to develop fair trade supply chains in developing countries.

It's very new in China. Just a few overseas-invested fair trade organizations help disadvantaged producers in remote areas; the work is mostly handicrafts. So far there are no Chinese mainland-owned fair trade companies.

There is, however, an umbrella fair trade organization, IFAIR China Fair Trade Center, which was set up last August.

It helps find sales opportunities within China and abroad for disadvantaged workers while promoting fair trade.

So far, seven associations of poor handicraft workers have agreed to work with IFAIR; they are in Beijing, Shanghai, Sichuan, Jiangsu and Guizhou provinces.

Saturday is the eighth World Fair Trade Day since it began in 2002.

IFAIR will spread the message all day on Saturday at Thumb Plaza in Pudong.

A fair trade market on Sunday will sell embroidery by Qiang minority women from Sichuan Province.

Their community in Aba Prefecture was severely damaged by the earthquake on May 12 last year.

Helping disadvantage people make money selling their products is better than giving them a handout.

The spirit is the same as teaching a man how to fish, instead of giving him a fish.

One of the first fair trade companies in China is Shokay International, a yak wool products company headed by CEOs Carrol Chyau and Marie Sue, both Harvard graduates. Chyau is from Hong Kong and Su is from Taiwan.

While working in a charity project in the Tibet Autonomous Region in January 2006, they realized they could help poor herdsmen sell their yak wool.

The herdsmen's Heimahe Village was one of the poorest in China.

The local government had tried to help Tibetans and given them free shops to operate on tourist streets. But Most sold their shops to others, since they didn't know about business or shopkeeping. They did know a lot about herding and yaks, however.

Chyau and Sue decided to purchase yak wool directly from the herdsmen at a relatively high price and sell the yak wool product after processing by handy housewives in Chongming Island (County) in Shanghai.

The plan, already underway, increases herdsmen's income and personal livelihood in the short term and over time means they can invest in their communities.

The plan won first place in the Harvard Business School's Business Plan Competition, with a cash prize of US$15,000.

They used the money to launch the company and started purchasing wool at twice the market price, with help from the local government.

To process the wool, they went to older housewives in Chongming who hadn't forgotten the domestic arts, including knitting.

"Though these women are wash-outs in many people's eyes because they know nothing about modern technology and computers, they have their own precious gifts," says Sarah Kong, PR manager of Shokay International. "They are all excellent knitters and can execute various patterns."

In the last century, most Chinese housewives were skilled in sewing, knitting, embroidery and other skills.

They were, and some still are, as good as professional tailors. The skills were passed from mother to daughter over the years, but many were lost in big cities where mass production took over.

A young American designer works with the housewives to ensure the products meet market needs and standards.

The women in Chongming design and create them and exchange ideas with the designer to ensure popularity.

Products include hats, scarves, sweaters, socks, toys and many other items.

"The housewives love the work. It doesn't occupy much time as they can knit while watching TV or taking care of the baby," says Kong. "They say that seeing their products sell well gives them a sense of joy and success."

So far, more than 50 housewives in Chongming and 260 Tibetan herdsmen are involved in the yak wool business.

It has 130 sales points in the United States and opened its first retail shop in Shanghai last year on Taikang Road.

"In addition to explaining the quality of the products to consumers, we also tell them about the herdsmen and housewives," says Kong. "We let them know that their purchase really helps others."

The idea of connecting young designers and handy housewives also inspires Chen Lecong, director general of IFAIR, who helped organize I-MART in 2007.

It's a touring free market where young designers sell their creations.

Few factories will accept small orders from designers, so producers are needed.

Housewives with skill and time are ideal, and they need the money. It's very similar to fair trade.

Worldwide fair trade sales amounted to about US$3.62 billion in 2007, a small amount, and accounted for 1/20 percent of all sales in certain product categories in Europe and North America.

It's still very new on the Chinese mainland.

There are yet no locally invested fair trade companies or organizations on the mainland, according to Chen.

All the fair trade companies and retail stores are initiated by either foreigners or Hong Kong and Taiwan business people.

"Donation is still the only way in most Chinese people's eyes to show support for the poor," says Chen. "It is time for a change."

Charity can help people in tough times, but it seldom makes for fundamental improvement, he adds.

Chen and friends launched IFAIR China Fair Trade Center in 2008, and began looking for opportunities for disadvantaged people to work and sell their work. The idea is "buy it, in order to help them."

"Good design, quality and practicality are usually what we consider when buying a product," says Chen. "Some people may also consider the designer or manufacturer, but few cares about the individual who made the products, let alone what he or she will gain through our purchases.

"But what if you are informed that buying A will benefit the poor maker with 25 percent income of the price, while purchasing B only fills the middlemen's pocket?

"We are not advocating buying something you don't need just for charity," says Chen, "but if you like a certain product, you can choose a better and fairer way of purchasing."

Fair trade fair

Date: May 9, all day

Venue: 199 Fangdian Rd, Pudong

Qiang folk crafts sale

Date: May 10

Venue: FoxTown Xujiahui, 899 Lingling Rd

Yak products store

Venue: Bldg 9, 274 Taikang Rd (in Tian Zi Fang area)


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