Cultural Relativism in Fair Trade – an

Transcription

Cultural Relativism in Fair Trade – an Exploratory Study on Trade
Relationship Between Small Producers in Brazil and Their Market
Interfaces in Switzerland
DISSERTATION
of the University of St.Gallen,
School of Management,
Economics, Law, Social Sciences
and International Affairs
to obtain the title of
Doctor of Philosophy in
Organizational Studies and Cultural Theory
submitted by
Maria Angélica Miranda Rotondaro
from
Brazil
Approved on the application of
Prof. Dr. Yvette Sánchez
and
Prof. Dr. Thomas Dyllick
Dissertation no. 4059
Difo-Druck GmbH, Bamberg 2012
The University of St.Gallen, School of Management, Economics, Law, Social
Sciences and International Affairs hereby consents to the printing of the present
dissertation, without hereby expressing any opinion on the views of herein
expressed.
St. Gallen, May 29, 2012
The President:
Prof. Dr. Thomas Bieger
To the small agricultural producers
who, despite the odds, look for
alternative trade options with a strong
entrepreneurial mind-set.
i
Foreword and Acknowledgements
The decision to focus on the intercultural aspects of the commercial relationship
between individuals from nearly opposite socio-economic contexts, in a sort of
development system which aims to promote a better value distribution along the
chain from producer to consumer, came from my previous experience in
managing brands in different countries and cultures.
It was also motivated by an innate curiosity about Fair Trade and how the
relationships indeed take place in daily life, rather than the consolidated
messages communicated by the FLO label stuck on the bananas, tea boxes,
coffee packages, and other products available on the shelves of large retail chains
in Europe.
My own experience as a Brazilian expatriate in Switzerland allowed me to
undertake the process of adjusting behaviors to a new cultural environment and
to go through a self-questioning process about national identity.
Different people have been very supportive during my developing this study.
I am deeply indebted and thankful to Prof. Dr. Yvette Sánchez for her ideas,
recommendations and holistic supervision, as one goes through a lot in life
during the long years required for developing a doctoral thesis.
To Prof. Dr. Thomas Dyllick, I want to express my sincere appreciation for the
insights about this dissertation’s implications and the guidance for the
methodological session.
My special thanks to my life-partner Luiz Fernando Turatti for the many detailed
reviews and valuable discussion sessions. To my parents, my sister and brother
who gave me the ‘regua e compasso’ (ruler and compass).
I deeply value the main contacts in the cooperatives and buyers’ organizations
for their trust, and greatly appreciate their openness and availability.
ii
I also owe my gratitude to Max Leuzinger, my mentor when it comes to what a
fairer trade system should stand for, and the provocative discussions which led to
redefining this research topic during a visit to a cooperative in Brazil in early
2009.
Moreover, I would like to express my appreciation to Nísia Werneck and
Fernanda Belizário for the insights about this dissertation’s conclusions from a
South American point of view. And to Beat Gruenninger for the sounding board
about Fair Trade in Brazil and for setting up the contact for access to interviews.
I am equally thankful to Prof. Dr. Juergen Bruecker, for his support and trust in
my work as the HSG Sao Paulo hub representative. To Prof. Dr. Urs Jäger for the
methodological sounding board during a research project in Peru. To Prof. Dr.
Peter Ulrich for his advice to look for a more flexible type of job so I could
develop and finish my research.
Furthermore, I would like to thank my colleagues from the Swiss-Brazilian
Chamber of Commerce for their backing, to Marianne Rouiller who first took me
to the University of St.Gallen and her ongoing support since then, and to Ann
Puntch for her patience during the reviews of English and text consistency.
I would like to acknowledge that the conclusions express my own points of view
and are solely my responsibility.
São Paulo, May 2012
Angélica Rotondaro.
iii
Abstract
This study deals with the intercultural dialogue in the trade relations between
smallholder agricultural cooperatives in Brazil and their respective buyers in
Switzerland, both of whom operate within a Fair Trade system. An exploratory
research of qualitative nature, with an interpretative multiple case-study method
was applied and three commercial relationships were selected. One of the main
conclusions concerns the high influence of the constructs of fairness represented
in the messages communicated to consumers – which are translated into the
certification criteria – turning it into a self-fulfilling prophecy. Producer groups’
profiles, roles and “management models” are designed by the market and
certification agencies, based on their expectations about socio-environmental
issues from a predominately Eurocentric perspective. The results of this study
will contribute to an increased self-evaluation of buyers and producers about
their different business models, and on the influence of the role-play discourse
and built-up stereotypes that permeate this alternative trade system.
Resumo
Este estudo envolve o diálogo intercultural na relação comercial entre
cooperativas agrícolas de pequenos produtores do Brasil e seus respectivos
compradores na Suíça, ambos operando dentro do sistema de Comércio Justo.
Uma pesquisa exploratória de natureza qualitativa, utilizando-se do método de
múltiplos estudos de caso foi aplicada e três relacionamentos comerciais foram
selecionados. Dentre as principais conclusões está a elevada influência dos
constructos de justiça representados nas mensagens aos consumidores – que são
traduzidas nos critérios de certificação – tornando-se assim uma profecia autorealizável. Deste modo, o perfil, papel e “modelos de gestão” desses grupos de
produtores são formatados pelo mercado e agências certificadoras de acordo com
suas expectativas sobre questões sócio-ambientais, dentro de uma perspectiva
predominantemente Eurocêntrica. Os resultados desse estudo contribuem para
uma melhor auto-avaliação de compradores e produtores sobre os seus diferentes
modelos de negócios, e a conscientização da influência do discurso encenado e
dos estereótipos que permeiam este sistema de comércio alternativo.
iv
v
Table of Contents
Foreword and Acknowledgements
i
Abstract
iii
List of Figures
ix
List of Tables
x
Acronyms
xi
Part I – Introduction
1
1.1
Research Topic Justification
4
1.2
1.3
Research Question
Methodology
7
8
Part II – Theoretical background
11
2.
12
The Fair Trade Movement – Back to the Origins
2.1
2.2
Distribution Chain in a Fair Trade System
Challenges Facing Fair Trade as an Alternative Socio-Economic
Movement
21
2.2.1
2.2.2
Credibility and Transparency
24
The Fair Trade Minimum Price in a Global Food Supply Crisis 29
2.2.3
2.2.4
The Governance of Fair Trade Certification Definitions
Promoting a South-South Trade
2.3
Fair Trade in Brazil
2.3.1
Fair Trade for the domestic market
2.3.2
3.
20
Fair Trade for Export
Intercultural Dialogue
3.1
Communication Patterns
3.1.1
3.1.2
3.2
3.3
Collectivist and Individualist Decision Making
Direct and Indirect Communication (High and Low Context)
Time Management
Image Studies in the Intercultural Dialogue
30
32
34
38
41
42
49
49
54
55
60
vi
3.4
Brazil Hetero-Image
3.4.1
Indigenous People & The Tropical Paradise
3.4.2
The Foreigner in the Brazilian Imaginary & When Yes Means No.
77
3.5
Switzerland Hetero-Image
3.5.1
Being Neutral
4.
69
69
78
81
3.5.2
3.5.3
Overly punctual
Banks and Wealth
84
85
3.5.4
Orderly society
85
3.5.5
Stereotypes Germany – Switzerland
87
Fair Trade Image Constructs
89
4.1
4.2
The “Fairness” Construct
The Geography of Fair Trade – the North-South Construct
91
98
4.3
4.4
For Whose Benefit – the Marginalized Producer Construct
The Fair Trade Minimum Price Construct
104
108
4.5
A system of interconnected image constructs
111
Part III - Empirical Section and Case Study Analysis
118
5.
118
Empirical Session
5.1
5.2
Methodology
Method Limitations
5.3
Case selection criteria
5.3.1
Selected trade partners for the case studies
5.3.2
6.
118
119
120
121
Rationale behind the selected countries
122
5.4
5.5
Data Collection
Line of Analysis for each Individual Case Study
124
127
5.6
5.7
Case study structure
Cross-case Analysis
131
132
CooperCaju and Claro Fair Trade
6.1
The cashew nut cooperative - CooperCaju
6.1.1
Business Model
133
133
135
vii
6.1.2
Price Definition
136
6.1.3
6.1.4
Local Context and Self-Image
Collaboration Networks
138
143
6.1.5
Expected Challenges
6.2
Claro Fair Trade
144
145
6.2.1
Pre-assessment – Claro’s communicated fair trade messages to
consumers
146
6.3
The Image of the Other (general)
6.4
The Image of the Other in the way of doing business
6.4.1
Communication
6.4.2
6.4.3
6.5
7.
Trustworthy Relationship (and its different understandings)
Time Management
Conclusions
Gebana Switzerland and Gebana Brasil
7.1
Business Model
147
149
151
154
156
157
161
162
7.1.1
7.1.2
Price Definition
164
165
7.1.3
7.1.4
Expected Challenges
169
170
7.1.5
Pre-assessment – Gebana’s communicated fair trade messages to
consumers
170
7.2
7.3
7.3.1
Communication and Trustworthiness
7.3.2
7.3.3
7.4
8.
Future Orientation
Concern about Product Quality
Conclusions
Coagrosol and Rivella’s Michel FT Orange Juice
8.1
The cooperative Coagrosol
8.1.1
8.1.2
Business Model
Price definition
171
173
176
178
179
179
181
181
183
184
viii
8.1.3
8.1.4
187
8.1.5
Expected Challenges
8.2
Rivella AG and the product brand Michel
187
188
8.2.1
8.2.2
185
The trading company Fruitag
190
Pre-assessment – Michel’s communicated fair trade messages to
consumers
8.3
191
193
8.4
194
8.4.1
8.4.2
Time Management
Future Orientation
8.4.3
Trustworthiness
8.5
Conclusions
9.
Cross Case-Study Analysis
197
198
198
199
201
9.1
The cross-cultural contact zone in different distribution channels
201
9.2
Communication Patterns, Time Management and Collectivism
202
9.3
9.4
Constructs of Fair Trade
Country Hetero-Image
206
207
9.5
9.6
Regionalism
Not all mismatches are based on image and culture
208
208
Part IV – Implications and Final Considerations
212
10.
212
10.1
Implications for Practitioners
Awareness about the stereotyped Fair Trade messages
212
10.2 For the intercultural different ways of doing business: The Bridging
Actor
213
11.
Implications for the Labeling Organization
215
11.1
FLO System – better to lose the saddle than the horse?
215
11.2
11.3
Minimum Price and Fair Trade Premium
From a Social into an Environmental Certification Agency
217
217
ix
11.4
The FLO System Could Possibly Pass a Public Opinion Audit, but
(only) with Corrective Actions
218
12.
Implications for Future Research
220
13.
Final Considerations
220
Epilogue
223
Bibliographic Reference
225
Annexes
243
List of Figures
Figure 1: Fair Trade product distribution chain (Source: Transfair, 2009) and
Price breakdown for a 100g Fair Trade Chocolate Noir on a supermarket shelf
(Source: 20 Minutes Paris, no. 1592 published on March 31, 2009)
21
Figure 2- The nine value dimensions of the GLOBE study checked as is and how
they should be.
44
Figure 3: GLOBE Study value dimensions. (Globe 2004)
45
Figure 4: Comparative value dimensions scores for Brazil and Switzerland
(german speaking part) according to the GLOBE study (2004).
46
Figure 5: The relations between image of the other, self and meta image
62
Figure 6: Brazil’s constructed image associations from early travel letters,
culture shock books and Hollywood movies.
76
Figure 7: Comic Strip: (translation)‘Halt! Who goes there? Friend or foe?’
‘Neither one, I am neutral’. …Another guy from Switzerland.’
83
Figure 8: Fair Trade Labeling Initiatives (shaded in dark green) are the ones that
can license the Fair Trade Certification Mark on products and promote Fair
Trade in their territory. Credit: FLO
101
Figure 9: Self-fulfilling image constructs process in Fair Trade. Source:
Researcher.
113
x
Figure 10: Researched producer groups geographic location in Brazil
122
Figure 11: Amount of qualitative interviews according to interviewee profile. 125
Figure 12: Field work/interview date and location.
126
Figure 13: Image checked relations in the commercial relationship small
Brazilian agricultural producer organizations and their respective Swiss buyers.
Source: Researcher.
131
Figure 14: CooperCaju distribution chain for exports in FT.
136
Figure 15: Valued cultural differences in the way of doing business accessed
during the interviews for Case Study A.
150
Figure 16: Gebana’s distribution chain for soybeans from Brazil.
164
during the interviews for Case Study B.
174
Figure 18: Coagrosol Distribution Chain to Switzerland
184
Figure 19: Michel campaign about Fair Trade and the producers behind the
product. Credit: Michel/Rivella
192
during the interviews for Case Study C
196
List of Tables
Table 1: Cases’ Institutional Set-Up, Producers’ Local Context and Self-Image,
and Constructs of Fair Trade.
210
Table 2: Perceived differences in the way of doing business’ Generic Image of
the Other (Country).
211
xi
Acronyms
ATO
BRA
CH
CLAC
EFAT
ECLAC
FAO
FBES
FCOJ
FLO
FLO-Cert
FT
GMO
ILO
MDA
M-Time
NSF
PAA
PNAE
P-Time
PRONAF
UNICAFES
SEBRAE
SNCJS
WFTO
WTO
Alternative Trading Organization
Brazil
Switzerland
La Coordinadora Latinoamericana y del Caribe de Pequeños
Productores de Comercio Justo (The Latin American &
Caribbean Network of Small Fair Trade Producers)
European Fair Trade Association
Economic Commission for Latin America and the Caribbean
United Nations Food and Agriculture Organization
Forum Brasileiro de Economia Solidaria
Frozen Concentrate Orange Juice
Fairtrade International
Certifying Organization linked to the Fairtrade International
Fair Trade
Genetically Modified Organism
Internacional Labor Organization
Ministério para o Desenvolvimento Agrário (Ministry for
Agricultural Development)
Monochronic Time
New Standards
Framework (from FLO Fairtrade
International)
Programa de Aquisição de Alimentos (Food Acquisition
Program)
Programa Nacional de Alimentação Escolar (National School
Feeding Program)
Polychronic Time
Programa Nacional de Fortalecimento da Agricultura Familiar
União Nacional de Cooperativas da Agricultura Familiar e
Economia Solidaria
Serviço Brasileiro de Apoio as Pequenas e Medias Empresas
(Brazilian Service to Support Small and Mid-Size Companies)
Secretaria Nacional de Comercio Justo e Solidário
World Fair Trade Organization
World Trade Organization
xii
1
Part I – Introduction
How far the will to peace can assert
itself once the interest in peace which
sprang
from
nineteenth-century
economy has ceased to operate, will
depend upon our success in establishing
an international order. (Polanyi, 1957).
There are several image constructs in Fair Trade which have been built up over
the last twenty-three years1 of this socio-economic movement.
Such constructs have been communicated to the final consumer in a way that the
values of justice, the definitions of what “development” stands for, as well as the
images of the producer organizations, their socio-economic condition and
locations, follow a self-fulfilling prophecy in line with an ideal ethical discourse
aiming at calling socially conscious consumers in the North for action.
At the end, it is the producer who needs to follow a set of criteria with around
one hundred twenty (120) must do’s about what fair stands for, from the
perspective of the so called Global North.2
This poses two problems, the first is that such constructs translated into social
certification criteria may not mean much in the producers’ context of norms,
values and life-styles (Goodman, 2004; Bacon 2010; Besky, 2010), the second
one is that the imagined narratives of Fair Trade form a set of preconceived
images of the other have a hold upon the intercultural relation.
1
Considering that the first coordinated effort towards FT was the Max Havelaar foundation
establishment in the Netherlands, in 1988.
2
In the case of FLO-Cert (Certifying Agency of Fair Trade International Organization) these
certification criteria are reviewed by their assigned experts, most of them based in Europe.
2
In this sense, as stated by Goodman (2004, p. 894), “development is influenced
by consumption, marketing and product placement”, and both constructs and the
certification criteria, which determine what is fair or not, interrelate and interact,
constituting and shaping the commercial relationship, in a neo-power-play and
role-relationship where those in the North still hold the most cards.
In Latin America there are approximately 15 million small family-run farms.
Only less than half of them are integrated into the market or make a living from
this activity rather than just subsistence.3
Producing half the population’s daily food supply, these small-holder producers
watch out for the preservation of local bio-diversity, hire the largest number of
agricultural workers and provide wealth benefits to their communities4. Although
they are the key element of the food value chain, they retain the lowest amount
of total revenues (Daviron &Ponte, 2005; Bacon, 2010).
It was in this context and in support of those left out of the global trade system,
and aiming to fight against rural poverty, that several inclusive trade initiatives
started, among them the Fair Trade5 movement in the late 1980s.
Fair Trade began as a social justice cause, a kind of “self protection” movement
to re-regulate and check the effects of a globalized market economy with the
objective of including small producers in global trade of agricultural products
and providing them with the minimum conditions to be able to survive on
income from their own production (Nicholls & Opal, 2005). This is one side of
the distribution chain.
3
IFAD (International Fund for Agricultural Development). Latin America: the state of small-holders
in agriculture (Bedergué and Fuentealba) paper presented at the Conference on New Directions for
Smallholders in Agriculture in January 2011 in Rome.
4
RIMISP – Centro Latinoamericano para el Desarrollo Rural. www.rimisp.org accessed on July 1,
2011 and CEPAL (2003) report by Abramovay et al.
5
Some organizations make a distinction between Fair Trade written all together, which is the socioeconomic movement represented by FLO and its members, and written separated which is overall
Fair Trade non-FLO. Along this study I opted for Fair Trade (separated) for all, except when it is a
proper name. Nevertheless, the analysis of Fair Trade certification criteria is always based on the
FLO and FLO-CERT ones.
3
On the other side, were the socially-conscious consumers who gave preference to
products coming from small-holder farmers and the buyers and product
processors, all following the credo of a fairer, more transparent, inclusive and
long-term trustful commercial relationship.
As more-fairly traded product sales started to move from a niche market to the
mainstream, when they gained a place on the shelves of the large retail chains,
certification labels were necessary.
Such social labels became a sign to final consumers that guarantees that products
were indeed acquired along the lines of a more inclusive trade system, therefore
bringing small producers better commercial conditions, including the opportunity
to participate in international trade (Zadek, Lingayah and Fortstater 1998;
Murphy et al, 2005; Conroy, 2007).
The outcome was a broad assortment of highly competitive social and
environmental certification labels and systems where each of them claims to
have the most complete and balanced selection of social, economic and
environmental criteria.6
The other point related to increasing the offer7 of goods marketed under Fair
Trade principles is that since production is limited by land size and type of
processing (hand-made or small/mid-size processing industry), in order to
guarantee a constant supply level, retailers and distributors start looking for a
diversified portfolio of cooperatives they can buy from. Another movement in
this line is FLO’s decision, for some of the mainstream products, to certify large
plantations as far as these would follow some of the ILO requirements, but this
topic will be further discussed in the chapter about Fair Trade current challenges
(Renard & Pérez-Grovas, 2007; Hutchens, 2009).
6
For reference on the international social and environmental/organic labels and respective
requirements and claims please go to UNCTAD (United Nations Conference for Development) portal
of Sustainability Claims. http://193.194.138.42/en/Sustainability-Claims-Portal/ accessed on June 2,
2011.
7
From 2008 to 2009 FLO certified product sales grew 15% totaling €3.4 billion worldwide.
4
If developing international trade relations between large companies already
includes many more challenges than selling to local markets, this can get even
more complex in the case of companies operating in a Fair Trade system, in
which mid to large sized companies in mature markets search and buy from
small-sized agricultural producer organizations in regions with an economy in
development.
To achieve a guaranteed and trustworthy long-term supply agreement and to
develop new producers in the non-traditional Fair Trade countries, it is
fundamental to understand the perceived image buyers have about producers and
vice-versa, their cultural backgrounds, and how these impact cross-cultural
communications in the trade relationship.
Although this may seem obvious, in practice it is not.
In this study, I looked at the intercultural trade relationships between smallholder family farmers in Brazil and their commercial partners in Switzerland,
both operating in a Fair Trade system.
The objective was to identify and analyze how the culture-bound elements of
image of the other; generic country image; and constructs of fairness unfold and
influence the development – or not – of a long-term and trustful commercial
relationship.
1.1
Research Topic Justification
Intercultural or cross-cultural communication has for long been the subject of
academic studies with classic works which range from nations’ bi-polar
comparative values’ system from authors like, Hofstede (1980;1998),
Trompenaars (2004) and the Globe Study (2004; 2007), which not only have
been for long applied and referred to, but also been exposed to critics due to
their tendency to generalize, and many times create or support an stereotyped
national behavior; to the work of E. T. Hall (1959), also a classic in the
intercultural literature, Sarangi (1994), Bolten (2007; 2009), and many more.
Since interest in this subject has grown with transnational companies
increasingly outsourcing their production activities or opening new international
5
market operations, several books and practical guides on “how to do business
with” or “how to communicate with” have been published (Novinger, 2003;
Moran, Harris and Moran, 2004).
There are also the “culture shock” books and those for travelers and expats,
which tend to be based on personal experiences and past similar reports rather
than to follow any sort of deeper study about different cultures. Most of the time
these books serve much more a source of stereotypes than presenting cultural
aspects from specific regions.
In the area of rural communities’ cultural studies, these are most often related to
the specificities of human and cultural capital (Freidberg, 2003; Flora & Flora,
2008) and several working groups promoting knowledge exchange in this field,
such as the Rural Sociological Society (RSS)8 and the International Rural
Sociology Association (IRSA).9
Fair Trade has been the main research topic of many scholars, analyzing both its
positive or negative impacts on small producer organizations. Such studies range
from an overall view about how it was formed and who the main players are
(Nicholls, Opal, 2005; Raynolds, Murray and Wilkinson, 2007; Bezencon &
Blili, 2009; Lyon & Moberg, 2010), to success stories from ATOs (Alternative
Trading Organizations) (Lamb, 2008).
Studies and books about Fair Trade also show it as a certification system, discuss
the role of the label (Anholt, 2005; Conroy, 2007) or question the effectiveness
of Fair Trade in supporting small farmers in finding their way out of poverty
(Bacon, 2005; Daviron & Ponte, 2005; Barrientos & Dolan, 2006).
However, a gap is revealed when it comes to analyzing the influence of the
intercultural and actors’ image associations in these commercial relationships.
Although there is a representative set of studies about the constructs of Fair
Trade (Freidberg, 2003; Renard, 2003; Goodman, 2004) and the governance
structures that define what is fair (Bacon, 2010) these are not directly related to
8
9
http://ruralsociology.org/, accessed on June 4,2010
http://www.irsa-world.org/, accessed on June 4 ,2010
6
the influence of the pre-conceived images of cross-cultural dialogue. And up to
now, the analysis of fair trade encounters lacks the symbolic dimensions as
consolidated in the form of image constructs, and the role of consumer
expectations and certification agencies in shaping productive practices and
producers’ cultural identities (Dolan, 2010; Wilson, 2010).
At the beginning of 2009, the WTO (World Trade Organization) and ECLAC
(Economic Commission for Latin America and the Caribbean) published a report
about the first outcomes of the Aid for Trade program for the region. It brings up
very interesting and constructive discussions about a needed paradigm shift also
for the aid and cooperation programs in relation to the developing communities
in Latin America.
The report points out the disregard of trade as a development instrument in
beneficiary countries or by donor agencies. It also calls attention to the absence
of internal appropriation of assistance programs by the supported groups and
cites as a possible reason the conflicting agendas of donor agencies and that aid
programs do not necessarily coincide with the objectives and needs of the
targeted groups.
This doctoral was elaborated at a time when the FLO (Fairtrade International)
was re-analyzing its strategy and role, and released a set of revised standards10 in
May 2011. After 20 years of movement, with members mostly in the countries of
the Global North11, now FLO is considering expanding its labeling trademark
license to some of the producer countries.12
For researchers, this study aims at contributing to the intercultural and image
studies in the context of Fair Trade focused on the trade and collaborative
relationships between Brazil and Switzerland.
10
In this study we have focused on the generic criteria for small producers.
Mexico is up to now the only exception, as their Fair Trade organization was invited to become a
FLO member after the development of a country-based certification and labeling system.
12
FLO announced it is considering including Brazil and the ABCJ (Brazilian Association for Fair
Trade) as one of its members. This would allow the local organization to grant the FLO label to
products to be sold in the internal market. http://www.fairtrade.net , accessed on June 1, 2011.
11
7
For practitioners, including buyers and sellers/producers and traders, it aims at
providing evidence of critical behavioral patterns based on the different ways of
doing business and the stereotyped images of each other and how these influence
commercial agreements beforehand. This research brings in as a new element the
“constructs of fairness”, created by the certification criteria and the messages
communicated to final consumers, as a possible source of misunderstanding.
1.2
Research Question
The main research question can be summarized as:
How do the image of the other and the constructs of fairness come into
play and design the commercial relations in a Fair Trade system?
The three perspectives from which I will look at the commercial relationships
are:
The “image of the other” (the buyer in relation to the producer and viceversa) as a means to provide the elements of expected behaviors in the
intercultural communication process to validate cultural behaviors of the
other partner.
The influence of the main Fair Trade image constructs, more specifically
those which indeed differentiate this system from conventional trade: the
fairness construct, marginalized producer, North-South divide and the
minimum price.
Other relevant elements of the intercultural relationship that may arise
during the field work and that facilitate or inhibit the commercial relations
between the two agents.
8
1.3
Methodology
As this study deals with intercultural communication during commercial
relations in a Fair Trade system, with actors who come from nearly opposite
socio-economic realities, where local context, cultural background and exposure
to foreign cultures, languages and situations hold a high influence, a qualitative
research with comparative case studies has been selected as the most appropriate
method.
In social sciences, case-studies have been pointed to as adequate when the
researcher is dealing with human activity and the context, and when the
“individual’s situational self-interpretation” is extremely relevant to the research
objective (della Porta & Keating, 2008).
A model proposed by Lars Fant has also been applied to identify the elements of
the main image of the other and stereotypes as means to confirm that “a value
thought as of characteristic of one culture will correspond to a stereotype shared
by members of a second culture” (Fant, 1997), and is further explained in the
methodological chapter in the session about line of analysis for each case study.
Based on three trade relationships in different distribution chain models, I built
the analysis on the influence of the image of the other and the constructs of
fairness on the way of doing business.
Each research unit of analysis is formed by two organizations – the producer
cooperative and the sales company.
Case study A is formed by an ATO (Alternative Trading Organization) which is
based in Switzerland and buys directly from a small producer cooperative which
does all the logistics by itself. The traded product is cashew-nuts and the
cooperative is located in the northeast of Brazil;
Case study B is formed by an ATO with headquarters in Switzerland and a
regional office in the south of Brazil which buys directly from producers. The
traded product is non-GMO soy-beans;
9
Case study C involves a soft drink company which buys through a Swiss trader.
Although the trader buys from several cooperatives in different areas of Brazil, I
have selected a cooperative which is based in the southwest region. This case
study is in the logistically complex business of cooled juice concentrate, in
which small-holder producers are an exception.
In addition to the case studies, opinion leaders related either to Fair Trade or to
the local cultural context were also interviewed. The selected countries were
Brazil and Switzerland. The main reasons for choosing these two countries is
that in Brazil small producers are still in a start-up phase of joining Fair Trade
and are evaluating the benefits and challenges of exporting their products rather
than focusing on the local market or even developing a South-South trade.
Switzerland is the country with the highest per capita demand for Fair Trade
products. The country was not an imperialistic nation and there are no post/neocolonial relations with Brazil. This brings in an interesting element, since many
of the Fair Trade relationships are somehow linked to former colonial
relationships, except in this case of Switzerland and Brazil.
This study focuses on the critical incidents of the intercultural communications.
Rather than looking at the “what went well” the proposal to evaluate the
situations of misinterpretation is because this is how cultural differences get
manifested during the relationship. As pointed out by Sarangi (1994, p.413): “it
is through the occurrence of miscommunication that cultural differences become
real and take a life of their own […] this leads to ‘an analytic stereotyping’ of
intercultural events.”
During the analysis of the case studies, this focus does not mean that the trade
relationship being analyzed has failed to succeed is rather the opposite: its main
objective is to reinforce the importance of being aware that the differences exist
(and what they are) in order to be able to establish a long term relationship.
A cross-case study analysis was developed in order to evaluate the
commonalities and differences and to build a final proposal of the main
intercultural elements and how these organizations are dealing with them.
10
This study is structured in the following way:
Part I: Introduction
Chapter 1:
Topic justification, research question and summarized methodology
Part II: Theoretical Background
Chapter 2:
Fair Trade System – Going back to the origins & Fair Trade in Brazil
Chapter 3:
The Intercultural Dialogue: Communication Patterns, Time Management,
Image Studies, and Country Hetero-Image
Chapter 4:
Part III: Empirical Research and Case Study Analysis
Chapter 5:
Research Method
Chapter 6:
Case Study Analysis
Chapter 7:
Cross Case Study
Part IV: Implications and Final Considerations
11
Part II – Theoretical background
The Fair Trade movement has emerged as a possible alternative and as a
response to socioeconomic problems due to increasing deregulation of the global
economy. It addresses issues like the pressure to find the lowest cost production
sites in a globalized economy as multinational corporations seek outsourcing
opportunities for cheaper products and assembly in different countries, retaining
strong purchasing power over small-and medium-size producers; the lack of
awareness by small producers on routes to possible international buyers; or the
protectionist trade policies between countries (Murray, Raynolds and Taylor,
2003; Oxfam, 2002b;2005; Nichols & Opal, 2005; Raynolds & Long, 2007;
Lamb, 2008).
It provides small agricultural and handy-crafts producers from regions with indevelopment economies with the opportunity to sell directly to stable and
developed consumer markets in a more transparent and shorter distribution
chain, where better prices for the commodities are paid, and producers can
receive a higher return, including a social premium to be, a priori, invested in the
community.
In a Fair Trade system, the commercial relations are not only transnational but
also strongly transcultural, involving people with very different contexts, lifestyles, access to information, language, values and even “institutional protection
against risk” (Freidberg, 2003; Jaffee, 2007). In it, the different image of the
other shapes both the communication about these products to the final consumer
as well as the expectations on the way of doing business.
During these encounters, the different cultural values and stereotypes, which may
come either from the pre-conceived image of the other or from the products’
messages communicated to the final consumer, will shape the expectations on
the way of doing business.
The scope of this study is neither to go through all the elements of the Brazilian
and the Swiss cultural values and the way of doing business, nor all the
perceived hetero image elements of these two nations.
12
The purpose of this study is to build a framework with the intercultural elements,
communications patterns and the influence of hetero-images which have to do
the most with agricultural producers from Brazil and Swiss buyers during their
commercial relationship in a Fair Trade business.
2.
The Fair Trade Movement – Back to the Origins
According to the World Fair Trade Organization (WFTO), it all began in the
United States when Ten Thousand Villages started buying handicrafts from
Puerto Rico. Other authors like Sichar &Cabrera (2002) and Conroy (2007)
indicate that Fair Trade originated in the United Kingdom in the 50’s when
Oxfam initiated a process of selling artisanal products made by Chinese refugees.
The largest amount of literature, however refers to a start in the early 1970’s,
when this social-economic movement was initiated through different efforts,
which were strongly motivated by solidarity and, in general, coordinated by
religious and politically motivated groups, aiming at promoting the direct sales in
Europe of products coming from small producers from developing countries
(Tallontire, 2006; Raynolds, Murray and Wilkinsom, 2007; Lamb, 2008).
According to FLO, the origins of Fair Trade go back to 1988 when the Max
Havelaar brand was created.
Brot fuer Alle, Ten Thousand Villages, the priest VanderHoff and the Mexican
coffee cooperative UCIRI (Union of Indigenous Communities of the Isthmus)
which afterwards became Max Havelaar, and Oxfam and Gebana are some of
these pioneering groups (Bacon, 2010).
Until the 1980’s, products were sold in world shops mostly through ATOs
(Alternative Trading Organizations) like GEPA, Claro Fair Trade, Twin Trading,
and Oxfam, among others. These alternative trade networks, due to their niche
market nature, moved small volumes. At the beginning there was also an issue
related to Fair Trade products quality, as the overall perception was that due to
the “simpler” production process or investment in quality control and final
product taste, that these were of a “different” and in general “lower quality” as a
13
similar conventional product. This was specially the case for coffee and cocoa
(Bacon, 2010).
The first Fair Trade label, Max Havelaar, was launched in 1988 as a joint
initiative of UCIRI and Solidaridad for the commercialization of coffee from
small producers from Oaxaca, Mexico. The aim was to guarantee that the
product sold under that brand followed an inclusive trade process in line with a
set of socio-economic-environmental standard procedures, as well as to assure
product traceability (Zadek, Lingayah and Fortstater, 1998; Conroy, 2007).
In the 1990’s, Max Havelaar extended its activities to other markets in Europe
and in the USA, with different representation organizations per country, such as
Max Havelaar (in Belgium, Switzerland, Denmark, Norway and France) and
Transfair (in Germany, Austria, Luxemburg, Italy, the USA, Canada and Japan).
Aiming at aligning standards, and in order to put together certification
procedures and the resources required for marketing initiatives, these groups
jointly formed FLO (Fair Trade Labeling Organization which was afterwards
rebranded Fairtrade International), legally established in 1997 (Bacon, 2010).
Among the social labels, at the moment, the FLO seal has got the highest brand
awareness in the minds of ethical products final consumers (Ransom, 2001;
Nicholls and Opal, 2005; FLO Annual Report 2009/2010).
Soon after, Oxfam together with Tradecraft, Christian Aid, New Consumer, the
World Development Movement and CAFOD, established the UK based Fair
Trade Foundation.
For the purpose of this research I will take the concept of Fair Trade as defined
by WFTO (World Fair Trade Organization)13:
“Fair Trade is about better prices, decent working conditions, local
sustainability, and fair terms of trade for farmers and workers in the developing
world. By requiring companies to pay sustainable prices (which must never fall
lower than the market price), Fair Trade addresses the injustices of conventional
trade, which traditionally discriminates against the poorest, weakest producers.
13
http://www.fairtrade.org.uk accessed on June 29, 2011.
14
It enables them to improve their position and have more control over their
lives.”
Fair Trade can be defined by a set of key practices which go from establishing a
distribution channel with fewer intermediaries, to better payment to producers
and longer term contracts.14
The Fair Trade movement was one of the precursors of inclusive and ethical
trade. It started by looking for ways to better distribute value along the chain
from producer to consumer, and to promote socio-economic development by
giving the groups which were left out of global trade an opportunity to get
organized and to have equal conditions of reaching international markets. In its
early phases, it was working on opposing the deregulation promoted by
neoliberal policies (Moberg & Lyon, 2010).
Besides, initiatives have been led by large corporations, originating in the
concerns they had about the development of the communities where their plants
are located, or by pressure from the public opinion, local government, consumer
boycotts and even as part of a strategy towards becoming an employer of choice.
Along these lines, examples include the Global Exchange boycott campaign
against Starbucks in the year 2000, due to the high gap between the final price of
their coffee at bars, about $10 and $12 per pound of whole coffee, in relation to
how much they paid to coffee producers, which was $0.30 to 0.50 per pound of
beans (Global Exchange, 2000)15.
Another example is the 2011 campaign coordinated by the Swiss NGO Solidar
which challenged George Clooney, as he is an UN ambassador, for being the
face of the Nespresso coffee advertising campaign, because despite this
product’s high price to consumer, the coffee beans are not fairly acquired.
Solidar’s claim is summarized as an email message to the actor, which can be
sent by everyone supporting the same idea. They state16: “Dear George [...] you
14
For the WFTO ten commandments of Fair Trade, please refer to Annex 3.
http://www.globalexchange.org/fairtrade/coffee/starbucks accessed on December 2, 2011.
16
http://www.solidar.ch/ accessed on September 2, 2011.
15
15
campaign as a UN ambassador as well as a champion of peace and justice. That
is truly fantastic. But promoting a company that does nothing to stop the
exploitation of coffee pickers is really not right. I would therefore like to ask you
to make Nestlé choose: either fair trade coffee or no more George Clooney in the
Nespresso commercials.”
Examples of socio-economic development programs at large corporations
include: companies which are decentralizing procurement strategies in order to
buy locally; organizations that are proposing better shared value along the
chains, including the promotion of synergies between sectors; or even a group of
CEOs who get together to jointly develop and support social development
programs, optimizing resources, allocating highly professional people into the
selected projects and by making their political power available to influence
governmental policy (Tuil, 2009; IAF – Inter-American Foundation and the
RedEAmerica Brasil, 2011).
The difference between these corporate programs and Fair Trade is that in
general, privately-owned large enterprises will tend to favor the target groups in
the communities where they are based, and, in many cases, the social programs
are initiated by the company in a top-down approach.
There are some best practices in the privately-owned foundations, such as those
from the Schmidheiny family – Avina and the Max Schmidheiny-Stiftung
(Foundation); or the Ford Foundation, which have formed organizations for
supporting socio-economic-environmental programs independently from their
companies’ main business lines.
In Fair Trade, the participation process can be initiated by producer groups, no
matter where they are located and if they can build local partnerships with large
corporations although many times the certification process is started by an
international buyer a social entrepreneur or FLO consultants in the field.
However, Fair Trade may not be the most suitable solution for all the small
producers in the South which the movement proposes to support. Through its
certification criteria and governance structures, producers and organizations in
the South still do not have the same level of opinion giving as their “expert”
16
consultants or the certified buyers. The criteria can also be seen as a top-down
approach as they are defined by FLO experts and follow a European socioeconomic-environmental development model (Bacon, 2010).
For those producer organizations that agree to and succeed in accessing and
complying with the certification criteria, being part of Fair Trade provides them
with “shaped advantage” which facilitates their entrance in an international trade
system (Moberg & Lyon, 2010) and a set of organizational improvements in
order to gain access to markets and to financing lines.
Some of these promoted changes include (Raynolds, Murray and Wilkinson,
2007):
a. get organized in a democratic and structured organization (cooperatives) to be
able to manage production and export;
b. have access to a prospective customer in developed economies in the North
and in Asia and to be part of a producers’ database which is made available to
certified buyers;
c. more easily access to micro-credit from national or international financing
institutions;
d. going though the certification also provides some reputational attributes
which is necessary for trust-based relationships;
e. it ‘imposes’ technical improvements and training to qualify people and
products to meet the quality requirements from international consumer
markets;
f. there is a minimum price which is a reference either for those that do not have
access to international market information, or a means to guaranteeing against
price fluctuations.
17
There is a downside as well, as Fair Trade is an “artificial” system to overcome
economic distortions:
a. The cooperative may stick to its single fair trade trading/buyer customer,
since this customer may buy all the production at a reasonable price and
therefore it “guarantees a safe situation”;
b. The pre-payment for production creates a closed cycle – the producer
cooperative receives the resources to pre-pay harvesting costs and this
amount is paid back by the time a final sale is completed. This may prevent
cooperatives from looking for other sources of financing for capitalization or
investment in new technologies or product development;
c. The fair trade consumer base may diminish over time due to economic or
image crises.
The growth of Fair Trade started as a push strategy promoted first by the
Alternative Trading Organizations (ATOs) which have defined a new business
model through setting a closer link between producer cooperatives and consumer
markets whether through direct retailing or by selling to processing industries or
retailers17 and by partially breaking the traditional market power of large retailers
and forming a community of loyal Fair Trade product consumers.
Final consumer information and awareness about Fair Trade is a result of these
same ATOs educational efforts. Their physical stores provide the means for a
final consumer experience with the fairly produced and traded food products and
handicrafts (Nicholls & Opal, 2005) and strongly supported to process of giving
visibility for the cause and the supported people and products.
As consumer awareness and preference for Fair Trade products started to grow,
and as part of an effort to take these products from niche market to mainstream,
some large retail chains like Monoprix, Tesco, Migros, Carrefour and WalMart
started selling these products and promoted them to a larger consumer base.
They have also developed their own FT product brands.
17
As Fair Trade products go mainstream by becoming available on the shelves of big retailer chains,
often under their private labels, some ATOs are facing lower revenues and financial results.
18
There are though many different views on the real benefits this move to
mainstream has brought to the Fair Trade system (Bezencon & Blili, 2009).
Several organizations work on the promotion and to guarantee that the Fair Trade
practices are being followed and implemented and are represented in the table
below. Some of them have a more institutional and advocacy role while others
are focused on the market and certification systems.
Organization
Main Activity
Mission
WFTO – World Fair
Trade
Organization
(originally IFAT)
To enable small producers to
improve their livelihoods and
communities
through
sustainable Fair Trade. WFTO
does this by delivering market
access
through
policy,
advocacy,
campaigning,
marketing and monitoring.
To enable producers to
improve their livelihoods
and communities through
Fair Trade. WFTO will be
a global network and
advocate for Fair Trade,
ensuring that producer
voices are heard. The
interests of producers,
especially small farmers
and artisans, should be the
main focus of all the
policies,
governance,
structures and decision
making within the WFTO
www.wfto.com
The global office is located in
the Netherlands, with regional
offices in Africa, Asia, Latin
America, Europe, the Pacific.
FLO is a not-for-profit
organization. It is the umbrella
for 19 national labeling
organizations in Europe and
USA and includes 3 producers’
representations from Asia,
Latin America and Africa and
two associate members. They
set the FT criteria/standards
and coordinate the global
strategy.
To connect disadvantaged
producers and consumers,
promote fairer trading
conditions and empower
producers
to
combat
poverty, strengthen their
position and take more
control over their lives.
EFTA – European Fair
Trade Association
European Observatory on Fair
Trade Public Procurement
www.eftafairtrade.org/
Formed by eleven FT importers
in nine EU countries.
To support and encourage
its member organizations
in their work It facilitates
exchange of information
and
networking,
and
indentifies and develops
joint projects.
FLO – Fairtrade
International
www.fairtrade.net
Head-office s in Bonn.
Netherlands (Head
office) and Belgium
(Advocacy Office)
19
Organization
Main Activity
Mission
CLAC
–
La
Coordinadora
Latinoamericana y del
Caribe de Pequeños
Productores
de
Comercio Justo
CLAC is the voice of small
producers from Latin America
and the Caribbean.
To represent grass roots
organizations
of
democratically organized
smallholder producers. It
aims at the strengthening
and development of these
grassroots organizations,
inside the Fair Trade
system.
The main office is established
in El Salvador. Formed by 300
organizations
of
small
producers in 21 Latin American
and the Caribbean Countries.
In 2004, due to governance issues, the FLO group for advocacy and setting the
standards, separated from the group responsible for the certification. The
certification company was named FLO-Cert and as stated in their webpage18:
“provides inspection and certifies producer organizations and audits traders.”
One of most cited and discussed topics by both producer groups and buyers is the
Fair Trade minimum price, which was institutionalized by FLO and should cover
the costs of production19and provide for family members and farm
improvements. If international commodity prices fall below the FLO minimum
price list, Fair Trade importers pay the pre-defined price set by FLO. If
international commodity prices go higher, then market price is/should be paid,
according to a one-by-one negotiation.
In the next chapter, we bring up the main challenges for Fair Trade, including
discussions about the role of the minimum price in face of a growing global food
supply crisis.
After and many times in parallel to FLO, other social and environmental
guaranteeing systems, auditors and labels came on the scene, such as the
Rainforest Alliance, UTZ, IMO Control, IBD/Demeter for biodynamic
production, or even participative certification schemes being implemented by
some groups of products and organizations in Brazil, among others.
18
19
www.fairtrade.net accessed on July 12, 2011.
FLO defines the average cost of production for all countries exporting Fair Trade products.
20
2.1
Distribution Chain in a Fair Trade System
The most common value chain is the one shown in Figure 1. What varies is its
governance and the number of intermediaries. Some authors, like Reed (2009)
and Bacon (2010), have identified three main types of FT value chains,
according to the relationships among actors.
At one end, there is the solidarity economy, which aims at and values
deliberative decision making, mutual accountability and income distribution.
There is little to no involvement of corporate partners. Sellers are an extended
arm of producers in the consumer markets, and producers tend to focus on local
rather than international markets.
At the other end, there is a market-driven one characterized by a “relational
form” of governance in which sales partners, mostly from larger retailers and
industries, influence FLO member organizations decision making towards
outsourcing groups including exceptional certification rules to guarantee market
demand will be met.
In the middle, there is a hybrid model, which will vary according to product’s
higher or lower added value, the need for industrialization, how producers
groups are organized among each other (second level cooperatives or politically
strong national producer organizations), and final consumer shopping habits.
Figure 1 also shows an example of a FT product final price to consumer in a
French shop and distributes added value backwards until it reaches the producer.
The reality is that, even in Fair Trade, the actor in the chain which holds the
highest value surplus is the retailer, especially when they have their own private
labels (20 Minutes Newspaper French Edition, no. 1592 published on March 31,
2009).
21
Traditional Fair Trade Products Distribution Chain
Export/
Import
Logistics
Producer
Organization
EU 0.21
EU 0.06
Processor
Manufacturer
EU 0.41
Distributor
/FT Product
developer
EU 0.72
Retailer
EU 0.64
1.7%
2.8%
EU 2.19
EU 0.11 (taxes)
EU 0,038 (FT Premium)
9.6%
Consumer
18.7%
32.8%
29.2%
5%
Private Label
Financial value distribution for one chocolate bar sold in a retail shop in Europe.
Figure 1: Fair Trade product distribution chain (Source: Transfair, 2009) and
Price breakdown for a 100g Fair Trade Chocolate Noir on a supermarket shelf
(Source: 20 Minutes Paris, no. 1592 published on March 31, 2009)
2.2
Challenges Facing Fair Trade as an Alternative Socio-Economic
Movement
A commonly indicated root cause for the challenges and criticisms referring to
Fair Trade comes from the move from niche to mainstream market. Indeed this
has a large impact in terms of power play in the value chain as well as on new
institutional arrangements.
Nevertheless, another source of colliding elements has to do with the fact Fair
Trade criteria still follows and imposes a Eurocentric point of view on what
complies or not in terms of moral values socio-economic-environmental
development beliefs, and business model, where roles are pre-defined by
governance structures and supported by the image constructs around the main
stakeholders in this trade system.
This second set of elements has a higher effect on the trust in the relationships
between producers, certifiers and buyers, and is the key focus of this study.
22
There is a contradiction when the set of criteria “suggests” a management model
which, if the cooperative is indeed formed by small producers and coordinated
by a multi-task working team (producer members that at the same time
coordinate the job in their farms and in the cooperative), it will be either difficult
to be implemented, or it will be costly or make no sense to the local values and
priorities or all of these elements will apply. An example includes the newly
added core requirement that the producer organization must perform a risk
analysis in year one, to be repeated every three years.
Going back to the niche/mainstream move, it resulted in the separation of the
groups that still praise Fair Trade as socio-economic movement from those who
are market driven (Tallontire, 2001; Raynolds & Long, 2007; Barrientos &
Smith, 2007), a process which involves issues of power, privilege and democracy
(Jaffee, 2007).
Independently from the discussions about FT going mainstream, the fact is that
this move has already happened, as shown by the total sales of FLO Certified
products totaling €4.36 billion worldwide and a growth of 27% from 2009 to
201020, even in times of economic crisis in the consumer markets.
The main dilemma is how to grow markets and at the same time maintain the
“alternative trade” status. This is what Renard (2003, p.91) calls: “a compromise
between civic and market coordination.”
In terms of the new institutional arrangements, from the market side, accessing a
broader consumer base involved working with larger retail chains, fast food
shops, coffee bars, and transnational corporations, among others, granting them
the right to use the FLO label and allowing them to develop their own FT private
product brands.
This move, a priori, gives back purchasing power to the large traditional
retailers, which due to the nature of their business, already enjoy other
20
2010 Financials and Global Sales Figures. Available at http://www.fairtrade.net accessed on
January 25, 2012.
23
advantages such as economies of scale, private labels for the chain’s Fair Trade
products and wider distribution (Tallontire, 2001; 2009; Nicholls & Opal, 2005).
It is a rebounding situation where the growing FT products demand calls the
attention of large corporations, initially opposed by the movement, which look
into applying for the certification and developing their own ethical product lines.
At the same time, the growing market pressure lead the organizations promoting
FT to look into options to rapidly increase certified product offer, following the
expected quality and delivery time by the international buyers.
From the producer outsourcing standpoint, the option would be to either search
out new small producer organizations to be certified, which in general is a
lengthy process, or to grant the certification label to larger producer
organizations which are “ethically run” as long as they are in line with a “fair”
working standard and in compliance with the ILO criteria (Moberg & Lyon,
2010). This second option has been selected and implemented for some products.
There were very intense discussions between the Fair Trade member
organizations which are more social development aligned and those which are
more market and large corporation oriented.
At the 2005 Fair Trade Futures Conference in Chicago, the discussions held
about FLO members’ position in granting the certification label to large
transnational companies resulted in on several groups’ decision to discontinue
their association to Transfair and to set a new Fair Trade certifying agency
(Moberg & Lyon, 2010).
Another example is the movement initiated by the Organic Consumers’
Association (OCA) which, together with other Alternative Trade Organizations
requested that Transfair would not rebrand itself into Fair Trade USA.21
The OCA and other ATOs in the USA tried to avoid that Transfair would be
granted ownership rights for the Fair Trade trademark in the USA. First because
this would give them the brand rights, and second, they do not want the entire
Fair Trade movement to be associated to Transfair, as there is criticism in
21
http://www.foodfirst.org/en/node/3251
24
relation to their mainstream market orientation and the fact they grant the FLO
Fair Trade label to large industries for product brands that contain only a
minimum of two per cent fairly traded ingredients.
In September 2011, Fair Trade USA announced they were ending their
membership to Fairtrade International (FLO)22to follow their own beliefs about
how to bring greater impact to farmers communities in a movement they have
named Fair for All – an innovation strategy.23
This decision directly impacts the intended “better together on a global basis
move” as well as the FLO label brand value, especially due to the size and
importance of USA as a consumer market, and shows that the different views
about certification criteria and market approach start getting to the point of
groups pursuing different and independent approaches.
Among other points discussed, there was the decision that large transnational
roasters would just need 5% of their coffee beans to be acquired in a fairly traded
system in order to be granted the FLO label on their product package. The other
95% is conventionally traded coffee.
The main challenges being faced by both the market-oriented and the socioeconomic development streams of the Fair Trade movement are described in the
next sub-chapters.
2.2.1
Credibility and Transparency
In terms of transparency, as the distance (and anonymity) between consumer and
producer is still very large, the certification label is a convention that guarantees
that the alternative fairer supply chain is governed by and aware of the same
kinds of legal and ethical codes as oneself, and that behind it there is a process
and the legal-bureaucratic institutions that share more or less the same idea about
what should be a “fair behavior” in the distribution chain (Freidberg, 2003).
22
23
http://www.fairtrade.net/single_view1.0.html?&cHash=4793abaa42&tx_ttnews[tt_news]=237
www.fairforall.com accessed on October 4, 2011.
25
This is the reason why the social and environmental labels became necessary as
fair and organic products went mainstream (Daviron & Ponte, 2005), even
though ethical codes of conduct are highly sensitive, and this applies directly to
the rules of the game defined in the form of a set of certification criteria, as we
will further explain and go through in the chapter about the construct of fairness.
Once the certification labels achieve final consumer awareness with associated
positive attributes, they become a symbol which guarantees that the product was
indeed acquired from small producers and follows the concept of a fairer trade,
whatever the brand/label/movement associations in the mind of the final
consumers (Keller, 1998; Conroy, 2007; Grueninger & Teuscher, 2009).
In order to maintain high awareness and positive reputation, the organizations
that manage these labels must make sure the certified products represent
consumers’ preferences and concerns, and to add these to their respective
certification and auditing process. Curiously enough, in the competitive
environment of social/environmental labels, their unique selling proposition is
basically based on how “complete” and “balanced” their criteria are in terms of
social, environmental and economic aspects.24
One example is the addition of environmental elements to FLO-Cert criteria, as a
response to concerns about food security, which has become a buzz-word, and
the need for traceability as final consumer trust in food hygiene declined after the
bird flu, mad cow, and the recent image crisis involving cucumbers in
Germany25. The addition of environmental criteria is an attempt to exclude the
need for another bio label, coming from another certifying agency, for the same
product.
The social and environmental labels also work as a sort of corporate image
insurance, since a neutral and reliable third party is accountable for guaranteeing
24
For more information on the strengths and weaknesses of the certification labels, please refer to the
analysis performed by Ikeda de Oliveira & Wehrmann (2008).
25
Cucumbers were regarded as the main cause for E.Coli infection in a group of people in Germany.
Afterwards it was proven that this product was not the main cause, but by then the image crisis had
already started and affected entire agricultural communities from Spain (News available from The
New York Times, online edition of June 23, 2011).
26
that the FT standards are indeed being followed (Conroy, 2007). From a brand
perspective, retailers borrow the positive attributes and good reputation from
these certification seals in order to avoid green-washing accusations by
consumers, civil society and watch-dog organizations.
Some cases though have shown that applying for the label can have the reverse
effect on product and corporate reputation, as it was the case with Nestlé’s Fair
Trade Kit-Kat. After the product was granted the FLO label, an image crisis was
precipitated as socially-conscious consumers’ started a boycott26action. This
movement also affected FLO’s credibility with small producers that started
questioning who they supported – small-holder organizations or large
international corporations.
Another challenging element to the credibility of Fair Trade as an inclusive
system for small producers was the allowance that larger commercial farms can
also get Fair Trade certified, if they guarantee their employees better social
conditions and labor rights in line with the ILO definitions.
Several ATOs were against this move once it gives back power to the
agribusiness sector and, again, exclude small producers from the system, once
the large plantations have a more competitive cost structure and can offer better
commercial conditions (Dolan, 2010).
The result is that small producers became suspicious. For them, these changes
sounded like losing the movement’s original link in the defense of small
producers, as now they provide the label, which is a strong differentiator
attribute, to companies which at first were seen as responsible for the uneven
global trade strategies (Wilkinson & Mascarenhas, 2007; Bacon, 2010).
There are different aspects and stakeholders involved with the transparency of
Fair Trade. The first one relates to the distance between producers and final
consumers.
26
http://www.nestlecritics.org accessed on September 16, 2011.
27
Consumers wish to reestablish the link with those who produce the food they eat.
This is translated into a shorter communication chain where it is possible to track
the community and their life style through pictures, story-telling reports, farmers’
testimonials and videos (Goodman, 2004; Freidberg, 2003). Goodman (2004,
p.903) acknowledges that:
“Providing re-worked knowledge through product label text and activist
discourses is indispensable to the creation of fair trade networks. Connections
are made visible, and thus made real for consumers.”
After all and up to now this shorter communication channel is basically one way,
from producers to consumers. In this sense, and linked to the lack of access to
market information, many producers are still unaware of final consumer
preference and shelf price.
Dialogue between groups of producers and buyers is also a challenge. Although
there are the traditional trade fairs when both sides could meet, when it comes to
the conferences, there is clearly a division between the forum for producers and
the ones for buyers and certifiers.
This links to our study’s focus, which is the better understanding and awareness
of the intercultural aspects and the associated image of the other related to both
cultures and the imagined constructs of Fair Trade; and how these elements
impact the commercial relationship, especially if buyers would like to indeed buy
from small to medium-sized cooperatives, which seems to be the case since there
is a need to look for new suppliers to meet a growing demand.
Although transparency is a core Fair Trade value, and producer organizations are
required to open their financials, costs structure, management and quality control
processes during the audit, the same does not apply in their case of FLO-Cert.
They do not publish an annual report under the claim this is not legally required
as they are a limited company.27 28
27
The only available financial report from FLO-Cert is the one every company in Germany is obliged
to inform the Government and which gets published in the website www.ebundesanzeiger.de
28
http://www.fairtrade.net/facts_and_figures.0.html accessed on July 7, 2011. The researcher tried to
communicate with FLO-Cert through their official channel, a fill-in form in their website, requesting
28
FLO, on the other hand, publishes its annual report including figures which are
not fully externally audited (in conventional trade this is a must), but with an
unqualified opinion by Deloitte. The financial results are not available in the
2011 report, and their explanation is that they did not have the necessary
information from member associations on time to be consolidated for the annual
report, but they would include it until the end of the respective current year29.
The process for revising standards is opaque. Committees on standards are
formed by internal experts, external consultants and occasionally, representatives
of producer groups.
Producer organizations, when involved, are for reporting what has been going on
in the field or for minimum price definition, when one producer organization
represents all others from their country of origin. In the end, decisions are taken
by FLO’s standards committee and board of directors (Bacon, 2010).
any sort of financial information about their activities. After not receiving any feedback for three
weeks, I sent an email to FLO’s communication officer, explaining my frustration based on the lack
of feedback from their FLO-Cert colleagues. Finally this request resulted positive.
29
FLO financial results were published on 24th Nov. 2011, six months after the Annual Report. For
reference: http://www.fairtrade.net/single_view1+M55e3d11ac51.html accessed on December 2,
2011.
29
2.2.2 The Fair Trade Minimum Price in a Global Food Supply Crisis
The minimum fair price is one of the main and most cited differentials of Fair
Trade, compared to conventional or other inclusive trade initiatives, since it
establishes that producers must be paid an amount that covers their production
costs and, at the same time, provides them and their families a decent standard of
living (Raynolds & Wilkinson, 2007; Reinecke, 2010).
The price negotiation is the “location” where the intercultural contact takes place
and where the predicaments of Fair Trade become real. The reason is that
whenever the market price is higher than the minimum, the final price to be paid
is the result of a “independent” negotiation based on official market price, both
sides – sellers and buyers – perceptions and interests, and above all, where the
for-long established image of the other and a role play take shape.
The FLO minimum price list was created almost in parallel with the extinction of
the ICA (International Coffee Agreement) and the resulting price drops, and it
aimed at guaranteeing small producers’ survival during those times.
Nevertheless, from 1988to 2008, the minimum price for coffee lost 41 percent of
its real value and a review was strongly requested by CLAC, with the support of
an external consultant and a study which showed the historic coffee market price
in relation to the FLO minimum (Bacon, 2010).
On top of it, there is currently an ongoing food crisis and according to Mr.
Graziano, FAO (UN Food and Agricultural Organization), newly-elected
president, during an interview to the online edition of the Financial Times
newspaper (June, 2001): “high prices will remain not just for a few years; this is
not only a temporary imbalance”30. FAO’s annual food price index31 jumped
from 185 in 2010 to 233 in 2011.
30
Interview with Jose Graziano da Silva. Published at The Financial Times online on June 28, 2011.
The FAO Food Price Index consists of the average of 5 commodity group price indices – meat,
dairy, cereals, oils and sugar - weighted with the average export shares of each of the groups for
2002-2004: in total 55 commodity quotations are considered by FAO commodity specialists as
representing the international prices of the food commodities.
31
30
In this sense it will probably be a hard task to FLO to keep an updated minimum
price list. Some of these reference prices are outdated as the process for defining
and reviewing them is slow. It starts by checking local production costs from
different countries and locations. Then it has to undergo an internal approval
process, which involves many instances with several levels and stakeholders
with “dissimilar interests” (Bacon, 2010).
At the time of this study, Brazil was experiencing the joint effect of an overvalued local currency with a higher internal demand and costs of production.
This makes exports very unattractive, as producers can get almost the same price
in the local market as in the external one, in which prices are set in dollars in a
free-floating exchange rate.
By selling domestically, producers do not have to go through the tough process
of exporting and its several downsides related to the Brazilian export tax
framework and poor/non-integrated logistics.
In the agricultural business, due to its price history of high peaks and deep lows,
producers will tend to think short term, and sell their products for as much as
they can at the current time of negotiation, independently of any sort of preagreement.
2.2.3 The Governance of Fair Trade Certification Definitions
For trade to be fairer, Fair Trade should include a governance process with more
involvement of the southern civil society, grassroots development stakeholders
and the consideration of consumer interests (Tallontire, 2009; Bacon, 2010)
which includes reducing the distance between producer and consumer. This last
point has been achieved by some commercial partners and ATOs as they started
to include information about the cooperative they buy from with explanatory
videos and geographic indication.
However, there are three other actors that should be put together, and these are
the producers, and the Fair Trade Organizations and the Certifying Agencies. By
doing so, they would jointly define the criteria as well as the next steps towards
31
becoming mainstream versus keeping the original main socioeconomic
objectives and to become a multi-stakeholder platform.
For the minimum price and standards review committees, it is difficult to define
how many representatives from each side should attend the meetings;
nevertheless the current balance seems not to offer enough voting seats to cover
the amount of producers and their organizations.
Figures show that there are 827 FT/FLO certified producer organizations in 58
producing countries totaling 1.2 million farmers and workers who are all
represented by 3producer organizations, one by region – Africa, Asia and Latin
America and the Caribbean32, which are then full FLO members.33
On the other side, there are 19 labeling organizations, 3 associate members:
Comercio Justo Mexico (Fair Trade Mexico) and the Marketing Company in
South Africa and the newly joined Korea.
There are some online channels through which civil society or producer
organizations can send comments, requests or even place complaints against Fair
Trade standards, including a chart with the different levels of internal reviewers
for such requests. After four or five steps and interfaces, the complaint will be
considered valid and then presented for consideration of the Standard Unit (SOP
Development of Fair Trade standards, Jan.2011).
For the New Standards Framework (NSF) definition, FLO could move one step
up in including producer organizations and civil society, by holding consultation
workshops in the three continents where producers groups are, even if only
aiming at collecting feedback and input for the Strategy and Policy Unit work
(FLO Annual Report 2010-2011).
The NSF is supposed to be a response to the several critics in relation to the
complexity of the criteria to acquire and keep the certification. In it, standards
32
As an example, Latin America & the Caribbean 21 countries are represented by one single
organization which is the CLAC.
33
www.fairtrade.net, accessed on September 18, 2011.
32
have been grouped into four main sections: Production, Trade, Business &
Development and General Requirements.
The NSF includes an expectation towards progress, and there are two categories
of standards: core and development. For the second one, producers are free to
decide when and how they will implement them, although there are references to
a time frame for their achievement.
There are though many must do’s in these new standards34 which include 77 core
criteria elements producer organizations have to comply with at the moment of
the audit, plus another 43 development standards, and in addition there are the
product specific criteria. The question that remains in the case of all auditing
systems is “who audits the auditor”?
Fairtrade International, as well as other certifying bodies like FSC, SAI,
Rainforest Alliance and UTZ, is a member of ISEAL Alliance, a global
association for social and environmental standards which promote members’
peer-review and defines a code of good practice for setting social and
environmental standards.35 In terms of activities reporting, although FLO follows
several UN criteria, they still do not apply the GRI (Global Reporting Initiative)
for their annual reports, what results in lack of relevant figures about their
members’ annual actions and results.
2.2.4 Promoting a South-South Trade
At the moment there is a trend toward geographic change in the trade and
development routes, moving from the North /South into the South/South. There
is a higher market demand in the developing economies, based on an increasing
purchase power at the lower levels of the economic pyramid and the respective
ascension to higher total family income. In this scenario, it is the case that the
34
Generic Fairtrade Standard for Small Producer Organizations, version 01.05.2001 available at
www.fairtrade.net
35
http://www.isealalliance.org accessed on October 5, 2011.
33
domestic market pays the same price as the international buyers in FT, without
the cost of exporting.36
This poses two challenges: the first is that small producers and their cooperatives
should be careful not to fall into the hands of the large traditional industries that
buy in the “street market” or to concentrate all sales to domestic market, by
thinking short-term and giving up the trade relationship with international
buyers. The second is that FT buyers should be aware of the need to follow
higher international prices and recognize that sometimes the domestic market
will be more attractive to producers.
The middle class purchase power growth and, mainly, the increasing awareness
about organic food show that there would be a consumer market for Fair Trade
products in the South, too.
Still in line with the discussions of promoting a South-South trade, in 2001
Mexico launched its own national Fair Trade association called Comercio Justo
Mexico, which grants licenses for coffee to be sold under this brand and aims at
promoting the domestic market and has thus become the first “southern” country
to join FLO, although it does not have full membership rights (Renard & PérezGrovas, 2007).
The main reasons why they do not have full membership are: they would like to
keep their certification system and standards as they believe the FLO ones are
too complicated and universalist and, that these should meet the specific needs of
each country; Comercio Justo Mexico is not in favor of certifying large
plantations or industries; and they would like to keep their own auditing
company, Certimex, as the domestic market do not allow high premium prices,
and would not cover FLO-Cert costs (Renard & Pérez-Grovas, 2007). And FLO,
on the other side, does not feel comfortable in flexibilizing standards and in
including a national initiative which is based in a producers’ country.
There is a marketing organization in South Africa that sells Fair Trade/FLO
certified products, and in March 2011 FLO announced that it is considering
36
One example is the case of the roasted cashew-nuts price at the domestic market in Brazil. This will
be further described in the case study chapter.
34
empowering a Brazilian Fair Trade organization and preparing them to be able to
grant the FLO label to products to be sold in the local market.
In chapter four, I will be discussing the constructs of the North-South divide
which is per se a barrier to the inclusion of a South-South trade route.
2.3
Fair Trade in Brazil
When I think about Brazil the first
image that comes to my mind is the
one of big coffee plantations. When I
think about Fair Trade coffee, I don’t
associate it to Brazil, though.
(Commercial manager working for a
Swiss ATO, Jan.2009)
In Brazil, the agricultural sector accounts for 5.2 percent of the total GDP and is
responsible for 21 percent of total employment. Principal exports are
commodities, mainly transportation equipment and parts (fourteen per cent),
metal goods (eleven per cent) and soybeans (eight per cent).37
Even though Brazil is the world’s largest exporter of coffee, soybeans, red meat
and sugar cane, in contrast to other countries in Latin America, the majority of
these exports come from large-holder farms and the amount of production from
small family-farming is low.
In comparison to the large scale agricultural commodities, the small and medium
size farmers produce 37.8 percent of the available offer for domestic
consumption. There are 4.1 million small producers who are responsible for 50
percent of the daily food supply, 70 percent of the organic production, and for
hiring 80 percent of the agricultural work force.38 However, in terms of
subsidized governmental credit for production, it is the large scale properties
37
The Economist Pocket World in Figures, 2009 edition.
AlterEco Brasil Study and BSD presentation at the Fair Trade Round Table at Sebrae MG in
September 2010.
38
35
which accesses 73.8 percent, while small farmers end up with 25.3 percent of
it.39
The dualist Brazilian agricultural system is not only a matter of image. There is
indeed a separation between small and large scale agricultural sectors, which do
not work together. One emblematic example is the fact there are two agricultural
ministries in Brazil, one for the large plantations and agribusiness called
Ministério da Agricultura (Agricultural Ministry) and one for the small-holder
family run farms, the Ministério de Desenvolvimento Agrário (Ministry for
Agricultural Development). This can be seen as an attempt to accommodate the
large and small ones, without stepping into each others’ fields of interest.
This is also the case of the way Fair Trade is divided in Brazil, where there is a
whole socio-economic movement for the internal market, and another one for
exporting products.
As a legacy of colonial policies, where large areas were granted to few families,
the unbalanced productive land allocation is still an open topic in Brazil. In
the1990s, political and social discussions focused on land redistribution, land
titling and on granting family farm status to small-holder producers.
This period was marked by political mobilizations within social movements,
including political demonstrations and land occupation. Among the groups
putting pressure on the Government for a solution, the strongest one which also
had the highest visibility was the Movimento dos Trabalhadores Rurais sem
Terra (MST) (Movement of rural workers without land).40
Although the agrarian reform41 has not been entirely solved, such movements
brought the topic family farming to the spot-light, creating room for the
39
II Plano Nacional de Reforma Agrária, Ministério do Desenvolvimento Agrário, 2003.
Movimento dos Trabalhadores Rurais Sem Terra (MST) is fighting for a final decision on
agricultural reform and focuses mainly on land distribution and respective ownership entitlement.
http://www.mst.org.br/mst/index.html. Accessed on June 7, 2011.
41
Traditionally, agrarian or land reform is confined to the redistribution of land. In a broader sense it
includes the support needed to prepare new land owners to become producers, with access to credit,
training and production and commercialization support.
40
36
participation of civil society and for setting up networks of producer
organizations.
In this line, in 2004 the government, aiming at giving priority to the development
of forms of small family-farming, created the Ministério do Desenvolvimento
Agrário (MDA) (Agrarian Development Ministry). This ministry has three main
priorities: a) agrarian reform; b) promoting sustainable development of the rural
segment formed by family farmers; and c) identification, recognition and
legalization of land ownership of the quilombola remaining communities.42
The MDA is structured into three departments: Secretaria da Agricultura
Familiar (Department of Family Agriculture), Secretaria de Reordenamento
Agrário (Department of Agrarian Reorganization) and Secretaria do
Desenvolvimento Territorial (Department of Territorial Development).
It was in the 1990s that a few Brazilian small producers started operating in a
Fair Trade system. One of the first groups was of small orange producers, due to
a demand for Fair Trade orange juice in Europe, and also because these small
producers were seeking alternative trade opportunities and trying to achieve
independence from the domestic juice industry, which is concentrated in the
hands of two or three large juice processors.
Another one of the first cooperatives producing and exporting FT to an ATO
from Switzerland was CooperCaju, which is located in the semi-arid region of
Northeast Brazil and produces FLO Certified and Organic cashew-nuts. The
international trade relationship is a response to the members’ goal of developing
non-domestic markets. The concept of Fair Trade and the possibility of exporting
were introduced to the producers in Serra do Mel by a Swiss social entrepreneur
who has lived in the region since the beginning of the 1970s.43 Two other
42
Quilombola is a designation for the communities originally formed by refugee slaves, normally
descendents of Africans, who ran away from the sugar cane farms during slavery in Brazil and
moved to small properties, working on subsistence plantations and forming small villages called
quilombos. There are today approximately two thousand quilombola communities in Brazil.
43
This social entrepreneur is a Swiss-Brazilian national who moved to Brazil in the 1970s to support
development programs. He has also worked for other aid programs for the Swiss Government and
today runs a social foundation for child education in Natal (Rio Grande do Norte). Some other social
37
initiatives that supported small producers entering a Fair Trade system include
programs for sustainable development of the Amazon region and initiatives led
by religious groups, mainly in the north and northeast of Brazil (Wilkinson &
Mascarenhas, 2007).
The Fair Trade movement started to take shape in 2001, but it was between 2007
and 2010 that there was an increase in its products sales, especially coffee, due to
the Responsible Outsourcing Project coordinated by SEBRAE, Transfair, and the
consultancy firm BSD for WalMart.
In 2010, there were 38 FLO certified producers groups of which 18 were coffee
producers.44 In the case of coffee and orange juice, comparing the sales of the
traditional versus Fair Trade in 2009 only 0.13% of the coffee sales and 0.56% of
the orange juice were FT/FLO certified.45
There are three main elements which characterize Fair Trade in Brazil. The first
is its late entry in this trade system, in the 1990s. The main reason for this is that
Brazil is not on the list of countries for socio-economic help from European
governmental organizations, which in general take the concept of Fair Trade to
small producer organizations in the supported region and create a bridge with
buyers in consumer markets.
In this sense, although Brazil is in the OECD (Organization for Economic
Cooperation and Development), DAC (Development Cooperation Directorate)
2011 list as one of the countries which would be eligible for support from other
Governmental agencies, Brazil is not only not perceived as being in need for
external economic aid, but it has also strengthened its position as an international
entrepreneurs, like the representative of FLO in Brazil in the 1990s were great promoters of Fair
Trade in the country.
44
Cooperativa Sin Fronteras, Brazil Chapter. Presentation at the Madre Terra Conference in Turin,
October 2010.
45
Estimates by BSD presented at the Sebrae Entrepreneurial Fair in Belo Horizonte in Sept. 2010.
38
cooperation actor through the Agencia Brasileira de Cooperação (ABC –
Brazilian Cooperation for out-flowing technical assistance agency).46
Another interesting point is that special coffee blends, including organic and fair
trade, were already established when Brazilian small producers started to look at
international trade possibilities. In addition, the country has the external image of
large-scale plantations.
The third specificity of Fair Trade in Brazil is that there are two main movements
– one for the internal consumer market, which has been named Comercio Justo e
Solidário (Fair Trade in Solidarity), which follows the Italian model of
promoting family farming and has been coordinated by some grass roots
producer groups, NGOs and the Brazilian government; and one for exports,
which is then called Fair Trade, mostly referred to in English, which for
producers is mainly associated with the English model of FT, following FLO
standards and locally coordinated by SEBRAE (Schneider, 2007).
2.3.1 Fair Trade for the domestic market
As part of a local market development plan, promoting the local consumption of
products which have been grown by small-holder farmers, the government
developed several inclusive initiatives and for micro-credit, such as:
Programa Nacional de Alimentação Escolar (PNAE) (National School Feeding
Program). In 2009, the government decided that 30% of the budgeted amount the
federal, state and local governments invest in school feeding programs (in public
schools for basic education) had to go to acquisitions from family farms. In this
program, school feeding is managed based on assorts of menu, with monitoring
by a nutritionist, so that children are well nourished and can progress in their
studies.47
46
http://www.abc.gov.br/download/CatalogoABCAfrica2010_I.pdf, accessed on October 1, 2011.
In interviews with the cooperatives, several mentioned that the nutritionists’ menu is closed for the
purpose of giving preference to some organizations, and making senseless specification such as that
eggs cannot be white but red.
47
39
The PNAE puts out a public call for bids with a list of products. The producer
organizations create a sales project where they introduce the cooperative, the
socio-economic profile of the families of the members, describe their products
and propose a price to the city government. This is compared to prices in other
bids and if it is within the limits, the city hall publishes the amounts in the local
newspaper and signs a contract.
Programa de Aquisição de Alimentos (PAA) (Food Acquisition Program). This
program involves complementary school feeding as well as serving sectors of
society that have nutritional difficulties, for example, providing food to day care
centers, homes for the aged, pregnant women and others.
The Food Acquisition Program has four modalities: a) Advanced Buying: in
which resources are advanced to families to plant produce; its target is producers
who are part of agrarian reform settlements; b) Stock Creation: producer
organizations seek out products from their associates, put them in storage and
pass them on to CONAB (the National Supply Company)
48
that donates the
food; c) Purchase with Simultaneous Donation; d) Direct purchase: which
involves processed products within the specifications of the Ministry of
Agriculture. These products also have to be warehoused by the producer
organizations and made available through CONAB.
The School Feeding Program is a public policy included in the legislation. The
Food Acquisition Program was the result of former president Lula’s political will
and it is expected to be continued and become a permanent public policy.
In the Ministry of Agricultural Development, the Family Agriculture Department
develops and makes available rural credit lines through the PRONAF (National
Program to Strengthen Family Agriculture).49
There are various organizations, some led by civil society, others by trade
organizations that aim to develop Brazilian policies for Fair Trade. Among the
main and more traditional ones there is Faces do Brasil50, created in 2001 by
48
http://www.conab.gov.br/ accessed on September 25, 2011.
http://portal.mda.gov.br/portal/saf/programas/pronaf accessed on September 25, 2011.
50
For more information about Faces do Brasil, please access http://www.facesdobrasil.org.br/
49
40
articulation among public and private entities, and that has a more institutional
role.
The other group is called EcoJus51which is a not for profit formed by fifteen
small producer organizations from different regions with different types of
products. This group was formed in 2004 with the goal of defending the
interests of small-holder producers and to promote programs to raise the
awareness of final consumers about the importance of giving priority to
purchasing products from Brazilian family farming.
In the case of EcoJus, their main differentiator is that the protagonists and leaders
of the process of defining joint activities are the small producers themselves.
EcoJus has been working to define a seal for family agricultural producers, to
develop a voluntary certification system and to optimize synergies among
associates who already have access to large consumer markets in Brazil. As an
example, they share information about buyers and try to include other producers
groups in the purchase contracts in order to achieve the minimum amount for
exports. This organization also tries to assure that Fair Trade really be extended
to small family agriculture producers, rather than the tendency of getting large
plantations certified.
There are also other institutional organizations like the Unicafes – União e
Solidariedade das Cooperativas de Empreendimentos em Economia Social do
Brasil (Union and Solidarity of Social Entrepreneur Cooperatives for Social
Justice in Brazil), Secretaria Nacional de Comercio Solidário (National
Department for Solidarity in Trade), Sistema Nacional de Comercio Justo e
Solidário (National System for Fair Trade and Solidarity), and the Fórum
Brasileiro de Economia Solidaria (Brazilian Forum for Economic Solidarity).
For technical assistance, small producers and their organizations in general have
support from EMBRAPA (Brazilian Company for Agricultural and Livestock
Research) which is connected to the Ministry of Agriculture.
51
For more information about EcoJus, please access http://www.nordestecerrado.com.br/ecojusbrasil/
41
All these governmental programs and local trade and civil society organizations
show the growing importance of the domestic market for family-farming
products consumption.
2.3.2 Fair Trade for Export
After some previous attempts to create an organization in Brazil that would also
authorize the use the FLO Fair Trade label in finished products for local final
consumers, at the beginning of 2011, the Brazilian Association for Fair Trade
(ABJC) was created and is led by a fruit export entrepreneur who is as well as a
consultant for Fair Trade markets. ABCJ has been working hand in hand with
the FLO to initiate a process of granting the trade mark license for local products
to consumer.52
The FLO representative for Brazil, Bolivia and Argentina met with MDA
representatives in Brasilia in March 2011 to coordinate programs that aim to
prepare and develop producer groups to work with the export market. Another
important actor in developing Fair Trade along the lines of FLO and aiming at
exporting is the SEBRAE.
52
http://fairtrade.net/single_view1.0.html?&cHash=bba9084d39&tx_ttnews[tt_news]=201 accessed
on July 20, 2011
42
3.
Intercultural Dialogue
Culture is like gravity: you do not
experience it until you jump six feet
into air (Trompenaars and
Hampden-Turner, 1998).
Intercultural or cross-cultural communication refers to the study of interaction
between people representing different cultures (Sarangi, 1994; Martin and
Nakayama, 2009). In intercultural encounters, the individuals involved bring
their cultural backgrounds and life experiences as well as a set of pre-conceived
images of the other, which has been formed by the narratives of “self” and the
“other” (Sarangi, 1994; Petkova, 2006; Beller & Leerssen, 2007). A set of
different actors form and shape such images as history books, literature, travel
guides, celebrities, fashion, soap-opera, marketing agencies, advertising,
publicity and the mass media.
According to Fornet-Betancourt (2001, p.159): “[…] any definition of the
intercultural must take into account its context, either cultural or disciplinary,
and to present itself not as the perspective that delimits what is being focused on,
but on the contrary, as a window that allows us to see only part of the space
opening toward what is being looked at.”53
In recent times, the intercultural encounters are more frequent due to
globalization and its “side-effects” like the search for the cheapest outsourcing
options, increasing international conflict and security tensions, world
competition for natural resources, global environmental challenges, and
population shifts including a growing expatriate population (Martin and
Nakayama, 2009; Samovar, Porter and McDaniel, 2009). There has been a shift
from the North-South to a South-South economic route with the rise of the BRIC
countries as one of the outcomes of the latest economic crisis in Europe and the
USA, and a growing consumption in countries like China and Brazil.
53
Translated from Spanish by the author.
43
These two, for example, are in the process of expanding the commercial contact
from beyond the commonly traded commodities to the implementation of
industrial sites to develop products for the respective domestic markets,
involving a deeper knowledge of consumer habits, management style as well as
new waves of expats groups.54 55
Before stating the elements of the cross-cultural dialogue, it is key to define
culture in its variety. Although in 1952, Kroeber and Kluckhohn had already
identified 160 definitions, the ‘problem’ with the term ‘culture’ is that it brings
along common understandings which range from culture as art to culture as a
specific way of life (Kiefer, 2001).
Culture refers to the web or collective matrix of influences that shapes the life of
the individuals or groups (Corin, 1994), including norms, values, social
institutions, beliefs and world-views (Trompenaars & Hampden-Turner, 1998).
It also influences the power relations in community development contexts, based
on gender, class, age, and religion. As noted by Lars Fant (1997, p.478): “culture
is attributable to any cohesive group of any size, provided the group attributes an
identity to itself.”
Franz Boas’ classic definition of culture is the one adopted for this study, as it
brings a social and anthropological holistic view of it:
“Culture is the system of shared beliefs, values and customs, behaviors and
artifacts that the members of society use to cope with their work and with one
another, and that are transmitted from generation to generation through
learning.” 56
54
The University of St.Gallen is producing a manual on intercultural relations among the BRIC
countries to be published in 2012 under the coordination of Yvette Sánchez.
55
One example is the Chinese JAC Motors plant implementation in Brazil and the product line
adaptation to Brazilian consumers’ preference. For more information, please access:
http://carplace.virgula.uol.com.br/jac-se-adapta-para-agradar-consumidor-brasileiro/ published on
February 23, 2011.
56
As quoted in: Cultural Anthropology, 1990, 2nd ed. Daniel G. Bates, Fred Plog. New York:
McGraw Hill.
44
Nevertheless, it is more important to know what to do with culture than just to
define it (Saragi, 1994; Meeuwis & Sarangi, 1994). Throughout the development
of intercultural studies, authors such as G. Hofstede (1968, 1972), Trompenaars
and Hampden-Turner (1998) and R. House et al (2004, 2007) have accumulated
a large base of research and consolidated the results of the different value
systems between nations into the forms of binary oppositions of social
dimensions.
In this line of global comparative studies of cultural values, the latest and most
comprehensive was the Globe57 which is a 10-year Global Leadership and
Organizational Behavior Effectiveness research project developed by Robert
House et al (2004).
The Globe study includes 62 Nations and looks at culture as practices (the way
things are done in that specific culture) and values (the way things should be),
that were accessed at the societal and organizational levels through artifacts as it
was understood that these are human made and represent the way things should
be.
Cultural value as should be (judgment of)
Cultural value as is
Set of shared values, beliefs, implicit
theories commonly held among members
of a collectivity (society or organization).
These are called attributes of culture.
Practices of entities (family,
school, work organizations) and
behaviors.
Figure 2- The nine value dimensions of the GLOBE study checked as is and
how they should be.
It proposes an integrative view in which there is a clear relationship between the
local culture and the leadership style. In the Globe Study, Robert House et al
state that (2004, p.580): ”the attributes and entities that differentiate a specific
culture are predictive of organizational practices and a leader’s most frequently
enacted attributes and behaviors tend to be the most effective in that culture.”
The GLOBE study involved consultants from the different cultures and as
57
Robert House, Paul Hanges, Mansour Javidan, Peter Dorfmann, Vipin Gupta (eds.) (2004).
Culture, leadership and organizations: the Globe study of 62 societies. California: Sage.
45
models correlating leadership to culture and societal functioning were built,
there was an ongoing sounding board with members of the respective cultures.
As researchers started consolidating the results into cultural dimensions, a
comparative study was performed based on Hofstede’s (1980), Schwarz’s and
Inglehart’s (1997)58 previous works. The GLOBE study dimensions are
described in the Figure 3.
GLOBE Cultural
Dimension
Meaning
Future Orientation
The degree to which a society encourages/rewards futureoriented behavior.
Measures the degree to which a society minimizes gender
role differences. It has to do with an egalitarian treatment
between men and women.
Measures the degree to which individuals in society are
allowed to be dominant, aggressive and confrontational in
social relationships.
Denotes the degree to which individuals express pride,
loyalty, and cohesiveness in their organizations,
workgroups and families.
Refers to the extent social institutions or institutional
practices encourage and reward collective distribution of
resources and collective action.
Measures the degree to which a society encourages and
rewards group members to performance improvement and
excellence.
Measures the degree to which a society encourages and
rewards individuals for being fair, friendly, caring and
compassionate.
Measures the degree to which a society expects and agrees
that power should be unequally shared or distributed.
Measures the degree to which a society strives to avoid
uncertainty by norms, rules, rituals, plans, bureaucratic
practices and so on.
Gender Equality
Assertiveness
In-Group Collectivism
Institutional Collectivism
Performance Orientation
Humane Orientation
Power Distance
Uncertainty Avoidance
Figure 3: GLOBE Study value dimensions. (Globe 2004) 59
58
Ronald Inglehart (1997). Modernization and postmodernization: Cultural, economic and political
change in 43 societies. Princeton, NJ: Princeton University Press.
59
Jagdeep Chhokar, Felix Brodbeck, Robert House (eds) (2008). Culture and Leadership across the
World: The GLOBE book of in-depth studies of 25 societies. Mahwah, New Jersey, London:
Lawrence Erlbaum Associates Publishers.
46
Some of the above dimensions are in fact new ways of approaching Hofstede’s
mostly criticized value dimension Femininity and Masculinity, which he claims
to be misunderstood and further explains in a book called Masculinity and
Femininity: the taboo dimension of national culture (1998).
Being aware of the concerns and critiques related to this bi-polar dimension, the
GLOBE study has “distributed” the femininity and masculinity values attributes
in the form of gender egalitarism, assertiveness, performance orientation and
humane orientation (House et al, 2004).
In order to illustrate how the comparative bi-polar dimensions would “position”
one country/nation in relation to the other, based on the GLOBE study it is
possible to draw the value dimensions of Brazil and Switzerland60, which have
been summarized in the graph below. In the case of these two countries, the
value dimensions which seem to have a higher gap are: Performance
Orientation, Uncertainty Avoidance61, Assertiveness and Future Orientation.
GLOBE Study Dimension Scores - BRA and CH
Brazil
CH (Germ an speaking)
assertiveness
uncertainty avoidance
5.00
5.37
future orientation
4.51
4.73
3.81
4.20
3.60
collectivism
4.06
2.97
1.00
3.83
3.60
4.90
5.33
power distance
3.31
gender egalitarianism
3.66
4.04
4.94
humane orientation
perf ormance
orientation
Figure 4: Comparative value dimensions scores for Brazil and Switzerland
(german speaking part) according to the GLOBE study (2004).
60
German speaking part of Switzerland.
The german-speaking part of Switzerland ranks first in uncertainty avoidance in the GLOBE indepth study of 25 societies.
61
47
Although this sort of study based on bi-polar value dimensions can be very
instrumental and support differentiating nations’ cultural profiles for different
sorts of topics from communicating with people to defining different rewards
systems, there has been much criticism to them.
For example, that they impose an Anglo-Saxon world-view, that they are predeterministic, generalist, universalist, and that they ignore or obscure other
cultural elements, which may have a higher influence on people’s behavior, such
as the context they are in or their social and institutional role-relationship and
that, after all, cultures are dynamic and heterogeneous (Sarangi, 1994;
Wierzbicka, 2003; Kirkman, Lowe and Gibson, 2006; Jones, 2007).
One of the fiercest opponents to G. Hofstede and to all sorts of bi-polar
dimensions is B. McSweeney. In an article under the title Hofstede's Model of
National Cultural Differences and Their Consequences: A triumph of faith – A
failure of analysis (2002, pps.55:89), McSweeney listed out several elements he
saw as gaps in the methodology applied for defining the dimensions per se.
His main points include the sample size of the first survey and the fact it was
based on only one company, IBM, which also holds a strong corporate culture
and this might have influence results. And the impact is that results from one
single company cannot be amplified into characteristics of a whole society and
nation.
Another of McSweeney’s concerns is that these bi-polar dimensions are very
misleading as they may guide people to quickly jumping into conclusions on
what to expect during an encounter with individuals from other cultures. All
based on the expected behavior according to Hofstede’s country positioning in
his pre-defined cultural dimensions.62
The point though is that in the end both Hofstede and McSweeney apply bi-polar
dimensions. Along these discussions about what differs in each culture and
comparisons among them, I would like to bring up Edward T. Hall (1989a, p.14)
62
For more about the discussion between Brendan McSweeny and Geert Hofstede, please refer to his
response in the article entitled Dimensions do not exist: a reply to Brendan McSweeney. Human
Relations, vol. 55.
48
point of view that: “the models that men create to explain nature tell you more
about the men than about the part of nature being studied.”
Another concern about the use of pre-defined cultural dimensions refers to the
tendency of directly relying on them to explain the intercultural relations, leaving
aside other elements that might have a higher impact, such as codes embedded in
languages, communication patterns, and the institutional role-relationships in the
intercultural encounters (Fant, 1997).
By assigning beforehand the cultural differences while in an intercultural
contact, this will already delimit relationship outcomes, based on the set of
expectations one side will have about the other’s behavior.
The researcher acknowledges that the value dimensions related to the two
cultural groups part of this study express a trend towards a certain dimension
rather than defining the group in this dimension. It is not a taken-for-granted
assumption, but will support clustering the main identified ways of doing
business which came along the case study analysis.
Cross-cultural studies should not focus only on the mismatch of communications
patterns and understandings as a source of conflict where culture is seen as a
“homogeneous entity” (Sarangi, 1994; ten Thije, 2003; Samovar, Porter and
McDaniel, 2009). Nor should it concentrate only on the interactionalsociolinguistic perspective, which emphasizes differences in discourse and
language according to ethnicities like, for example, in the ways of requesting
information or asking for apologies in a native and then non-native language
(Scollon & Scollon, 1995).
Bolten (2007; 2009) proposes an interpretative approach in which the
intercultural relationship is described and the critical incidents are identified. He
points out that the miscommunication along intercultural contacts do not have
only an immediate impact, but such effects get extended into future similar
situations between the same individuals or people from that culture.
It becomes then an integrative process which is achieved by negotiating through
communication when members from an organization who differ from each other
49
in certain ways of thinking or behaving, get closer and through a process of
compromise jointly come to a certain level of agreement. This mechanism often
develops forms of cooperation that did not exist before.
In this study, for the analyzing the intercultural dialogue I have pre-selected the
following culture based behaviors/ expressions which seemed to apply most to
the involved groups – small producers’ cooperatives from Brazil and their Swiss
buyers:
Communication Patterns: which includes collectivist and individualistic
decision making; direct and indirect communication style (high and low
contexting); and two other specific cultural elements for Brazil which are:
the foreigner in the Brazilian imaginary and when yes means no;
Dealing with Time: which includes future orientation and monochronic
(mono-task) versus polychronic (multi-task) management;
And in the second part of the study we will be looking at:
Image studies in the Intercultural and the external image attributes of Brazil
and Switzerland;
And the constructs of Fair Trade, which influence both the creation of
stereotypes concerning producers as well as defines what is fair.
3.1
Communication Patterns
3.1.1 Collectivist and Individualist Decision Making
This cultural construct is among the most studied and traditional ones and
directly interrelated to future orientation, communication patterns (direct and
indirect), social interaction patterns and levels of economic development.
Rather than viewing them as opposing values, they are very much
complementary to each other, and although different cultures may have a more
prominent tendency towards the group or the individual’s decisions and
preferences, they are bouncing between the two. Trompenaars and HampdenTurner (1998) see the group and the individual as being complementary to each
other, while the individual is the end and the community the means.
50
Individualism has been described as a “prime orientation to the self”, and
communitarism as a “prime orientation to common goals and objectives”
(Parsons & Shils, 1951 cited in Trompenaars and Hampden-Turner, 1998, p.5).
Collectivist cultures praise group harmony and cohesion. They prefer to build up
relationships carefully and to keep them (Trompenaars and Hampden-Turner,
1998). When in a commercial deal, this has a direct impact on time management
as the process of evaluating proposals and coming to a common conclusion in a
collective manner affects the response time.
Although voting would have been an option for the collective to arrive at an
agreement on decisions, this is absolutely a no-go, since collectivists believe that
everyone’s opinion must be taken into account.63
From the viewpoint of collectivism, and associated with the creation of the
public, it is important to consider the concept developed by the Colombian
educator Bernardo Toro64 that correlates the individual’s sense of collectiveness
to the construction of citizenship and democracy.
According to Toro, in many cases in the Latin American continent, the social
construction of the public requires a change in perspective from the individual
and private, to the collective and public. In this context, the public or the
common good can be understood as what is convenient to everybody in an
egalitarian form and respect for each other’s dignity.
The “sense of the public” is built on individual interactions in community spaces,
associations, schools, during public interviews and debates made available to all
by the communications media. The more connections one has to different social
63
In Peru, during field work for the Center of Leadership and Values in Society from the University
of St.Gallen, in August and September 2009, a traditional coffee cooperative was having political
problems because they had to implement a representation system for groups of members to attend the
yearly general assembly, as the total number of members increased to 1,000. Some members got
offended and felt excluded, and the fact that not every single person could attend was considered a
non-democratic process.
64
Bernardo Toro. A construção do publico: cidadania, democracia e participação. Nísia Duarte
Werneck (org.). SENAC Rio, 2005.
51
groups, the more they will follow the rules and aim at a common will (Toro,
2005).
The origin of individualism goes back to the industrial era, as the running of
factories required individual units, and a division of labor, as well as the
scheduling of activities and working in shifts (E.T. Hall, 1989a). There is also an
association with religion, with Catholics being more community oriented and
Protestants more individual oriented (House et al, 2004; Weber, 2004).
Individualistic cultures hold people responsible for their own actions (Novinger,
2003). The expression ‘self-made person’ can be seen as one of individualism
(LeBaron, 2003). Putnam, in the book Bowling Alone – the collapse and revival
of American community (2000) poses his concern that North Americans have
become so individualistic that they are less engaged in civic activities and
neglect group activities for individual ones.
In individualistic organizations professionals are valued for their expertise and
capabilities to deliver what is demanded by the position and they are rewarded
according to accomplishments. In the case of collectivist ones, relationships may
count more than knowledge and performance, and being rewarded or promoted
may depend on the social network and connections more than one owns
capability (Gelfand et al, 2004).
There is also a difference if one lives in urban or agricultural areas. In a study,
Reallo, Allik and Vadi (1997) concluded that urban environments tend to
concentrate people with a more individualistic view and approach, while those
living in the country-side will be more group oriented.
Based on the Globe Study, in the German-speaking area of Switzerland, similar
to Austria, Germany and some other countries from Northern Europe, people
tend to be more individualistic, independent, assertive and to first focus on
themselves, then on their families and just then on the community and so on.
“Only if the individual family cannot do, the community should do; only what the
community cannot do, the canton should do; only what the canton cannot do, the
Federal State should do” (Wittmann & Hilb, 1992 cited in Weibler and
Wunderer, 2008, p.256).
52
Brazil, similar to other Latin American countries, tends to be a collectivist
society, where there is a long term orientation towards commitment to the
member group, and family relations are extremely important. High in-group
collectivism means Brazilians prefer to build interpersonal rather than
transactional relationships.
Face-saving concerns and strategies during negotiations also vary in
individualistic and collectivist societies. Ting-Toomey et al (1991) did a study on
conflict, the self and other face-saving approaches during negotiation situations
in five countries.
It involved a comparison among four Asian countries - Japan, China, South
Korea and Taiwan, which are considered to be more collectivist cultures; and the
United States, which is considered to highly value the individual. The study
concluded that the collectivist cultures had a tendency towards avoiding conflict
and looking for a compromise, while individualist ones had a more direct and
aggressive negotiation style aiming at self-face saving.
This correlates with direct and indirect communication patterns. One example is
the theatrical nature of legal trials in the United States, in which individuals
apply extremely direct and accusative speech to defend their positions (Chhokar,
Bordbeck and House, 2008).
In the case of collectivist cultures, the social connections influence the way the
law applies to the individual. As an example, this is summarized by the Brazilian
saying for friends, anything is possible; to our enemies, we apply the law65 which
shows the importance of the social relations and connections which go far
beyond what one can foresee.66
In Brazil, the legal system does not have to do with social reality and is formed
by several prohibiting rules which submit the citizen to the State. It is also a sign
of the hierarchic nature of social relationships where it is possible to forge a
65
Para os amigos tudo, para os inimigos a lei. Translated from Portuguese by the author.
For more about the Brazilian networks in business, refer to Capitalismo de Laços – Os donos do
Brasil e suas conexões (Capitalism of ties – Brazil’s owners and their connections) (2011). Sergio
Lazzarini, São Paulo, Elsevier.
66
53
situation into a law category where the individual will be less penalized (Caldas,
1997). For instance, the individual prison cell for someone who has got a
bachelor degree or the government officials that try to work around the laws for
their own benefit, by applying different interpretations, and using their political
influence.67
It is this process of trying to find alternatives to the very strict, heavy,
bureaucratic legal and tax systems, depending on the type and level of personal
relationship, that the Brazilians call jeito or jeitinho (in the diminutive) and
which means finding a way to overcome whatever is prohibited or which seems
likely not to have a solution (Novinger, 2003). The term can be roughly
translated as a “knack” or a “clever dodge”', jeito is a rapid, improvised, creative
response, to law, rule, or custom that on its face prevent someone from doing
something.
This has a positive side, which is creativity and innovation, and there is a
negative side involving a conscious act of breaking formal rules (Broekelmann et
al, 2005).
Jeitinho also works when owing someone a favor by finding faster and better
alternatives for to a situation, which if not by the ‘good access’ to the right
people and systems, it would have taken much longer to be achieved. For this,
one must rely on his/her own social network, and this links back to the
significance of having and showing the ‘important connections’ in the social
arena (Faria, 2010).
Favoritism linked to bureaucracy has created a mechanism of alternative services
for those who do not have the direct connections, but that would like to avoid the
time consuming process of getting some situations sorted out, especially with
governmental agencies. These services are provided by the despachantes, which
are nothing more than services providers to sort out issues and problems like the
67
Just to illustrate, on the very last day of his term, President Lula requested that the Ministry of
International Relations grant his children the right to a diplomatic passport, which is a jeitinho to
break the law which allows this type of passport for a few governmental positions and for the
children
and
spouse
of
the
President
only
while
in
office.
In:
http://veja.abril.com.br/noticia/brasil/filhos-de-lula-ganham-passaporte-diplomatico-do-itamaraty
54
renewing of a drivers’ license, or to sort out documents in governmental
agencies, including those for opening or closing a company, to taxes that have
been forgotten to be paid (Da Matta, 1984).
In this research I have brought up this aspect of jeitinho and of the importance of
personal relationships because in many cases they are not visible, but are at the
background of interactions in Brazil.
3.1.2 Direct and Indirect Communication (High and Low Context)
This part of the theoretical review is founded on E.T. Hall’s (1972, 1983) work
on communication patterns, based on the messages being more or less context
related. Hall states that words and sentences have different meanings according
to the “environment” in which they are embedded, and that cultures have
different context patterns.
In a high context communication culture, people tend to give indirect and
apparently incomplete messages, making reference to someone else or a specific
situation, often leaving the sentences in the middle to be understood by the other
party. Much of the information is to be read between the lines in group’s own
pre-defined “coded” vocabulary and nonverbal cues. The information is implicit,
between the lines or in non-verbal communication.
In low context cultures, it is the opposite: people are more explicit, tend to give
direct and complete messages and the information is conveyed in words rather
than in nonverbal cues.
For those communicating in a high context, being in a conversation with
someone who comes from a low context background, the tone of voice and direct
messages without content softening, may give the impression of rudeness, or of
having something against the person.
Conversely, when low context persons talk to a high context others, they may get
the impression that the person is hiding some information or that they do not
know what they are talking about and that they lack assertiveness. Low context
people expect directness.
55
People from a high-context communication pattern tend to over-understand the
meaning behind the messages (Samovar, Porter and McDaniel, 2009). It also
leaves space for face-saving, multiple understandings and group decision. This is
the reason why, in general, high context communication takes place in
community-oriented groups (LeBaron, 2003).
According to the Globe Study, high context cultures include most of Latin
America and China. And the top ones in low context are Switzerland, Germany
and the United States.
In direct and indirect communication styles, the ‘point making’ happens in
different ways. In direct communication, the main point of an argument comes
first, followed by the explanations and supporting information (point >
information); and in indirect people tend to first give the arguments and then to
make the point (information > point) or even talk around the point (E.T. Hall,
1990; Novinger, 2003).
In this information scheme, direct communication cultures will feel anxious
when talking to indirect ones, and may constantly ask the question ”what’s the
point?” while those used to indirect communications may perceive the messenger
as very self-centered and convinced of the righteousness of their point
(Novinger, 2003).
3.2
Time Management
Time management has high impact on the way of doing business and in many
cases it is considered the main source of misunderstanding and can certainly
cause trade relationships to fail.
Different factors seem to influence societies and groups of individuals being
more or less time oriented, among them: a) attitude towards socialization; b)
socioeconomic situation; c) political stability; d) education; e) gender roles and
f) religion (Bluedorn, 2000).
56
There are two main definitions for the way individuals and organizations from
different cultures manage time. Sequential or monochronic time which we will
refer to as M-time; and synchronic or polychronic time to be referred to as Ptime (E.T. Hall, 1989a, b; Trompenaars and Hampden-Turner, 1998).
In general, in central Europe and North America people live and operate in
monochromic/sequential time, in a life-style ruled by planned milestones,
scheduled meetings. Time is so important that it becomes a “concrete element”
that can be “saved, spent, wasted, lost, made up, accelerated, slowed down,
crawling and running out” (E.T. Hall, 1989a, p.19), and “time is money”.
Relationships among members of a working group also get allocated into time
frames for which deadlines are important to determine the end of a certain
activity and the beginning of the next, in a connected causal chain (Trompenaars
& Hampden-Turner, 1998).
E.T. Hall (1989b, p.48) observes that: “time is so thoroughly woven into the
fabric of existence that we are hardly aware of the degree to which it determines
and coordinates everything we do, including the molding of relations with others
in many subtle ways.”
In polychronic cultures, people manage several activities in parallel, and
punctuality is not very important. Time is nonlinear and there are several things
happening at once. In this time-space system, people prioritize activity
accomplishment rather than sticking to a schedule or agreed event in time. They
interact with many people simultaneously, and establishing close relationships
with work colleagues is important.
In Latin America and the Middle East, people tend to be polychromic and this is
why it is common to hear or to experience there that people do not plan or take
scheduled meetings so seriously and that they surprisingly tend to make last
minute changes to planned or scheduled events (E.T. Hall, 1989a). On the other
hand they guide themselves by accomplished activities, even if they finish them
earlier (or later) than planned with the monochromic time working partners.
57
Time management and message/communication context levels are directly
interrelated. Polychronic time cultures are focused on people, networks and
relationships and they see their activities as part of a larger system.
Monochronic time cultures on the other hand are so much schedule and deadline
oriented that they may easily forget to look around and contextualize.
It is quite a challenge when individuals from these two time systems come
together to work on the same project, and it can get even more complicated if
there is an expectation that those operating a family-run activity highly
dependent on nature and the environment could manage it like an industrialized
process, with complete control over time and progress reports.
This is the case of small family farmers where harvest time determines the work
cycles, and weather conditions play a key role in the way they plan and prioritize
their activities.
Agricultural producers adapt themselves to the environment, and their profession
is typically polychromic. They manage several activities and issues at the same
time, from harvesting to negotiating the product price; worry about the weather
conditions and whether the neighbor is using pesticide that might get spread onto
their organic plantation.
This is rather different from the urban life and office working style, where people
are ruled by an eight-hour working time with constant access to computers
directly linked to the web in an acclimatized environment with little or no
connection to a biological rhythm.
Working team management is also influenced by time and activities management
styles, decision on flex-time and remuneration schemes. In M-time, the team
coordinator schedules the activities and leaves it to the individuals. When the
agreed deadline comes, the assigned activities will be checked (Trompenaars and
Hampden-Turner, 2004).
In the P-time though, the team coordinator should clearly define each member’s
job description and prepare a list of activities to be checked from time to time,
but members decide when they will do them. Due to simultaneously carrying out
58
multiple activities jointly with other people, P-time people and teams tend to be
more aware of the whole context they are part of (E.T. Hall, 1989b), and project
coordinators should make sure they keep team members updated about the main
objective and about how each ones’ activity will contribute to the final result
The industrial development model is M-time and the theories on processes
management and economic development follow a westernized linear and
time/activity compartmentalized way of dealing with people and things. Due to
the fact this is considered to be the exemplary model, expected to be followed by
other cultures, those located in P-time societies often perceive their way of
managing time as chaotic and that it needs to be “improved”.
Nevertheless, time related behavior not only involves how people and
organizations manage their activities within a frame, but also how they relate to
past, present and future.
In the Globe study, the definition of future orientation is “the extent to which a
society or an organization believes that the current actions will influence their
future”, and this has an impact on how they plan investment and savings, or
believe in better life quality (Ashkanasy, Gupta, Mayfield, Trevor-Roberts,
2004).
The future oriented tend to be very conscious that their current actions will
influence the future and they therefore plan to achieve their vision but may “lack
solid appreciation of situational realities and neglect current personal and social
relationships” (Ashkanasy, Gupta, Mayfield, Trevor-Roberts, 2004).
People who are inclined to overvalue past traditions and make sure these are
respected in the present are past oriented. Past oriented individuals or societies
are likely to rely on the antecedent experiences and guaranteeing that the
traditions and values will be kept. Present-oriented cultures prefer to live today
and do not pay much attention to past traditions nor to what could come in the
future and therefore may show incapacity or unwillingness to plan a sequence to
realize their desired goals (Ashkanasy, Gupta, Mayfield and Trevor-Roberts,
2004). Present-oriented people or societies tend to rely on each other, be
spontaneous and enjoy the moment.
59
From a philosophical point of view, future orientation comes from the individual
need to “leave their contribution” to society in their life time and impacts how
much a society or organization values the triple bottom line sustainability. Long
versus short term view also seem to influence domestic savings (Hofstede, 1984;
Ashkanasy, Gupta, Mayfield and Trevor-Roberts, 2004).
In Switzerland, according to the second GLOBE study which involved an indepth study of 25 societies (2007), in the time orientation as is, the country ranks
high up, with the second position in relation to the 61 researched countries. In the
should be it is positioned number 59, what is also a sign that the Swiss are happy
about the way they manage time and there is no perceived need to change it.
Hofstede and Bond (1988) proposed that societies which followed a Confucian
ethic tended to be more future oriented, careful about their savings and focused
on good and long term relationships. Other authors argue that savings may also
have to do with insecurity about pension funds or relying on the state’s security
systems for the elderly.
In this line, the short term view and present orientation of Brazilians can be a
reflection of the high inflation times, when people had to rush to the supermarket
right after their paychecks, and savings did not mean much as the interest rates
were not competitive enough to promote savings over immediate consumption.
Although inflation is under control since 1996, or 15 years ago, the economically
active generation has a live memory of these times. Planning longer term is a
“habit" that is still new to Brazilians, who at the same time still fear to go back to
the economic situation of the early 1990s.68
68
In 1994, inflation reached the rate of 2,490%. Please refer to the average inflation rate in Brazil in
Annex 4.
60
3.3
Image Studies in the Intercultural Dialogue
Although different cultural backgrounds shape the way of doing business, how
each side perceives the other and sees itself may have a greater influence as a
source of misunderstandings in cross-cultural relations than cultural background
per se (Martin & Nakayama, 2009; Cinnirella, 1997).
When in an intercultural contact situation, one’s cultural background and
references guides perception and selection through mechanisms of comparison
between what is already known in relation to the new and different. The foreign
space becomes the reflection of the representation of one’s own reality, in what
is called the mirror metaphor, in the sense that when one tries to represent the
other, this is done from one’s owns position/perspective (Beller, 2007).
Image Studies or Imagology refers to the studies of our mental images of “the
other” (hetero-images) and of “ourselves” (self-image). It analyses the process of
stereotyping or othering, and it does not aim at checking if a specific stereotype
is true and refers to reality.
Imagology does not aim at pointing out new national profiles nor to question the
national character, but rather to reaching and analyzing different countries’
images through the way they are reflected in literature, travel books and the
media, how they get structured. It also studies their development and
repercussions over time (Dyserinck, 1988). In this sense, images are not an
information element, but properties of their context (Leersen, 2006).
These preconceived notions and views of “the other”, precede the formation of
stereotypes and prejudice, conditions our way of seeing and judging the other,
and influence our willingness to trust between the involved individuals (Leersen,
2006; Freidberg, 2003). Beller (2007, p.4) observes that:
“[Such] image rules our opinion of others and controls our behaviour towards
them. Cultural discontinuities and differences (resulting from languages,
mentalities, everyday habits, and religions) trigger positive or negative
judgments and images.”
61
According to the Social “Identity” and Intergroup Behavior Theory, we do not
act as isolated individuals but as social beings who derive an important part of
our identity from the human groups and social categories we belong to; and we
act in accordance with this awareness be it in our work relations, in our valuing
of justice and even in the decision and process of learning a second language
(Tajfel, 1982; Turner & Oakes, 1989; Jost & Sidanius, 2004).
There is interdependence between the image of “the other” (or what is external to
us and therefore different, also referred to as hetero-image) and the self image.
We define what we are in relation to others, and vice-versa. One’s
understanding of ‘the other’ also depends on how people see themselves in that
specific relationship (Bolten, 2007).
The mutual correlation between the self image and that of the other is so specific
to one relationship/situation that if the external point of comparison changes, so
does the self-image. The same applies in different socio-economic and political
contexts (Bolten, 2007).
Another relevant element of the intercultural contact is that, besides the selfimage and image of the other, there is also the meta-image, which is what people
suspect that the other thinks and expects about them, and this influences the way
they will present themselves in front of this other.
It is a continuous process of perceiving ourselves in relation to the other and to
the meta-image, and it is only when we exchange positions that we better
understand the other and ourselves and our respective behavior in diverse
situations either in intra or inter-cultural settings.
62
Self-Image
Image of
the Other
Meta-Image
Figure 5: The relations between image of the other, self
and meta image69
The individual in his/her environment is in an ongoing process of confrontation
between ”identity” and ”alterity”, auto and hetero image, the self and the other,
as part of a process of what he/she encounters and experiences. It means being
identifiable and differentiating from the other and is based on positive and
negative comparisons between the self and the other (Hatch and Schultz, 2000).
Roberto da Matta, in the first chapter of his book entitled What makes brasil,
Brasil? (1984)70 brings as example a set of comparisons to illustrate how the
individual defines his/her self-image, related to the nationality, in relation to “the
other” : “I know I am Brazilian because for me football is played with the feet
and not with the hands; I speak Portuguese and not Spanish or English; I like to
eat feijoada71 and not hamburger; I believe in both Catholic saints and African
Orixas; I go to the beach to meet with my friends and not to exercise.”72
People have an unconscious stock of generalized images of the other, which
come into play depending on the situation. It is a selective perception and even if
69
Bolten, 2007, p. 123.
Roberto da Matta (1984). O que faz do brasil, Brasil?. Rio de Janeiro: Editora Rocco.
71
Typical Brazilian dish which is made with black beans and pork meat.
72
Translated from Portuguese by the author.
70
63
they have been somehow exposed to ‘the other’ culture, they have only
understood part of that reality and tend to take these parts as representative of the
whole (Cinnirella, 1997; Sherman et al, 2005; Beller & Leerssen, 2007).
To evaluate the “otherness” we first look at what is familiar to us, of what we
recognize, and we can only see parts of reality. Because people first define and
then see, they tend to get and understand only parts and to take these as the
whole picture, without giving the time to review their perceptions (Lippmann,
1922, cited in Beller, 2007, p.4).
Beeler (2007) gives as an example Goethe’s experience when he traveled to Italy
and visited the church of St.Francis. Much of his understanding was based not
just on his cultural background, his German nationality and Protestant religion,
and any negative perceptions he might have had about Catholicism and medieval
art, but also on what he had previously read about it, and the sum of all these
facts resulted in the deliberate selection of what he wanted to see and what he
ignored.
People have a selective perception based on culturally accumulated experiences
and pre-defined images we have of the Other based on what we have read in
history or traveler books, in the internet, on what we have heard from other
people, and have been informed by the media.
This relates to the process of Wiedererkennung, or to recognize what we know.
Once such images have been internalized, they are resistant to change even when
exposed to new information (Aronson, Wilson and Akert, 2005).
It is easier to overcome political disputes than to review or delete some preconceived image of the other (Cinirella, 1997; Beller, 2007). The social images
or set of fixed ideas and beliefs held by members of one or more groups about
members of another group are called stereotypes (Tajfel & Turner, 2004).
Stereotypes can be directly related to prejudice, they are emotionally influenced
and cognitive (Beller, 2007). It is the case that especially when they are in a
stressful situation, people will rely on and refresh ethnic and national
stereotypes.
64
A set of clichés would form a stereotype, a set of stereotypes would constitute a
prejudice and a set of prejudices constitutes the image of enemies or friends
(Beller, 2007, p.297). By attributing a positive and negative value to the other’s
behavior in relation to ours, we define the image of the friend and of the enemy.
This is also a way to strengthen one’s own identification from a regional or
cross-border perspective (Bolten, 2007; Beeler, 2007).
Although the word stereotype brings negative associations and has a pejorative
meaning, it provides the elements for determining group differentiation or as a
justification towards some situations in inter-cultural relations (Turner & Oakes,
1989; Macrae, Stangor and Hewstone, 1996; Jost & Banaji, 2004).
In this study we are looking at group/ethnic/national rather than individual
stereotypes.
Some authors like Marco Cinirella (1997) note that besides the fact that it is
impossible not to stereotype, the reason some people like to deny it, is that using
them might give the impression of being old-fashioned. Nevertheless,
stereotypes and prejudices are still important social phenomena, “even if they are
increasingly denied by those who rely on them” (Cinirella, 1997, p.51).
Soeters and van Twuyver (1997), Fant (1997) and Rezende (2008) point out
some main social functions for stereotyping:
Social causality which is the search for a social group which can be held
responsible for a certain socio-economic situation or outcome;
Social justification and refers to the creation of stereotypes for a specific
group in order to justify actions taken towards them, for example, the way
colonialist nations have stereotyped the colonized populations in order to
retain power for decades (Soeters & Twuyver, 1997);
Social differentiation, which is a groups’ self-stereotyping in order to create
and maintain positive distinctiveness/differentiation from other groups;
Sense of belonging in the case of immigrants living in foreign countries,
where stereotypes become a represented value of a national identity
(Rezende, 2008).
65
Stereotypes as means to reflect and confirm a cultural belief (Fant, 1997).
A group can reject or embrace their associated stereotypes, but either way they
negotiate such images in the process of elaborating their identities (Rezende,
2008).
They can also be manipulated by different groups through the mass media to
include positive associations about their own culture and negative ones about
those defined by these national, political or ethnical groups as “enemies”. An
example is the espionage movies commercialized during the Cold War when
several stereotypes about the Russians were constructed and communicated (by
the Americans) or the constructed associated images of the Middle Eastern
Countries (Said, 1979; Macrae, Stangor and Hewstone, 1996).
In Latin America, the two-sided way the story was told, first from the
perspective of the colonizer and later from the point of view of the former
colonies, formed the caricature of both parties, and established stereotypes
which are very well alive in the collective mind (Cinnirella, 1997; Pratt, 2008;
Rezende, 2008).
Colonialist nations who went to the “yet unknown continents” and after the first
attempts at conquering them, recreated the history of what they have seen in line
with their expansionist plans, in general portraying the other (local population) as
naïve, and lacking knowledge and information, creating a set of colonial
predicaments and constructs which have become the main vocabulary used by
successive writers when they referred to that specific country (Said, 1979; Riez,
2007; Pratt, 2008).
In the case of former colonies, building a national identity involves a whole set
of de-constructing the past, especially the dependency relationships with a
foreign culture, defining its own principles and, most of all, building a common
future. This is a process of detachment from the whole colonial syndrome.
At the beginning their identity and self-image was determined by the colonizers
and whatever has been “imposed” will then be internalized, rejected, adapted or
avoided. This debate about identity, nationality and differences and the process
66
of defining them, has been named postcolonial phase (Fausett, 1987; Dirks,
1992).
The post-colonial is a meaningful concept when it refers to a process of
detachment from the whole colonial syndrome. It has to do with power
structures, hierarchies and the binary views and therefore it is not a time specific
event and it can last for several decades, centuries after countries have declared
independence (Shohat, 1992; S. Hall, 2002).
Post-colonialism is (or should be) a descriptive and not an evaluative or a
depreciative term (Barker, Hulme & Inverson, 1996) nor an excuse used by
groups to search for international cooperation funds. It seeks out areas of
hybridity and trans-culturalization, which are aspects particularly relevant and
that in a way led the processes of globalization (Bhabha, 1994; Hall, 2002, Riez,
2007).
As pointed out by Janos Riesz (2007, p.402) the post-colonial studies and
discussions main subjects refer to: “universality and difference, representation
and resistance, nationalism, hybridity, indigeneity, ethnicity, race, feminism,
language, the body and performance, history, place, education, production and
consumption, Diaspora, globalization, environment and the sacred.”
Edward Said, one of the classics of the post-colonial, has explored stereotypes
and clichés and how they are formed by political interests from the West,
arriving since the period of imperial conquest. The preconceived image of the
other, in this case of the people from the Middle-East, and how they are
represented through a distorting lens in paintings, literature, movies, and news
media are reported in his book Orientalism (1979).
Said calls orientalism to the process of proactively building the perceived image
of the Middle Eastern countries. It aims at the creation of an ideal other for
Europe and the United States and by defining opposing binary references, it
creates and strengths the West identity.
67
Said brings up the power of discourse and the pre-defined elaborated vocabulary
(words and attributes) and messages which must be used and end up perpetuating
the same prejudices and racist clichés in the orientalism discourse.
In narratives, when telling about ourselves and defining our identity there is a
“tendency to stigmatize others” (Fausett, 1997, p.133) and this could be both
intentional (to show power control) or not (in response to one’s own cultural
background and life experiences).
An image of the other is created in comparison to the self-image in order to
legitimize western values and interests for the westerners and to validate
interventions in the other cultures and societies. This is why some authors defend
the point of view that rather than Orientalism, Said’s study was in fact
Occidentalism as it analyzed image elements from a Eurocentric point of view
(Frenkel & Shenhav, 2006).
Homi Bhabha (1994) who refers to the post-colonial as a “in-between” space
where and when both individual and social groups go through a process of
(re)defining their identities and recovering the regional culture and historical
aspects.
On the influence of travel books in a postcolonial world of global contacts,
authors like Pratt (2008) and Clifford (1997) make a distinction between
“explorers”, “travelers” and “tourists” in their way of seeing, behaving,
understanding and reporting other cultures. This also has to do with the crosscultural experience and how much one questions his own identity while traveling
places.
In the movie The Sheltering Sky, based on Paul Bowles’ novel published in
194973 and adapted by Bernardo Bertolucci in 1990, an American couple,
originally from New York, travel to the North African desert and by arriving
there make a distinction between a traveler and a tourist.
73
Paul Bowles lived for 52 years in Tangier, Morroco.
68
A tourist is someone who arrives in a country and knows he will go back home.
Travelers do not know whether they will ever go back, as this was the case of
Bowles himself, who lived for 52 years in Morocco.
Pico Iyer, author of travel reports including the Video Night in Katmandu (1989),
in an interview with Kati Stammwitz in 1997 as part of her research about how
travel book writers understood post-colonialism, stated that:
“I might say that the tourist is someone who stays in a horrible hotel, while the
traveler is one who stays in a horrible hotel and finds something beautiful or
diverting or curious about it; that the tourist sees places through the lens of his
camera where the traveler tries more to disappear into the scene himself.”
Extending this distinction between travelers and tourists, to the situation of
international trade, there is also a difference between the traders who have
visited or lived in the producers’ country and those who only know about it from
books or other people’s references. The same applies to the case of corporate
expatriated executives or to exchange students and the way they approach topics
related to the countries where they have worked and lived as they return to the
regions of origin.
69
3.4
Brazil Hetero-Image
Regarding Brazil today, the diversity of cultures and ethnicities, the different
socioeconomic conditions, the perception of the ”exotic other” (tropics),
carnival, soccer, bossa nova and bottox, all composing elements of the country’s
image of savoir-vivre.
The discussions about the Amazon, the democratization process, economic
stability, the internationalizing companies, and the left-wing government, among
other image elements, form a complex mosaic which may create a dual
perception for those living outside the country.
The purpose of this chapter is not to look at how Brazil was portrayed in the
colonial history and travel books, but rather to bring some relevant examples of
the origin of the stereotypes related to “dealing with indigenous people”, “the
tropical paradise” and ‘when yes means no”.
3.4.1 Indigenous People & The Tropical Paradise
The early travel passages
One of the first set of stereotypes related to Brazil starts with what can also be
considered the first traveler’s report from Brazil – the letter sent by Pero Vaz de
Caminha to the king of Portugal, as he arrived in the country on the first of May
of year 1500.
It establishes a stereotyped image of the indigenous local populations as being
friendly, peaceful and offering goods for the Portuguese who had just arrived.
There was also an exchange of hats (from the Portuguese) for arrows (from the
indigenous), which correlates with the image of the exchanging of mirrors,
which is still very strong in the mind of some northern buyers in relation to trade
with southern people.
70
In the next paragraphs I present some excerpts of the letter by Pero Vaz de
Caminha74 as well as a few comments about them, in order to illustrate how
Brazil was depicted at that time75:
“Their features are brown, even a bit red, with good faces and noses, wellmade. They walk around nude without any coverings. They don’t seem to think
it more important to cover up their genitals than their faces.”
“[...] Bartolomeu Dias walked among them and they didn’t bother him, much
less wish to do him harm.”
In the stories of the historical episodes, the populations in the New World were
pictured as being less intellectually qualified (Cinnirella, 1997; Rezende, 2008).
In the case of the first report about Brazil, as the self-pictured “brave”
Portuguese conquerors were about to leave, instead of taking some of the
indigenous people with them, they left some Portuguese behind, as they believed
it would be easier to have someone in the new land learning about it to then
report back, rather than taking two or three indigenous people who did not speak
the language and that it would take them a long time to do so.
“[...] and that better and much better information about the land would be given
by two men of these whom we left behind than they would give if we took them
because no one would understand them. Nor would they easily learn to speak to
know what to say.” 76
From this set of early travel reports, comes the romantic myth of the good savage
which has two main meanings; the first is that the people from the New World
were naturally good and that civilization (Europeans) installed hatred and
fighting.
74
Pero Vaz de Caminha. Carta a el-rei dom Manuel sobre o achamento do Brasil. Introdução
atualizada do texto e notas de M. Viegas Guerreiro; leitura paleográfica de Eduardo Nunes. Lisboa,
Imprensa Nacional, 1974.
75
76
71
The second is that these people were peaceful, nice, naive and willing to work
for the conquerors. This was the first collective image that Europeans had about
Brazil in the sixteenth century (Baechler, 2010).
Early travel narratives reflect the ideas or views of those times and shall be
evaluated bearing this time and social values in mind (Fausett, 1997),
nevertheless colonialism and the post-colonial were always about different ways
of “staging the encounters” (S. Hall, 2002). In this sense, the neocolonial
predicaments are set in the early travel narratives which, as stated by Pratt (2008,
page 8): “account for conquest and domination told from the invaders’
perspective” and created stereotypes which influence people’s perceptions up to
today.
The French Franciscan priest, Andre Thevet was one of the first to draw
illustrations from Brazil, after he traveled to Rio de Janeiro in 1555. His
drawings were based on what he saw during an only ten days-long trip, as he got
ill and had to return to France, as well as stories he heard of other people who
had been in Brazil.
The set of illustrations include a women’s ritual to welcome a traveler as well as
scenes of cannibalism77, which was then an attempt to change the stereotype
from the nice indigenous people, to the threat of ending up being cooked by the
tribes, as a form of warning message for other conquerors who would be willing
to also adventure to the new land and to show that the local population was
ignorant and that they needed civilized Europeans’ intervention to be able to
promote peace and to survive. This is when the Brazilian maps subtitles changed
from the Parrot Land to the Land of the Cannibals (Baechler, 2010).
These European travel stories and illustrations where the local communities were
pictured as cannibalistic savages, were also a way to legitimize their intervention
(including the religious one) and domination over the people from the New
World and worked in favor of building an image of the local populations not
77
In Gordon collection. Available at
http://www2.lib.virginia.edu/rmds/portfolio/gordon/travel/thevet.html, accessed on May
26, 2011.
72
being able to search for other activities because they were “lazy” and could not
govern themselves (Barker, Hulme and Iverson, 1996; Pratt, 2008).
This image of men-eaters was reinforced by Hans Staden, a German soldier and
mariner who joined an expedition to South America in 1548 and in his second
time in Brazil was kept as a prisoner by a group from the tupinambas indigenous
tribe.
When Staden managed to return to Europe after this second stay, he wrote very
detailed reports about this indigenous group, their traditions and the cannibal
ceremony entitled Wahrhaftige Historia und Beschreibung ener Landtschafft der
wilden, nacketen, grimmigen Menschfresser Leuten in der Newenwelt America
gelegen, better known as The TwoTtravels to Brazil. To make his narrative
trustworthy, editors have included illustrations of the cannibal rituals, picturing
Staden as one of the protagonists (Raminelli, 1996).
The two travels to Brazil book is an excellent example of the issues that may
come during the writing of travel expeditions or travel books. In the case of Hans
Staden, in his story telling he tried to describe the situations which he had lived
and observed with as much detail as possible, mentioning the names of the local
people with whom he met during his stay.
However there are other issues that one may take into account (Baechler, 2010).
The first relates to language, as Staden reported in German the conversations he
heard in Tupi, this raises questions about how well he understood the structure of
this local indigenous language.
Looking at language as a social phenomenon, the translation of a narrative to a
foreign language poses the challenge of finding the words that would have the
same meanings and that would promote a similar understanding and
interpretation by people with different world views (Ribeiro de Souza, 2004).
The second one has to do with religious background since he valued and
criticized the supposed cannibal ritual from his perspective (Barker, Hulme and
Iverson, 1998; Whitehead, 2000).
73
According to Darcy Ribeiro (1995) along the tupinambas ritual, only those
enemies that were courageous and did not fear death would “deserve” the
sacrifice.
In the Brazilian post-modern phase, as a national identity detached from the
Portuguese and colonial heritage was being processed and built, the author
Monteiro Lobato had a key role in starting to tell the story from a local
perspective and as well as to raise awareness about the true Brazilian cultural
roots based on folk tales from the countryside. In his children’s book collection
called Sitio do Pica Pau Amarelo (The yellow woodpecker), which was the name
of the farm where the stories took place, Lobato tells in a soft and accessible
language the story of Hans Staden and together with it, the history of Brazil.
In the As aventuras de Hans Staden (The Adventures of Hans Staden, 1927) the
story of the adventurous German hero is told in the form of a narrative in the
“voice” of grandmother Dna Benta, to her grandchildren. Afterwards Monteiro
Lobato writes another book entitled Caçadas de Pedrinho e Hans Staden (Little
Peter’s Hunts with Hans Staden, 1933).78
It was only in the eighteenth century, when the Portuguese royal family moved to
Brazil, that the discourse changed to portray the Promised Land. It was in this
period that the Portuguese king, Don Joao VI, sponsored a French Mission with
artists to produce paintings and illustrations of the uses and habits of the
Portuguese court and the royal family.
The most famous were produced by J. B. Debret who lived in Brazil from 1816
to 1831 and who upon his return to France published the book Voyage
Pittoresque (Baechler, 2010). He is considered one of the most important
reporters of slavery in Brazil and the living conditions of the African people. The
hierarchic relations are also made clear in his paintings.79
78
Editora Globo launched a new edition of the ‘Aventuras de Hans Staden’ in the form of a comics
book in 2009.
79
In this sense, one of the most representative paintings is called Um jantar brasileiro (A Brazilian
Dinner), where the white woman is feeding the children under the table while other ‘employees’
serve both her and her husband.
74
It is impressive to note that much of the image associations’ one nation has about
another, have been perpetuated since the times of the empires and the
expansionist wave; and how the colonial images were constructed.
The “new” travel guides and other media
There is a clear parallelism between the first travel narratives from the sixteenth
to the eighteenth centuries and the contemporary travel or culture shock books. It
is the case of many of these books that comparisons are over-exaggerated and
help reinforcing and perpetuating long existing stereotypes and clichés related to
some countries as attempts at explaining their culture.
One example worth mentioning is Kultur Schock Brasilien (Goerdeler, 2008), a
book in its fourth edition. The first chapter is entitled Das Papageienland (the
parrot land) as a reference to the sixteenth century maps where Brazil was
referred to as Parrot Land and it overflows with stereotyped images of Brazil and
contributes to their perpetuation, especially in the German-speaking world. One
of them is about the country of the eternal party and that people are always
celebrating something, in the Es gibt immer etwas zu feiern chapter, and shows
there have been no corrections to the past travel books.
Or the picture entitled Liebe macht farbenblind – jedenfalls in Brasilien (‘Love
makes people colorblind – at least in Brazil’) which could both mean that
Brazilians in general are less racist than other nationalities, or it is indeed a racist
statement in a traveler’s book.
Although the intention of such a book is to show the shocking points in terms of
cultural differences, in comparison to one’s own country’s behavior and culture,
in the specific case of this Kultur Schock Brasilien.
Other media that strongly reinforce stereotypes are the international sports
opening events like the Olympic Games, the World Cup, or the Hollywood
movies like, for example, the one called The Tourists (2006) that tells the story
of three young Americans that travel to Brazil for a dream vacation in the tropics
with a beautiful landscape and open minded friendly people. At the beginning of
their trip, their bus has an accident and they end up on a beach and meet a
75
Brazilian who invites them to have a party at night. The next day as they wake
up in a deserted beach with no luggage, money or documents, they realize they
had been given drugged drinks.
The story moves on with a series of scenes of secret places where stolen
belongings and documents from foreigners are kept and culminates in a moment
when the tourists get kidnapped to have their organs given to poor people from
Rio de Janeiro who need a transplant, in a kind of revenge for the organs that had
been taken from Brazilians by other foreigners.80
In summary, this movie is full of clichés and negative stereotypes which go from
beautiful beaches, to robbery, kidnapping and organ trafficking. The internal
repercussions were very negative, and there were concerns about its impact on
people deciding on Brazil as a tourism destination.
As pointed out by Alexander Busch81, a German correspondent based in Brazil,
during an interview to the Revista da Cultura (ed. 42, Jan. 2011):
“In Central Europe there is still this image of the football country and the beach,
typically tropical and happy, but without economic and political weight […] one
example is the Rio de Janeiro case. The state grew economically in the last five
years, becoming a very important pole in the country, but from there (referring
to Europe) people only like to hear about carnival and violence.”
When talking about how nations can proactively build and influence their
projected image, it is important to note that the Brazilian Government is also
responsible for the continuity of some stereotypes – carnival, Rio, beautiful
women at the beach, football and can be seen in many situations like its
presentation in trade fairs or during the competition to host the Olympic Games.
80
http://oglobo.globo.com/cultura/mat/2006/12/01/286862215.asp accessed on June 10, 2011.
Alexander Busch, German journalist based in Brazil (Salvador, Bahia) since 1992 and
correspondent for the Wirtschaftswoche and Handelsblatt. Busch is also author of the book
Wirtschaftsmacht Brasilien: Der gruene Riese erwacht. Carl Hansen Verlag: Muenchen, 2009.
81
76
The table below summarizes the most frequent image constructs about Brazil
along time, based on the pre-selected historical, travel literature, illustrations and
the mass-media.
Time period
Early Travel reports
(16 th Century –
Portuguese arrival)
Defining the new land
ownership (18th Century –
French, Portuguese,
Netherland )
Portuguese royal family
moves to Brazil (19 th
Century)
Immigration from EU and
Japan
(20 th Century)
Contemporary (21st
Century)
Main Country Hetero-Image
Constructs
• The lost paradise / Eldorado
• Local people are naïve, peaceful, lazy,
cannot decide for themselves, need
‘civilized world’ intervention
• Parrot Land / Natural resources
• Local people are cannibals
• Cannibals’ land
• Xenophobia
• Myths of the tropical forest
• Hierarchical structures
• Slavery
• Country’s formed by Afro, Indigenous
and White ethnicities
• Untouched nature
• The promise land
• Natural Resources (gold and
diamond), job opportunities (coffee
and sugar cane farms)
• Untouched nature
• Escape place for EU (no rules, once can
easily hide)
• Xenophile, Carnival, favela, ethnicities'
melting pot, eternal party
• Copacabana beach, semi-naked women,
sexual tourism destination
Figure 6: Brazil’s constructed image associations from early travel
letters, culture shock books and Hollywood movies.
77
3.4.2 The Foreigner in the Brazilian Imaginary & When Yes Means No.
In Brazil, there is a tendency to search for a reference model which comes from
the outside, external to the local reality. Some authors call this fetishization of the
foreign (Slater, 1997) or being fixed on the image of the foreigner (Caldas, 1997),
which is grounded in historical, cultural, economic and institutional factors.
In the historical dimension, it starts when the Portuguese colonizers arrived with
exploratory and extractivist objectives with no interest in keeping or creating a
local culture. Later, other waves of foreigners went to Brazil, but in all cases
without promoting a local reference, and most often attributing high importance
to all that came from outside the country.
In parallel, there was a socio-economic link which moved from the colonial
period with the Portuguese, a time when several cultural attributes were ascribed
and implemented, to neo-colonial times related first to the London-Paris route
and which continued then in relation to the North American reference. As Caldas
(1997, p.79) recalls: “this means that there was no negotiation about a model of
society, but the pure and simple truculent transplant of the references brought
from Europe.”82
This “being fixed” in the image of the foreigner brings two main impacts on the
Brazilian culture. The first is that whatever is produced locally is perceived as
being of lower quality. Imported products are “much better”.
Some simple examples include the preference for Miami as a vacation
destination when many have never been to the Amazon or the Pantanal, to some
more embedded ones like the knowledge and management references brought
mostly from the USA and, in a second place from Europe, and then Japan for
organization and method.
The second one is the often-mentioned Brazilian xenophily and that people from
other countries are easily integrated into the local society. While this can be seen
as a positive behavior, it brings two main drawbacks: first that one rarely values
the internal human, cultural and natural resources; and second, when in an
82
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intercultural relation with people with a direct communication pattern and in a
foreign language, it is often the case a Brazilian will try to prevent conflict or to
avoid challenging an idea proposed by a foreigner, even if they do not agree with
it. This also includes the case of external audits and certifications for social
labels.
The loosing face syndrome, together with the over-valuing all that comes from
‘outside’, the collectivist nature, the indirect communication style and a
preference for avoiding conflict results in the stereotype that most Brazilians
“say yes when they mean no”.
In fact what is going on is that Brazilians have a difficulty in saying “no”, and
connects to the image element of the “cordial” man no and they will find more
polite and indirect ways of doing so like saying “I will check and get back to
you”, or by promising one activity can be done in the agreed-upon time, when it
cannot, or by simply not giving feedback (Novinger, 2003).83
3.5
Switzerland Hetero-Image
This chapter about Switzerland’s hetero-image is mainly based on a
“foreigners’” image perception, as well as a study performed by NBI – the
Anholt – GfK Roper Nation Brand Index.
Schweiz, Suisse, Svizzera, Svizra or Confoederatio Helvetica or Switzerland, is a
landlocked country where four languages are spoken – Swiss German, French,
Italian and Romantsch – with a population of 8 million people living in 26
cantons which have their own dialects and well-defined cultural characteristics.
Due to the factors of the several languages or different traditions, what unites the
Swiss is a shared political history (Schnyder & Beeler, 2007), which makes the
national bonding elements different from other countries in Europe.
Early representations of the idyllic paths through the Alps, clean water and fresh
air described in English travel books or by poets of the 18th century like Albrecht
83
The “when yes means no’ stereotype brings the downside that in several international commercial
situations the foreigner partner will not expect a “no” and will not take it as a definitive answer from
their Brazilian counter-part.
79
von Haller (Die Alpen, 1729) and Salomon Gessner (Idyllen, 1756) and the
tradition of being a place for people to convalesce, an attribute powered by the
famous dish of the Birchermuesli (a mix of grains with fruits) developed by the
physician Maximilian Bircher-Benner for his hospital patients, the image of a
breath-taking beautiful mountainous region strongly contribute to Switzerland’s
image attributes (Schnyder & Beeler, 2007).
The Helvetic Confederation was an alliance for cooperation and especially for
free trade and the protection of the routes in the region of the Central Alps. A
self defense pact against neighboring powers began in 1291 when the Uri,
Schwyz and Unterwaldern cantons signed the Federal letter.
It is from these early times that foreign literature extracts images of Switzerland
stressing the military trade and, for a while, the word Swiss was a synonym for
mercenaries. The most important text which reflects this is Schiller’s Wilhelm
Tell published in 1804.
Another relevant literary character is Heidi written by Johanna Spyri in 1880,
which also contains elements of the trope of melancholic home sickness
(Schnyder & Beeler, 2007), and is a strong image element of the Alps to the
point that it gets expanded to foreign product brands that would like to convey
the message of Swiss beauty, healthy and pure air.
The Swiss Government pro-actively manages the country’s perceived image,
both by internal and external target audiences. They have developed a clear
brand strategy with the attributes they would like to be recognized for, and that
they see as reflections of their self-image under a program called Image
Switzerland.84
The pre-established country brand attributes includes self-determination, a secure
future, culture, country and people, science and economy. All Swiss agencies
outside the country must follow the pre-defined set of designs and messages.
84 http://www.image-schweiz.ch accessed on September 26, 2011.
80
For official and tested traces of the country's external perceived image, the NBI –
The Anholt – GfK Roper Nation Brand Index can be a good reference. The NBI
measures and compares the brand reputation of 50 countries in six categories:
a) Exports, which looks at the effect of the country of origin in the decision
making about a specific product;
b) Governance, which has to do with the competence and honesty of the country
government as well as how they respect their citizens and deal with human and
environmental concerns;
c) Tourism and how much the specific country is mentioned as a preferred tourist
destination based on natural beauty, historic buildings and monuments, urban
attractions and vibrant city life;
d) People, which is an overall assessment of whether visitors feel welcome when
in that country, as well as whether they would like to have a close friend from
that specific nation;
e) Culture, which has to do with the country’s heritage and cultural expression
from music, films, art and literature and excellence in sports;
f) Immigration and Investment, which is a country’s power to attract talent to
live, work and study, based on perceived economic prosperity and equal
opportunity, and also on the perception of place with a high quality of life
(Nation Branding, 2009).85
According to the NBI, Switzerland is the country which ranks first in terms of
perceived image of being competently and honestly governed, and that behaves
responsibly to help reduce world’s poverty. In the case of perceived image, the
associated words to governance were reliable, trustworthy and reassuring. The
study also mentions that for both Switzerland and Austria there were no country
image associations to the words dangerous, corrupt or unstable.86
85
www.nation-branding.info accessed on September 26, 2011.
http://www.imageschweiz.ch/fileadmin/user_upload/pdf/d/Image_der_Schweiz/Switzerland_2009_NBI_Report_08-312009.pdf accessed on September 26, 2011.
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The country did not receive any mentions for these three terms. An overall
statement from the brand expert responsible for the nation branding study is that:
“Switzerland lives up to the very high standards that world opinion expects from
the country in terms of its commitment to reducing and mitigating climate
change” (Nation Branding, 2009, p. 10).
In terms of people ranking, which includes one’s perception of feeling welcomed
in that country, or having a close friend or hiring an employee from that origin,
the words associated with the Swiss were hard-working, skillful, honest and rich.
As for the exports image categories, the words associated to Switzerland include
mostly banking and high technology as top of mind, followed by food and
crafts.87
3.5.1 Being Neutral
Neutrality has always been part of the Swiss culture in the political sense. This is
an element of the "national identity" as well as of the hetero-image.
From the political stand-point, there is a large difference between being
recognized as neutral and claiming to be so. In 1815, Switzerland had its
neutrality recognized at the Congress of Vienna. From a historical perspective,
despite its close geographic position to Germany, during the 2nd World War the
Swiss managed to get the support of the German empire without being part of it
or becoming an ally (Weibler & Wunderer, 2008).
Dicon Bewes (2010) associates the Swiss degree of detachment to a need to
define their identity while being landlocked, sharing borders with France,
Austria, Italy and Germany and by pursuing the north-south route over the Alps.
This, together with the feeling for cooperation as traders crossed the Alps, would
explain the Swiss conflict between detachment and cooperation (Weibler &
Wunderer, 2008, p.271) or between xenophobia and cosmopolitism (Schyder &
Beller, 2007, p.252).
87
http://www.imageschweiz.ch/fileadmin/user_upload/pdf/d/Image_der_Schweiz/Switzerland_2009_NBI_Report_08-312009.pdf accessed on September 26, 2011.
82
The nation’s position of not joining the European Union served to consolidate
the hetero and self-image of neutrality and as “an autonomous confederacy with
direct, egalitarian democracy and which accommodates religions and languages”
(Schyder & Beller, 2007).
Switzerland did not join the United Nations until 2002, although they played an
active role, and many of the international institutions are based there as the
United Nations headquarters agencies such as the World Health Organization
(WHO), the International Labor Organization (ILO); the Red Cross, the World
Trade Organization, including hosting the annual World Economic Forum in
Davos, among others.
They have also actively cooperated in different development aid programs since
the early 1950’s. In 1995 Switzerland was a member of 64 intergovernmental
organizations and 2,600 international non-governmental organizations
(Schneider, 1998 cited in Chhokar, Brodbeck, House (eds.), 2008, p.255) which
gives the country a leading position on the list of the OECD (Organization for
Economic Co-operation and Development).
In counterpoint with the position of neutrality and trustworthiness, there are
several scandals related to poor governance and bribery in the Fédération
Internationale de Football Association (FIFA) and the International Olympic
Games Committee (IOC), both based in Switzerland.
At FIFA, one of the most up to date corruption cases refer to the TV
broadcasting rights of the World Cup. Their current president, Joseph Blatter, in
this position since 1998, the former president, Joao Havelange, and the CBF
(Brazilian Football Confederation) former president Ricardo Teixeira, are
enrolled in the investigation process opened by the Swiss tribunal of Zug.
From cross-cultural communication perspective, the Swiss are stereotyped as
very reserved people, an orderly society, where people speak low and non-verbal
communication or expressions of feelings are more controlled (Bewes, 2010).
Caricaturists work based on the identification of nations and people perceived
image to characterize them. They use stereotypes in order to be able to give a
83
fast, catchy, meaningful message. The cartoon below illustrates the perceived
image of Swiss people as being neutral.
Figure 7: Comic Strip: (translation)‘Halt! Who goes there? Friend or
foe?’ ‘Neither one, I am neutral’. …Another guy from Switzerland.’88
Bewes (2010) brings up some question marks about Switzerland’s ability to deal
with and accept large immigrant population outside the traditional neighboring
countries, as, according to him, “no empire meant no colonial immigration” (p.
102).
From the perspective that the Swiss population is made up from the Helvetic
Confederation with Italian, German and French backgrounds, and is used to
speaking at least three different languages, and that the foreigner represent
22.4% of the total population89, 90% of them from European countries, this
statement may sound unreal.
Nevertheless if a comparison is made to England and the large communities
formed by people coming from India or China; or Germany with mid-east
populations or Spain with several groups formed by Latin Americans, dealing
with foreign groups in the country is something difficult to be accepted by the
Swiss.90
88
Chris Browne’s Hagar comic strip published in the Folha de S.Paulo newspaper, the largest daily
newspaper in Brazil, in May 2010. The English version follows the original strip text which was first
published in October 6, 2009 and is available at
http://www.thecomicstrips.com/store/add_strip.php?iid=39326
89
Population and household statistics. Available at www.bfs.admin.ch accessed on February 2, 2011.
As the ‘minaret’ voting in 2009 showed. But this can also be seen as an overall European tendency
to close doors to foreign workers as a side effect of the current economic crisis.
90
84
3.5.2 Overly punctual
Time is important for the Swiss people who are considered ueberpuenktlich
(overly punctual) and stereotyped as being time-obsessive, with the country
running like clockwork. They are recognized world-wide by their precision and
punctuality.
This is a characteristic which is not only a hetero, but also part of the self-image.
The Swiss tend to manage activities following a sequential timeline, and if we
take the GLOBE study on cultural dimensions, they rank first when it comes to
future orientation. The stable socio-economic life, the pension fund system and
the mobility infrastructure provide them with the possibility of a detailed
planning of the day. In addition, it is not only a matter of producing the worldfamous Swiss watches for their precision and life-long quality, but also being
ruled by time. Time is considered a sacred element and there are watches in
churches and even cemeteries.91
Another example of Swiss punctuality is the well-managed public transport
system, having precise time-tables.
From a perspective of self-image the Swiss soft-drink company Rivella has
developed an image campaign with a German humorist, using elements of
Swissness to position their product in that country. The campaign’s main theme
is: Rivella. Refreshment with a Swiss accent.92 The main target audience is the
German consumer market, to whom one of the most striking image elements
related to the Swiss people is their “accent” when they speak the Swiss German
dialects. The campaign plays with other Swiss external image elements: The
Swiss are overly-punctual. They drink before they are thirsty.93
91
Friedhof Schwandenholz in Zurich has got a tower with a clock on its top.
92
The campaign is available at http://www.rivella.de/#kampagne/uebersicht
93
"Schweizer sind ueberpuenktlich. Die trinken, bevor sie Durst haben." (Translation by the author).
This campaign shows Rivella’s open minded approach and sense of humor when applying the Swiss
hetero-image attributes in their communications to consumers in Germany.
85
3.5.3
Banks and Wealth
For foreigners, Zurich brings to mind the image of grey-suited bankers (Bewes,
2010). Switzerland indeed has one of the highest GDP per capita and two of its
cities rank in the top three for quality of life. During an interview with the
director of the Swiss-Brazilian Chamber of Commerce, he mentioned that, the
overall main perception is that all Swiss are wealthy people.
The fact that this country is not only pictured as ’the banking’ place in popular
books and movies, like the DaVinci Code, but indeed hosts the headquarters of
several large international banks, holds a neutral position, a stable currency with
a certain autonomy from the Euro or Dollar fluctuations, and account secrecy,
consolidates Switzerland as a choice for those looking for a safe, trustful and
reliable place for keeping their wealth for long periods of time.
Together with these facts and image associations comes the attributes of privacy
and of being discrete.
3.5.4 Orderly society
An orderly society is the result of an interconnected and complex system which
includes elements that go from the on-time and perfectly connected transport
system, the overall cleanliness, waste disposal rules, the fact that there are certain
months of the year when one can move houses and the influence of the military
life.
Being “orderly” means there is a complex set of systems and rules which is not
only followed by everyone, but also that each person observes the others
behaviors and all are expected to comply, and they usually do (Bilton, 2008).
There are many stories about this orderly behavior. A very representative one is
the Waschkuechenschluessel (the laundry room key), written by Hugo Loetscher
(1988), a Swiss novelist, journalist and travel book writer. His story ironically
criticizes the democratic behavior of the Swiss people as represented by their
interactions in the laundry room and their rights and duties while in possession of
its key.
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In most buildings in Switzerland there is a central laundry room shared among
all its inhabitants with a timetable of when each flat has the right to take the key.
In the room itself, there is a set of cleanliness rules, and one must make sure to
leave it in perfect order. Behind this, there is a whole set of interactions which
range from neighbors negotiating exchanging days, to offering them during
vacation times, which is perceived as a gentle gift, to complaints about the
room’s cleanliness or of having forgotten the clothes there beyond the allowed
time.
Whether the Waschkuechenschluessel is a myth or not, most people (expats or
not) have a good story about their experiences in the shared laundry room while
living in Switzerland.
Another element that adds to the image of being an orderly society is the amount
of paper work required for most activities. Every person must apply in the
Gemeinde (community) they live in and if they move to a different location or
decide to share a flat with other people, this must be reported both to the
community and the flat rental management company. Bicycles must have an
early insurance sticker. And there is insurance for everything, even against losing
keys. This connects to the Globe in-depth study of 25 societies in which
Switzerland is in the top position in uncertainty avoidance “as is”.
This tendency to be highly prepared against uncertainty has a direct impact on
the willingness to take risks, which links to the level of innovation94 and amount
of entrepreneurial initiatives, as well as on the existence of many regulations and
the fact that the Swiss are overly-secured (Weibler & Wunderer, 2008). There is
however a clear self-perception that being risk averse is something that should be
overcome, as shown by the “should be” Globe study measurement, where
Switzerland has the lowest comparative score.
94
Innovation in the sense of not only “thinking” but also in “acting” and this explains a question mark
that might arise in relation to Switzerland’s high rate of registered patterns and Nobel Prize winners,
and although tending to be risk averse.
87
3.5.5 Stereotypes Germany – Switzerland
Although comparisons between countries that share the same geographic borders
are common and part of a process to define the self-image in face of the other,
the discussions about how the Swiss perceive the Germans and vice-versa, seem
to be more on the spotlight than those in relation to their other fellow-neighbors.
This tension in distinguishing the differences is visible based on the number of
culture-books about Switzerland written to the German target group, like the
Grüezie und Willkommen – Die Schweiz fuer Deutsche (Sitzler, 2009) and Der
feine Unterschied – Ein Handbuch fuer Deutsche in der Schweiz (Reihl, 2009)
and the Swiss SFTV program “Grüezi Deutschland”95.
In 2009, the Neue Zürcher Zeitung published the book Was ist schweizerisch?
(What is Swiss?) (Meyer, 2009), with 34 different views from artists to
politicians of different nationalities, confronting perspectives like the article by
the Swiss right-wing politician Christoph Blocher about the “typisch
schweizerisch” (typical Swiss), and another one by the German theater director
Matthias Hartmann about “what is typical atypical”. From Blocher’s ‘self-image’
point of view, “typically” Swiss includes: “being fast in decision making”,
“diplomatic” and “trustful” (Meyer, 2009, p. 31).
From Matthias Hartmann’s perspective, it is not possible to generalize what is
typical and, according to his experience while living in Switzerland, some of the
image association to the Swiss did not get quite confirmed in daily life, as for
example, the “being diplomatic”. On the other hand, he could experience the
country’s top of mind association (by Europeans) of Switzerland’s decision not
to be part of the European Union, as he exemplifies with a case of a letter
addressed to Switzerland which was returned to the addressee as he/she had
mistakenly included the information that country was in the European Union.
In the “Dear neighbor”96 letter, published in the Europe&Meonline magazine,
Andrea Buchschacher (a Swiss) writes about how Germans perceive
Switzerland, from the perspective of her Swiss self-image, what is afterwards
95
http://www.sendungen.sf.tv/gruezi/Nachrichten/Uebersicht accessed on December 2, 2011.
96
http://www.europeandme.eu/5brain/259-dear-neighbour accessed on December 2, 2011
88
replied by Christoph Delcker (German), on the image associations he believes
the largest amount of Germans have about Switzerland.
From the Swiss self-image perspective, Buchschacher brings attributes like
“cultural diversity” and of “grass-roots democracy” while her meta-image on
how Germans perceive her country includes: “Swiss are Germans with a strange
accent” and “the country’s outside position in relation to the European Union”.
From a German perspective, Delcker’s “diplomatic” reply was based on the
frequently mentioned country image attributes: “beautiful landscape”, “Alps”,
the big cities “Zurich, Genève and Basel”. He also brings one element of German
self-image which is “belonging to the European Union”.
An emblematic discussion about ‘image of the other’ between these two
countries is the German theater director Matthias Hartmann's interview to the
newspaper Tages-Anzeiger97 where he declared the Swiss as being
“hypocritical”. This statement was replied two days after in the same newspaper
in an article by Peter Mueller98 where it is stated that the Swiss readers
considered Hartmann a typical “arrogant German” and that his comments in the
previous interview were “anti-diplomatic”.
97
http://www.tagesanzeiger.ch/kultur/theater/In-Zuerich-wird-wahnsinnig-vielgelogen/story/20502079, published on June 4, 2009 and accessed on December 2, 2011.
98
http://www.tagesanzeiger.ch/kultur/theater/Matthias-Hartmann-der-grossspurige-Polterer-wirdZuerich-fehlen/story/14414887, published on June 6, 2009 and accessed on December 2, 2011.
89
4.
In this study, as we are looking at the image based elements that arise and
influence the intercultural trade relationship in Fair Trade, mainly the imagined
narratives and constructs of fairness as they offer “characterological
explanations” of cultural differences (Beller & Leerssen, 2007) and power play.
The process of creating a whole set of Fair Trade imagery aimed at calling final
consumers’ attention to the fact that their purchase preferences can influence the
way products are traded. This is achieved by attaching politicized and ethical
meaning to the communicated messages about product symbolic attributes. There
is also a move towards reconnecting consumer and producer, at least from the
first to the second, in line with a consumption trend of going back to the origins
of a more natural and hand-crafted product as a response to the times of massive
food production and GMO (genetically modified organism) food.
By critically looking at the key messages of Fair Trade, they bring different
forms of narratives following a post-colonial moment even in times of
“transverse”, “transnational” and “trans-cultural movements” (McClintock,
1995).
This is visible by the binary forms of the messages that have been communicated
in the last twenty years of the socio-economic development model – the here and
there (in the case of producers and consumers); the Global South and the Global
North (for the geographical divide); the most marginalized people from the
developing world and the buyers of the North power to offer better deals; the
good and bad (in many senses).
These image constructs involve both product functional, material and symbolic
attributes. The material and functional ones are represented by the tangible
characteristics and benefits (health, taste) and exist independently of the identity
of sellers and buyers. Symbolic attributes are not tangible and based on
emotional elements. They are mostly related to local culture, historic facts,
geographies (including all sorts of protected designation of origin) and
sustainability behavior or claims.
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These attributes are mostly signaled through trademarked corporate or product
brands (Goodman, 2004; Daviron & Ponte, 2005; Wood, 2007).
The symbolic attributes shape the image and establish icons of the exotic other
framed in the context of the agricultural plantation sites (Goodman, 2004; Dolan,
2010).
As a result, the external image of “the other”, in this case the small-holder
producers and their organizations, is the result of a representation of a “reality”
advocated by a social group based on their ideologies and interests and, not only
override the local reality, but also shape the expected behaviors and images of
the groups being represented (Brigg & Muller, 2009).
In the case of artisan and indigenous crafts, there are many actors that “create”
[and this word can be expanded to its meaning in the advertising world] the
meanings attached to them.
They are being constructed and communicated by those facing the consumer
market, either as a reflection of final customer belief or as a set of differentiating
parameters established by the industry or the retailer, which then requests that
the certifier guarantee such expectations are met in the field and met by
producers by including them in the audit list and process (Wilson, 2010).
To define the main constructs to be further developed in this theoretical session, I
took the statement introducing what the Fair Trade movement aims at and which
is available at the Fair Trade Foundation website99:
“Fair Trade is about better prices, decent working conditions, local
sustainability, and fair terms of trade for farmers and workers in the developing
world. By requiring companies to pay sustainable prices (which must never fall
lower than the market price), Fair Trade addresses the injustices of
conventional trade, which traditionally discriminates against the poorest,
99
http://www.fairtrade.org.uk/what_is_fairtrade/fairtrade_certification_and_the_fairtrade_mark/the_fai
rtrade_minimum_price.aspx accessed on June 29, 2011.
91
weakest producers. It enables them to improve their position and have more
control over their lives.“
4.1
The “Fairness” Construct
In intercultural relations, and in the case of a global “fairer-economic-system”
criteria and social certification labeling system, a relevant concept to take into
account is that of universalism and relativism, as ethical practices differ among
cultures depending on their set of beliefs and value systems (Evanoff, 2004;
Murphy et al, 2005; Scherer & Patzer, 2011).
Universalism assumes that there is a bottom-line set of values, a “metaethical”
and transcendent norm which applies for everyone in all cultures (Holenstein,
1995; Evanoff, 2004; Cortina, 2009). In the post-war period, there was a line of
thinking from positivist social scientists who argued that institutions and
procedures are universally applicable and that social engineering can transform
societies and lead them to modernity. In this sense, cultural explanations were
neither relevant nor part of the discussions.
Universalists propose to identify a set of “commonalities” with respect to the
beliefs and values of different cultural groups and try to create a common norm
for all. To arrive at a common set of ethical values, it is suggested to apply a
deductive method based on the principles of theology, metaphysics and nature
that outstand among the different cultural value specificities. A second option
would be to apply an inductive approach which would then ground itself “on
values common to all cultures” (Evanoff, 2004).
The drawbacks of the universal system are that it represents the domination of a
particular perspective and leads to an “unjustifiable” suppression of the pluralism
of cultures and forms of life (Scherer& Patzer, 2011); another one refers to
certification criteria, codes of conduct and law systems, and that any single
exception to the norm, will call the entire system into question.
Relativists, on the other hand, argue that norms, values, beliefs and rationalities
are relative depending on each particular group, and that cultural diversity should
simply be accepted and applied.
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The relativist main objective is to avoid ethnocentric approaches towards values,
in this sense, the people involved in cross-cultural relations should be aware of
the need to be flexible and respectful to the local cultural contexts (Evanoff,
2004; Martin & Nakayama, 2009).
There are two most common downsides to the relativist approach – the first is
that it leads to the conclusion that any other cultural value or norm should be
taken as it is, without much questioning; and the second is that by validating a
groups’ beliefs, it also authenticates some situations of discrimination.
And as pointed out by Martin & Nakayama (2009, p.35): “all ethical systems
involve a tension between the universal and the relative” and that in this sense, a
dialogical approach would provide the means for a constructivist process.
Through a self-reflexive analysis and the understanding of the other, it is
possible to come to a common ground (Habermas, 1989; Ulrich, 2008).
In this approach, the individuals involved become aware of what differs between
two cultural systems, and in general it shows a wider range of possibilities and
alternatives, which were not perceived earlier when people remained inside their
own value system (Bolten, 2007).
In the Post-War period and with the rise of the modern era between the 1950’s
and 1960’s, the Western way of living (social and cultural including arts), moral
(values) and management style (economic) were communicated as the new trend.
Those living in a different management model (including time and
environmental resource management) were declared as being “backward” and
“obstacles to development”. It was believed that these societies should go
through a transition period to be able to reach modernity (Slater, 1997).
From the corporate world perspective, in the process of globalization, several
companies had (and some still do) the expectation that certain management
styles and criteria would be true and apply to all, and that taking the local culture
and its concerns might be needed, but in a third or fourth level of importance.
93
The point is that this has not resulted in standardization, and universalist systems
have failed in many cases, especially those that have to do with human resources
as, for example remuneration schemes since cultural values shared by one group
can be rejected by another. There are also the companies that have tried to
implement single corporate culture programs but which have had difficulties in
achieving a true implementation, once people have different judgments on moral
questions according to their cultural background (Trompenaars & HampdenTurner, 1998; Bolten, 2009).
Fortunately, in some cases, there is an opposite movement taking place as the
increasing number of multi-cultural encounters has been leading to a higher
awareness of a cultural relativity and different moral traditions and convictions,
as part of a self-reflective ethical process (Ulrich, 2008).
J. Bolten (2009) and S. Rathje (2009), throughout their studies about corporate
culture, correlate the different phases of globalization to how organizations
adapted (or had to adapt) to models ranging from “multi-cultural” to
“intercultural”, and from “coherence” to “cohesion” in order to deal with
diversity in the workplace.
The studied timeframe for globalization went from the 1970s to the 2010s,
during which they have come up with three clearly defined phases:
Coherence (1970s to 1990s) which is an organization’s model to set a
common standard that would apply to the operations in foreign countries or
the individuals coming from cultures different from that of the head office.
This, in terms of diversity management, resulted in tolerance of variety;
Differentiation (1990s to 2000s) in which there was a fragmentation and the
codification of variety;
Cohesion (2000s to 2010s) through modularization and networking of
variety. Its dynamics include and preserve difference and, at the same time,
they aim at reaching a common unit. As defined by Bolten (2009, p.6):
“cohesion seeks consistency through the interaction of difference in
coexistence.”
94
The process of achieving cohesion is definitely more difficult than applying
coherence (Rathje, 2009), but it often leads to new forms of cooperation that did
not exist before and that at the end will have a special meaning to employees. It
is interesting to observe that some companies or certification bodies still apply
these one size fits all strategies and criteria.
In the case of Fair Trade, there is a whole set of cultural assumptions driving this
form of moral economy, in which the criteria are a way to ensure that the
“preached” ethical standards are effectively taking place in practice, either for
justification or for legitimacy. Being more specific, the label is an “institutional
means of reliability” and the certification is a “normative framework for social
legitimacy” (Keller, 1998; Bacon, 2010).
Michael Goodman makes a point about the universalist aspect of Fair Trade
which calls attention to the “unpractical” and “unrealistic” FLO world-view
which takes for granted that the concepts of “development”, “minimum living
conditions” and “care for the environment” apply for all – from producer to
consumer, in the same way and value criteria (2004, p.906):
“[…] fair trade suggests that a healthy environment, education, gender equality,
democracy, child welfare, and a minimum wage (of sorts) are universal human
needs across the physical, cultural, and economic spaces that separate eaters
and growers.”
This raises two points for reflection: the first is whether the ethical elements
which conform to a fairer trade system can be taken as universal and translated
into certification criteria and norms. The second refers to how much this set of
universal norms of a fairer system are, even if unconsciously, an attempt of
domination by the European and in a later stage, American cultural values,
prioritizing one particular world view over all others (Scherer & Patzer, 2011).
In addition, the setting of measurement devices, indicators, units and intervals is
a source of power (Daviron & Ponte, 2005).
95
The criteria and certification requirements involving social, economic and
environmental conditions in the end, pre-select the type of small producer
organization that will be supported (Dolan, 2010).
The pre-defined FLO standards and guidelines should not be developed or taken
as a universal set of moral truths, as stated in the sentence below in which nonconformity means that the “fair” element which is defined by those in the
countries of the North, according to a value orientation that follows a Western
ethics approach (Evanoff, 2004) is not being implemented and followed by those
producing countries in the South. The FLO-Cert Public Compliance Criteria100
specifies that:
“Compliance criteria are established by FLO-CERT to translate Fair Trade
standard requirements into verifiable control points that are evaluated in the
certification process to determine compliance with the Fair Trade Standard.
Non-conformity with Compliance Criteria is non-conformity with the respective
standard requirement.”
By looking at who defines “fairness” and how, this becomes a governance topic
as mentioned previously in the session about current challenges of the Fair Trade
system.
The criteria of “what fair stands for” are decided by the FLO member
organizations. According to the Fairtrade International webpage101: “the scope of
the Fair Trade Certification is decided at a General Assembly of all member
organizations and addressed in the minutes of the General Assembly.”
FLO’s full member associations are based in Australia, Austria, Belgium,
Canada, Denmark, Estonia, Finland, France, Germany, Ireland, Italy, Japan,
Latvia, Lithuania, Luxembourg, The Netherlands, New Zealand, Norway, Spain,
Sweden, Switzerland, UK, USA. There are also two associate members
(Comercio Justo Mexico and a marketing company in South Africa); and only
100
FLO-Cert Public Compliance Criteria published on January 20, 2011 and downloaded from FLO-
Cert website on May 10, 2011.
101
www.fairtrade.net, accessed in June 30, 2011.
96
three regional producers organizations represent all the 1.2 million farmers and
workers operating according to FLO-Cert standard.
We can look at such criteria as means for small producer organizations to
“improve” their organization’s set up or the care for the environment, as the
certification process promotes a self-evaluation of what is being required and
what is expected by international customers and final producers in terms of
product and process.
These fixed models supported by FLO certification criteria recall Latour’s (1986)
“immutable mobiles” or, objects that circulate across societies without changing
form and that at the same time have the power to transform the sites to which
they are applied.
The Fair Trade immutable mobiles cause tensions in the producer living mode
and their organizations daily modus operandi when they establish the cooperative
management model, define production standards, and dictate justice by defining
moral standards that may not be feasible to implement due to long standing
cultural norms. Below I present some examples of the FLO criteria which
directly impact small producer groups living modes.
The local hierarchical structures in relation to women inclusion which although
there are programs and funding specifically for gender empowerment, this
depends on the groups traditions, and are difficult to be overridden (Dolan,
2010). Although it is true that many cooperatives’ statutes say that women can be
cooperative members or become part of the executive committee, this is “for the
English eyes only”102. Women participation is more often related to family
coordination than to trading or managerial activities.
102
“Só para Ingles” (for the English eyes only) is an expression for situations that exist only for the
sake of good reputation, but that in practice they do not exist. It was coined when the Brazilian
Regencial Government in 1831 accepted the pressure from the British Government to stop with
slaves’ traffic and therefore established a law stating that those to be seen trading slaves would be
terribly punished. As locals knew this law would never be implemented, there started the saying that
it was “for English eyes only”.
97
The organizational model defines roles and behavior of members and
management of indigenous community boards (Wilson, 2010).
A requirement that producers be organized in cooperatives, where all should
have a voice, forms a collective type of decision making, which even though it is
in line with promoting a “democratic system”, it increases the time frame for
coming to a common agreement and this results in the delays in giving feedback
is one of the most frequent buyer complaints. On top of it, it may be that due to
country’s regulations, a cooperative may not be the best legal entity to be applied
by these small producers groups.
The definition of what is a small-holder producer, which is the productive
organization, managed by the family and that does not hire third-party labor.
This not only limits these producers’ growth but also result in higher costs.
Another element which impacts operational budgets is the demand for
cooperatives to put together an environmental plan. The point is that who would
understand more about environmental control than the families who must make a
living of their own land? They are very much aware of the impact of their
activities and that by not managing well natural resources will directly impact
their production.103
On the other hand, aside from the problem of the criteria containing the
understanding and world-view mostly from the experts section of the FLO and
FLO-Cert, it also contains a short-term perspective on what could be done in
terms
of
innovation.
As
stated
by
Daviron
and
Ponte
(2005,
p.
229):“certifications and auditing procedures can actually facilitate a blinding of
producers in relation to the specific requirement that consumers want.”
At the end, in the case of Fair Trade and, more specifically, the FLO criteria,
even if they “define” the elements of “fairness”, at the end these will only make
sense and indeed applied if there are commonalities to the local culture, politics
and histories of place (Dolan, 2010). Otherwise it will only be another “alien” set
103
One example is the need to have 1/3 of the total land as preserved area in the CooperCaju family
farms. Besides this being an environmental norm, the local producers know that if they devastate this
area, the sand, due to proximity to the ocean, will destroy their entire production area.
98
of rules that producer groups must make sure are being applied by the time of the
audits. People must arrive at a compromise. If one says “this is my way of doing
things” and others must understand it, this attitude will lead to isolationism
(Cortina, 2009).
Nevertheless, for this to happen, both sides must be willing to move on with the
relationship and there should have to be behaviors in the other’s way of doing
business which are admired and a kind of wishful development. If neither side
sees something better in the way the other behaves, then this option becomes
very difficult.
4.2
The Geography of Fair Trade – the North-South Construct
FLO just sees one direction – North and
South (small- holder producer from Costa
Rica during presentation at the Madre
Terra event in Turin in October 2010).104
The North-South divide has been perpetuating in the scenario of cultural
representations for a long time, and its respective positive and negative attributes
oscillate depending on the socio-economic importance of these two geographic
areas throughout history (Beller and Leerssen, 2007).
During the Greek and Roman periods, the south of Europe was perceived as the
region with the highest level of cultural (in the sense of arts) and socio-economic
development, while those in the North had the hetero-image of barbarians
located in a cold and far-away region – northern Europeans were perceived as
economically, politically and culturally deficient105 in ancient Rome. The image
of the North was revitalized in the Middle Ages when Paris and then London,
were the places where cultural action was taking place (Arndt, 2007).
This dualism was also part of the American Civil War, as the agricultural and
slave labor based south tried to declare independence from the economically
104
105
Pomponius Mela (43AD)
99
developed and slave-free North. The same happened in Italy with its industries
located in the north and the agriculture and touristic cities in the south (Bonanno,
1989).
It was in the beginning of the 1950s and during the Cold War that the
classification into three Worlds was coined. The First World was that of
modernization, and democracy, entrepreneurial and dynamic and it was where
freedom prevailed, mostly represented by the United States. The Second World
was represented by the Soviet Union, and brought the dualism of communism as
the “enemy” of democracy. And the Third World was formed by Africa, Asia
and Latin America, defined as having pre-democratic structures, an
underdeveloped division of labor, not making proper use of natural resources and
having “primitive habits” (Slater, 1997).
The North-South construct inherits past associations from colonial times and the
historical geopolitical intervention. It brings image associations of an
economically developed, cradle of culture and technology and former neocolonizing countries of the North; and the Third World, formed by a group of
backward, economically underdeveloped and commodity-based, countries in the
South, which needed tutelage (Slater, 1997; Freidberg 2003; Bacon, 2010).
It was only in the post-colonial cultural movement that this dualism started being
reviewed and new forms of opposing cultural references were developed by both
the colonized and the colonizers as they have overwritten part of the story to
break free from the relations of domination and resistance (McClintock, 1995).
Even in a globalized world where borders seem to be more porous, there is an
interesting element related to the North-South routes. For those located in the
‘First World’ the movement following a solidarity line of action is towards
Africa, Asia and nations of the South. In the case of the ‘Third World’, there was
a one-way focus on the USA and Europe as a migration movement, especially
for those in search of the American Dream.
This results in the relationship between “victims” and “victimizers” in which the
agents of socio-economic development are located in the Third World; and the
First World is the place the postcolonial victims run back to (Williams, 1997). In
100
this sense, the First World/Third World, or North and South still elicit a reaction
which draws attention to issues of global inequality and power relations (Slater,
1997).
The Fair Trade movement proposes to overcome power imbalance in
international trading due to globalization, the growing purchasing power of
transnational companies, the struggle of identity, etc. Not surprisingly, these
inequalities occur between the post-colonized countries and their colonizers,
being the FT producers located in former colonies and the largest amount of
consumer markets in the former colonizing countries (Freidberg, 2003).
So far, in Fair Trade communications and governance systems, there are several
geographic references such as: the South: Global South; in-development
countries and Third World. I have selected some sentences from the Fairtrade
International webpage106:
“FLO-CERT GmbH is an independent International Certification company
offering Fair Trade Certification services to clients in more than 70 countries.
We assist in the socio-economic development of producers in the Global South
and help to foster long-term relationships and good practices with traders of
Certified Fair Trade products.”
Or in the FLO Generic Fair Trade Standard for Small Producer Organizations
(version May 1, 2011):
Fair Trade is a strategy that aims to promote sustainable development and to
reduce poverty through fairer trade. Making changes to the conventional
trading system that aim to benefit small producers in the South and increase
their access to markets are the main goals of Fair Trade.
FLO members are formed by 19 labeling initiatives, meaning the national
organizations which license the Fair Trade certification mark, covering 23
countries based in the USA and Canada; Europe, Oceania (Australia) and Asia
(Japan).
106
http://www.flo-cert.net/flo-cert/main.php?lg=en accessed on June 9, 2011
101
Figure 8: Fair Trade Labeling Initiatives (shaded in dark green) are the
ones that can license the Fair Trade Certification Mark on products and
promote Fair Trade in their territory.107 Credit: FLO
Up to June 2011, only consumer markets in the North could buy FLO certified
products. The first attempt to open markets in the South was made in South
Africa, in which there is a FLO marketing organization which sells Fair Trade
certified products to the local market.108
In the Fair Trade International Annual Review 2010/2011 it is mentioned that:
“attention is turning towards markets in developed countries not covered by
labeling initiatives, as well as emerging markets in the global South.”109
As an example of what can be considered an extremely stereotyped and
Eurocentric point of view, the BTC (Belgium Development Agency), in a report
about the development of a South-South trade (BTC report on South-South
107
Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland, France, Germany, Ireland, Italy,
Japan, Latvia, Lithuania, Luxembourg, The Netherlands, New Zealand, Norway, Spain, Sweden,
Switzerland, UK, USA (declined membership in Sept.2011). Map is part of the FLO International
Website, www.fairtrade.net, accessed on June 30, 2011.
108
www.fairtrade.net accessed on August 1, 2011.
109
Fairtrade International 2010-2011 Annual Report, p. 20. Available at www.fairtrade.net accessed
on June 30, 2011.
102
Trade, Olivier Baily and Samuel Poos, June 2010) summarizes why, from their
perspective, the North-South references were for so long part of the Fair Trade
communications: “The "rich" consumers of the North agree to pay a fair price
for products in order to properly “compensate” the “marginalized” producers of
the South.”110 According to this report, this relationship was essential for social
development as:
“Europeans and Fair Trade requirements lead producers to develop impeccable
production practices [...] so that the local market can benefit from this
Europeans-supported development which makes South-South trade possible.”
Those perpetuating the North-South construct will argue that there is a
socioeconomic reason behind this geographic limitation. According to the
OECD-DAC (Development Assistance Committee) it is those in the South who
receive Official Development Assistance and this includes countries with low
and middle per capita income as defined by the World Bank.
Some Fair Trade organizations have been asked why they give preference for
small-holder producers from the developing economies in the North rather than
supporting those from their own countries. The Fairtrade Foundation (UK)
clarify why they focus on small producers from the South rather than supporting
those in their own country and who might also have similar issues in terms of
getting a fair price, international markets and fewer intermediaries in the
distribution chain. They affirm that111:
“The Fair Trade Foundation recognizes that many farmers in the UK face
similar issues to farmers elsewhere, not least ensuring that they get a decent
return for upholding decent social and environmental standards in their
production. We therefore support the promotion of sustainable production for
UK farmers but our specific role will continue to be supporting farmers from the
developing world.”
110
BTC report on South-South Trade, Olivier Baily and Samuel Poos, June 2010.
http://www.befair.be/en/articles/www-befair-be/2-ressources/market-studies.cfm acessed on June 9,
2011.
111
http://www.fairtrade.org.uk/what_is_fairtrade/faqs.aspx accessed on September 12, 2011
103
In this sense, the alleged difference between producers in the UK and in the
developing countries is that:
“[…] farmers in developing countries often have little infrastructural support,
social security systems or other safety nets available if they cannot get a fair
price for their products.”
And they give three main reasons why they focus producers in the developing
world (available at the Fairtrade Foundation UK webpage, Q&A session):
First one is that they decided to promote development through trade: “the Fair
Trade mark was established specifically to support the most disadvantaged
produces in the world by using trade as a tool for sustainable development.”
The second reason is that they select products that cannot be entirely supplied by
European producers: “Fair Trade isn’t in competition with UK farmers and the
purchase of locally produced and Fair Trade products is not necessarily mutually
exclusive. Fair Trade focuses by and large on tropical agricultural products such
as coffee and bananas that can’t be grown in temperate climates or products that
can’t be grown in sufficient quantities in the EU e.g. grapes and oranges.”
And third, they leave it as a matter of consumer preference to select a regional
product or a Fair Trade one.
According to the points above, the overall conclusion is that, in line with an
“ethics of partiality” (Wolf, 1992; Ashford, 2000), Fair Trade establishes that
some deserve more help than others.
104
4.3
For Whose Benefit – the Marginalized Producer Construct
I don’t see myself as being a marginalized
poor farmer (FT/FLO certified Alto
Palomar Cooperative Manager, in Peru,
August 2009)112
What is the common sense understanding of the word “marginalized? Along the
communications about Fair Trade one often finds references to the marginalized
producers. According to the Fair Trade Federation’s, Fair Trade’s principal one
is to “create opportunities for economically and socially marginalized
producers”113; the same reference can be found in the WFTO (World Fair Trade
Organization), and in different media be it webpage, products’ packaging and
campaigns.
Overall, the word marginalized means: “to relegate to an unimportant or
powerless position within a society or group”114. Marginal is what is not very
important, not included in the main part of society or of a group.”
However, as defining who and what is marginal, the characterization of what are
the groups that can be granted the label and be certified as Fair Trade producer is
based on land size.
According to the FLO standards for small-scale producers (Fairtrade
International webpage)115 there are two types of small producer profiles, one is
formed by those who develop less labor intensive products (cocoa, coffee, honey,
112
During a project to evaluate the impact of international exhibition fair attendance in new contracts
with better prices, as a mandate by OSEC with FT Coffee Producers in the Peruvian Amazon in
July/August 2009. Translated from Spanish by the author.
113
http://www.fairtradeprinciples.org/create-opportunities-for-marginalized-producers/ accessed on
December 2, 2011.
114
Merriam-Webster online dictionary. Available at http://www.merriam-webster.com Accessed on
November 12, 2011.
115
www.fairtrade.net, on the page Standards for small-scale producers. Accessed on June30, 2011.
And FLO Generic FT Standards for Small Producer Organizations.
105
nuts, etc) and the other by those who produce highly intensive products (sugar
cane, fresh fruit, fresh vegetables).
For the less labor intensive, small are those that don’t depend on hired workers
all the time, but run their farm mainly by using their own and their family’s
labor. In the case of labor intensive farms, they hire less than a maximum
number of permanent workers as defined by the certification body and the land
should be equal or below the average size of the region.
The IFAD (International Fund for Agricultural Development) report about the
state of smallholders or family-based agriculture sector in Latin America and the
Caribbean (Bedergué & Fuentealba, 2011), this group is formed by a) small
farms; b) family-operated; c) no or limited external hires; and, most of all, those
that are able to sustain their livelihood on the basis of self-employment in their
own farm.
By defining land size, the survival of small agricultural property will depend on
the type of product grown. This also impacts the sustainability of family farming
in the process of handing it over to the next generation. Dividing the land up for
many children is, in the end, the multiplication of poverty, as the heirs will not be
able to make a living from a land size which gets smaller after each succession.
From the market side, in Fair Trade commercialization, the product message
most often communicated to final consumers focuses on ‘doing good for the
poor’ or ‘helping the most marginalized’ people116. And there is also the
stereotype about the peasant (producer) and the businessmen (trader or buyer)
(Freidberg, 2003). The constructs of rural producers may bring more prejudice
than benefits to small agricultural producers, in an established icon of “the other”
(Goodman, 2004).
Aaron C. Kay and John T. Jost (2003) in their research project about
complementary stereotypes as systems of justification, bring the example of the
‘poor but honest’ or ‘rich but miserable’ as means for a sense of “feeling good”
and to provide the desired perception of the world as fair and “legitimate”.
116
Communicating Fair Trade Products presentations at the Biofach held in Nuremberg in February
2009
106
Nevertheless, according to them, such complementary stereotypes serve the
purpose of maintaining the different groups’ status quo and produce a false
consciousness.
From the producers side, during visits and exploratory interviews with
cooperatives’ growers and managers in the Peruvian Amazon117 in the district of
San Martín and in the Brazilian semi-arid region in Rio Grande do Norte state, a
common statement was that they believed consumers preferred their products
because they came from a family farming enterprise, were organic grown and
handmade processed.
Producers were also aware that product quality is an element of consumer
preference and that they had to look for alternatives to increase production and
expand customer base. This shows a clear gap between producer self and heteroimage.
The marginalized producer is also portrayed in product packages or sales
communications as those coming from different sources of indigenous ethnical
groups or from a “simpler” economic background, building the image of the
exotic, of historical preserved traditions, in many cases from the groups
oppressed during the colonial expansions in Latin America.
In the line of turning places and ethnographies into symbolic attributes
(Goodman, 2004), many industries make use of these ethnical and regional
image attributes to their products. As a reference for some examples, there is the
Alter Eco Café Cuzco Pure Arabica from Peru118or the Café Oaxaca Pure
Arabica from Mexico.119
Another illustrative example is what Transfair communicates about its certified
cooperative CECOVASA (Central de Cooperativas Agrarias Cafetaleras) located
on the Peruvian side of Lake Titicaca. Their message is constructed with pictures
117
The exploratory research visits to Brazil and Perú took place in January and April 2009
respectively.
118
http://www.altereco.com/fr/nos-produits_fiche_16_cafe-cuzco-pur-arabica-du-perou.html accessed
on September 6, 2011.
119
http://www.altereco.com/fr/nos-produits_fiche_14_cafe-oaxaca-pur-arabica-du-mexique.html
107
of women producers dressed with indigenous costumes (and brand new hats
though) and several statements on how the fair trade social premium allowed
them to improve their production capabilities.120
It is the case for cooperatives located in areas where there are large ethnical
groups like in Peru, Guatemala, Ecuador and Bolivia, that some of them have
already learned there is an expectation from European buyers to see that they
have members of different ethnicities in their group of associate producers.121
By being aware of their meta-image (sort of behavior which is expected from
them in the intercultural contact), producers engage into an image game where
they show off their ethnical roots and how they preserve traditions, making both
certifiers and buyers happy and therefore being more easily granted the label,
microcredit and sales contracts (Wilson, 2010).
Not only does this theater build the image of the marginalized producer as from
indigenous heritage, but also gets reinforced by the producer groups themselves,
and creates a smoke-screen that hides deeper socio-economic and political issues
which might be going on in some of the “role-model” cooperatives. The box
below consolidates the reinforcement process of the “marginal producer” image
construct.
Marginalized Producer Construct Meta Image / Image of the Other Producer Profiles Definition to be awarded the Certification
Producers’ marginality also refers to the Fair Trade governance system. As stated
in the chapter about the contemporary challenges of this socio-economic
movement, although there has been an increase in producer organizations
participation in the certification criteria definition and in the processes of
120
http://www.transfairusa.org/get-involved/blog/fair-trade-certified-coffee-peru-wins-peopleschoice-award accessed on September 6, 2011.
121
In Peru, during a field visit as the representative of the Universtity of St.Gallen in a project
commissioned by a Swiss NGO, one of the most traditional cooperatives in the Central Amazon took
us to visit producers. First stop was in a house where all members were dressing indigenous
costumes. But the main contact person talked to us about traceability. There are indeed producer
groups purely formed by members of a specific ethnic group, but this one was not the case.
108
reviewing minimum prices, their representation and voice is still much lower
than those of the FLO associate members.
4.4
The Fair Trade Minimum Price Construct
The minimum price is at the center of a fairer trade system in opposition to the
pressure put on producing costs due to globalization. It goes in a different
direction than free market pricing definition or the marginal utility one. As stated
by Reinecke (2010, p. 563) in her article about the minimum price formation and
the notion of value: “Fair Trade redefines not only how value should be
calculated, but also what it is that should be valued and who values it.”
The rise of the need to define a minimum price happened in the coffee crisis of
1989 when the ICA (International Coffee Agreement) was terminated (Oxfam,
2002; Nichols and Opal, 2005; D’Haese, Vannoppen and Huylenbroeck, 2007)
driving international commodity price to very low levels.
For the Fair Trade movement, the establishment of a minimum price aims at
guaranteeing that producers and their families will have the economic conditions
for a “decent life”, and the means to cover the cost of sustaining their production.
According the Fairtrade Foundation webpage (2011)122: “Fair Trade is about
better prices […] by requiring companies to pay sustainable prices which must
never fall lower than the market price.” Another definition is that of the WFTO,
which according to their ten principles of Fair Trade123: “fair pay means
provision of socially acceptable remuneration (in the local context) considered
by producers themselves to be fair and which takes into account the principle of
equal pay for equal work by women and men.”
Just as much as defining the minimum price is a key element in a neo-liberal
economic approach, so is the complexity of defining production costs in the
different areas where producers are located and to get the main impacted
122
http://www.fairtrade.org.uk/what_is_fairtrade/fairtrade_certification_and_the_fairtrade_mark/the_fai
rtrade_minimum_price.aspx, accessed on June 29, 2011.
123
http://www.wfto.com/index.php?option=com_content&task=view&id=2&Itemid=14, accessed on
June 29, 2011.
109
stakeholders involved in its definition process: producers, buyers, traders and
Fair Trade organizations’ representatives.
The Fair Trade minimum price is set to be the starting point for negotiations and
it helps both producers and buyers as a point of comparison in relations to the
international price of food commodities. In times of low, it protects small
farmers from bankruptcy; and in times of high, it serves as an anchor which
supports buyers in keeping producers’ expectations low and not inflating the
market (Reinecke, 2010).
Free market economists have a stake in opposing the artificially defined price,
labor division and land size, which makes it “unfair” trade. Michael Munger
wrote an article entitled Forget Fairtrade Fortnight, let the market work for the
Adam Smith Institute webpage (2009)124 where he states: “Fair trade consciously
prevents the productivity increases that arise from division of labor, by creating a
kind of human zoo, arresting production and exchange relations in a preindustrial agricultural form.
By raising returns to unproductive labor, fair trade shackles people in less
developed nations to traditional roles, and traditional methods of production.”
And how is the Fair Trade minimum price list defined and by whom? The
Fairtrade Organization approaches both minimum price and premium as
follows125:
“Fair Trade minimum prices are set by the Standards Unit at FLO following
research into producers’ costs of sustainable production and consultation with
traders and other stakeholders. The Fair Trade premium is a sum paid in
addition to the Fair Trade minimum price.”
“[the fair trade premium] is money paid on top of the Fair Trade minimum price
that is invested in social, environmental and economic developmental projects,
124
Available at http://www.adamsmith.org/blog/tax-and-economy/forget-fairtrade-fortnight,-let-themarket-work/, accessed on August 1, 2011.
125
www.fairtrade.org.uk, accessed on June 30, 2011
110
decided upon democratically by a committee of producers within the
organization, or of workers on a plantation.”
The process of product price definition is the “location” where the intercultural
dialogue really occurs in the relationship between producers and buyers and
when Fair Trade shall or should distinguish itself from conventional trade in
terms of economic power play.
The most representative example was the self-coordination of small holder
producers through CLAC to request FLO to review the minimum coffee price,
which had been kept the same (no corrections) for ten years. In 2006, they have
put together a working team, and looked for consultants and researchers to
develop a coffee costs review in Peru, Nicaragua, Mexico and Bolivia.
In this process FLO was at first “not” in favor of reviewing coffee minimum
prices, due to concerns that it would scare large buying companies which had
just been certified (Bacon, 2010), and replied reporting that price reviews were
under the responsibility of the Standards Committee.
Afterwards, as CLAC petition had a strong representation of civil society
organizations and ATOs, they finally gave them voice to present their claim, and
in 2007, FLO granted the low end proposed price increase, according to the
presented study, which would clearly not fully covering the costs of sustainable
production.126
There are several external studies about how effective (or not) Fair Trade is in
meeting the basic needs of smallholders and in supporting them in moving their
way out of poverty, meaning, getting an income which is enough to provide them
savings in order to improve their living conditions (Daviron & Ponte, 2005;
Bacon, 2010; Reinecke, 2010).127
126
For more information about the political and economic processes involved in this price review,
please refer to Christoph Bacon article about ‘Who decides what is fair in fair trade? The agrienvironmental governance of standards, access and pride’. Journal of Peasant Studies. 37:1, 111-147.
127
In July-August 2009, I joined a project coordinated by the University of St.Gallen Institute for
Values in Society, led by Prof. Dr. Jaeger, in order to evaluate the impact of Fair Trade in the
economic lives of small coffee producers in the Peruvian Amazon. The results were that although it
111
We should also acknowledge that small producers located in remote areas hardly
ever have access to the web and will not have the habit and knowledge to check
the New York International Commodity Prices or to do the accounting for their
properties and family fixed costs.
This signals a situation in which only the organized and professionalized
producer groups will have the political power, knowledge and support to
negotiate prices, while the small ones, which are then supposed to be the main
FT target group, stay in second or third place of preference and voice.
4.5
A system of interconnected image constructs
Even if with good intentions, the incoherence of Fair Trade in which other
cultures must apply the same socio-economic and environmental ‘development’
model as the countries where FLO members are located, can be understood as a
replication of the colonial model. In it, the marginalized producers are perceived
as needing to learn how to do business, and what is right…and fair for social
development, economic standards and even environmental performance.
This is made clear when it is requested and expected that small producer
cooperatives communicate and behave in the same way as the conventional
business model in economically stable countries. Examples range from
expectations that producers will speak a foreign language fluently and
communicate by email on an hourly basis; to presenting yearly balance sheets
that follow the international accounting system, to putting together an
environmental action plan.
In the case of the producers, in a universalist business model, the European
management style and the criteria are taken as something to be followed by other
countries. Even when in different cultural contexts, locals perceive their way of
doing business as something that should be ‘improved’.
helps them getting a better price than in conventional market, at the end, due to family and cost
structure, they still live with less than USD1 a day.
112
Although this socio-economic movement is intended to allow integration of
those who cannot access international markets into a shorter supply-chain, in the
end it helps guaranteeing small producers’ organization participation, but it does
not promote inclusion. This second one would require these groups to have an
equal position to the one from the buyers in the commercial negotiations – and
this includes a mind-set change from the producers’ side – and that they would
have a voice in the decision making process of the FLO system, rather than just
being the ones to be consulted whenever large decisions need to be taken.
The figure below illustrates the self-fulfilling process in which the constructs of
the marginalized producer and the North/South divide trigger consumers’ sense
of “feeling good”.
These image expectations get reflected in the FLO certification criteria, which
also need to include other social, economic and environmental elements in order
to keep its promise of being the most complete socio-label available with the
highest brand recognition.
It is the case that even in ethical markets, constant differentiation must be created
to break commoditization, some examples show that being fairly outsourced is
not enough; products must now be organic, non-GMO, peanuts and lecithin free,
carbon free, among many other new attributes. At the end it is the small-holder
producer organization that must invest time and money in complying with all
these demands. And there is seldom a pay-back.
113
Expectations on the
differentials of an
alternative trade
Consumer perceived
image of Fairtrade
Build and deploy established
icons of the other (translated
in the certification criteria)
- FLO pre-defined criteria
- Industry & Fairtrade
Organizations message to
final consumers
Define and build the
image of a moral
economy and picture FT
producers
Marginalized producer
from developing world in
the South
Commoditization of the
difference to make a difference
(fulfill the expected image)
Figure 9: Self-fulfilling image constructs process in Fair Trade. Source:
Researcher.
In the following section I go into the detail of how these elements interconnect.
The marginalized producers construct
The set of connected elements starts with the marginalized producer construct.
The first fact that supports the ongoing prejudice of the producer as being
marginal to the system is their unbalanced participation in the FLO criteria
governance system in relation to the voice of organizations representing FLO
member associations and of their trade partners.
In the words of M. Goodman (2004, p.898):“empowerment involves more than
just the transfer of added value from consumers to producers”.
The image of the marginalized producer is so embedded in both end consumers
and buyers’ minds that, even if some groups are trying to picture them as a small
entrepreneur and the face of those who grow and care for the food we eat, an
effective change in behavior towards these people will still take some time. As
stated by M. Cinnirella (1997, page 40): “once endorsed and internalized,
stereotypes are often particularly resistant to change”.
114
In several cases, the stereotypes communicated about the poor and marginalized
can also be understood as having a legitimization purpose for the applied
development models, which often have a different agenda behind them.128
The preference for selecting and portraying ethnic groups in product
communications is a reflection of the stereotypes of the era of colonial
conquest129. In the chapter about the image constructs of Brazil, there is the
example of the first letter the conquerors wrote to the king of Portugal to report
on the first days after the official arrival in the new land, in which the local
population was pictured as being less capable, in need of tutelage, and of
knowledge transfer.
In this line of thought, Europe has positioned itself as the “active agents of
knowledge”, while the other nations became known as the “object of knowledge”
(Brigg & Muller, 2009). This built-up knowledge transfer route links with the
North-South construct.
The North-South construct
Even in the case of Switzerland, which was not an imperialistic country, there is
still a inherited set of images of these formerly colonial countries, especially in
the case of buyers who have not been to the country and also know it from
others’ experiences, travel and history books.
The constructs of the South as being the region for agricultural production, and
where the marginalized producers are located; and those of the North that equal
to the location where consumer markets and certifying agencies are, is reflected
in several examples brought up along this study.
128
For example, in Peru, an aid agency has been implementing a program called ‘Programa de
Desarrollo Alternativo’ (Alternative Development Program) in a coffee production area. Although
one might imagine it would aim at supporting the local community in developing alternatives for
income generation, in fact what they meant as alternative was growing other sorts of agricultural
products to replace illegal plantations.
129
To illustrate this point, during a road-show in Peru, in 2009, with European buyers, one of them
was filming the producers they were buying their products from. Before one of the visits he said I just
hope that they look like very indigenous types.
115
These clear cuts which date back to the geographies of the fifteenth century,
serve as a justification on why small producers in the North cannot be
included/certified/granted the FLO label, or, are applied in practice when the
producing countries of the South are not perceived or accepted as consumer
markets and therefore there are no FLO local agencies to allow the use of their
trademark license.
Both marginalized producers and North-South constructs link with the
universalist approach that defines what is fair, as well as what development
stands for and the role model of the way of doing business.
Universalism for defining fairness
The original promise of Fair Trade as being a new socio-economic model
through which small producers would finally be part of a global trade system,
raised very high expectations on the side of those it was supposed to support.130
The signs that this promise is not being entirely delivered are visible. First of all,
there have been several splits in groups between those who believe that Fair
Trade is a movement weighted more towards the producer end of its value chain,
and that achieving the objective of socio-economic development through
inclusive trade should be the focus, and those who are more market oriented and
focused on mainstreaming Fair Trade products. This reorganization of likeminded groups is happening both in Europe and in the USA.131
Discussions and guesses about what was (or was not) fair in Fair Trade naturally
came up during the interviews with producers, cooperative management teams
and employees, as they questioned the validity of some criteria or mentioned
130
A first step towards integrating producer groups to the FLO system was the decision announced on
October 14th 2011 that these will now compose 50% of the General Assembly. The General
Assembly decides on membership issues, annual accounts and other administrative issues. The
modus operandi for this implementation is still not clear. This change happened after the new FLO
standards review in May 2011 and which is expected to be re-evaluated again only in 2016. Even if
producers have a voice, there are five years to come until the most critical decision to be taken, which
are the criteria definition, but also gives the needed time to indeed increase producer participation.
131
Please refer to the chapter about the challenges of Fair Trade.
116
structural power relations in the distribution chain which were not being tackled
by the certifying agents.
This is when the universalist approach links back to the marginalized producer
and the North-South divide.
Linking universalism back to marginalized producers and the North-South
constructs – unless the image of the marginalized truly moves one step forward
in the way they are portrayed, and these individuals become perceived as those
with lesser market advantages and access, or, to have recourse to a naming
process, turn from marginalized into disadvantaged producers, they will not be
perceived as partners or have a voice in the FLO’s governance system.
Inclusion also means being able to apply dialogue in defining some agreed upon
points on what is fair, what development is, and which business models should
be followed.
It is clear that what FLO guarantees to final consumers is that there is an audited
set of criteria that determines who will be granted the label. Nevertheless, this
should not be an excuse to apply and follow a unique code of conduct in a onefits-all model to which all others must adapt and which dictates what is
‘compliant’ or ‘not compliant’ according to a Fair Trade criteria bible written by
‘experts’ in the North.
There is plenty of space to promote a dialogical approach, and it is necessary to
jointly establish a work process agreement. I borrow here the concept of the
“ethics of the minimum” proposed by the Spanish philosopher Adela Cortina.132
It is not a matter of a universalist approach, which only gets implemented if
imposed (by a religion or a political system or some sort of social and
environmental certification processes) nor is it a case of relativism, in which
different views and values might paralyze any processes of a joint work.
Cortina’s proposal is to follow a pluralistic approach in which through dialogue,
the different actors involved in a system identify the values which they already
132
Adela Cortina. Etica Minima. Brazilian Edition, 2009.
117
have in common and allow them to jointly build a mutual project. This applies
whether it is a community or a system which, through inclusive business,
establishes certain economic behaviors throughout the value chain and turns into
a fairer trade. These shared values make up the indispensable minimum ethics
that justify and allow certain relativism for the inclusion of the moral values of
the producer groups.
118
Part III - Empirical Section and Case Study Analysis
5.
5.1
Empirical Session
Methodology
An exploratory study of a qualitative nature, with interpretative multiple casestudy method has been selected for this research as it strives towards a holistic
understanding of cultural systems of action.
The case-study is appropriate for new topics and when the context and
individual’s situational self-interpretation are extremely relevant to the research
objective (della Porta & Keating, 2008). It is best applied when research
addresses descriptive or explanatory questions and aims to produce a firsthand
understanding of people and events (Yin, 2006).
Case study provides the means to analyze facts from the perspective of both
sides of the studied commercial relationships, each embedded in their cultural
system. It gives voice to people that generally would not be taken into account,
when it is fundamental to incorporate the experience and views of the actors
(Yin, 2003; Tellis, 1997; Feagin, Orum and Sjoberg, 1991; Della Porta and
Keating, 2008).
Multiple cases strengthen the results by replicating the pattern-matching and thus
increasing confidence in the robustness of the theory and provide the researcher
with the perspective of the actors and the relevant groups, since they allow
identifying and analyzing complex interrelationships (Yin, 2003; Tellis, 1997).
For building theory from case studies, in general, researchers combine multiple
data collection methods with “within-cases analysis and cross-case pattern search
from divergent techniques” (Eisenhardt, 1989, page 540). The analysis of the
case data depends heavily on the integrative powers of the researcher and other
sources of information triangulation and conclusions analysis (Benbasat,
Goldstein and Mead, 1987).
119
“Triangulation is about using different research methods to complement one
another. Multiple perspectives imply a situation may have more than one
interpretation depending on how we view it” (della Porta & Keating, 2008).
Throughout this research, three complementary methods were used – the case
studies analysis; participant observation; and a model for validating and valuing
opposing cultural values through stereotypes.133
Statements which came up in the interviews illustrated the main theoretical
points of view on the issues in this study. By including these statements the
researcher did not intend to give them a status of truth, but rather to take them as
a manifestation of what each side has realized in terms of cultural differences
and stereotypes in their commercial relationship, what they are and how they
value them.
Cross case-study analysis was performed in order to identify the patterns and
main differences between them. To build evidence for this study’s conclusion,
along with the construction and analysis of each case study, there was a constant
“juxtaposition” of similarities and differences. These were then compared to
existing theory and literature, without forgetting to allow space for innovative
thinking by looking at the conclusions from different angles of the intercultural
theory – socio-cultural and image related. In this sense, when compared to the
traditional hypothesis testifying method, the case study may be a better promoter
of novel theory (Eisenhardt, 1989; della Porta & Keating, 2008).
The case-study protocol was developed during the empirical phase (Yin, 2003)
and organized into files containing the interviews transcripts and recordings, the
full tables with statements organized by main common topics, and the context
related pictures.
5.2
Method Limitations
Qualitative studies based on multiple case-study result in suppositions and
cannot provide a generalized conclusion as they do not result in a numerical
representation.
133
Model proposed by Lars Fant (1997) which is further explained in individual case study analysis.
120
The use of empirical evidence can result in overly complex theory, with several
exceptional elements which applies for every single case and that lacks
simplicity. Since they lack quantitative procedures like statistical regression, in
case study it is more difficult to define where the strongest correlations are
(Eisenhardt, 1989).
The main point though is that for intercultural studies, as mentioned in the first
part of this chapter, due to the changing nature of individual behavior and
thinking, and to the importance of the context and socio-political systems in
action, it is not recommended to follow a quantitative approach. Several
individual or group researchers have tried to do so, and were subject to criticism,
as they tend to stereotype an overall cultural value as specific to a certain group
of people or organizations.134
5.3
Case selection criteria
In this study each unit of analysis is formed by two sides of the commercial
relationship: the organization of small agricultural producers in Brazil and its
respective buyer in Switzerland.
To identify the case studies formed by the binomial trade partners, first the
researcher accessed the Swiss Fair Trade marketeers and checked which ones
were buying products from Brazilian producer organizations.
After this first assessment, the following selection criteria were applied:
A.
In order to provide the basis for comparison for the cross case-study
analysis
i.
Companies should operate in a Fair Trade system, but not necessarily
FLO certified, meaning that other sorts of social certification were
accepted, including the ATOs (Alternative Trading Organizations) who
134
This includes the studies which have classified different nations into binary opposing values, like
the Globe Sutdy, or G. Hofstede or Trompenaars & Hampden-Turner. All these works are part of the
traditional literature about the intercultural, nevertheless they have been under severe criticism due to
it quantitative nature.
121
have their own definitions for Fair Trade and who do the auditing
ii.
themselves;
Only agricultural producer organizations were considered;
iii.
Cooperatives and marketeers should have been operating in a Fair Trade
system for at least three years;
iv.
v.
First grade cooperatives (those formed by producer members);
Companies’ willingness to participate in this study and information
availability.
B.
In order to access possible differences based on distribution chain set-up
or regionalism in Brazil:
i.
ii.
Producers from different geographic areas were sought out;
Different distribution chain set-ups were chosen, including producer
organizations which export directly to Switzerland, or those that do it
through an intermediary (local or international), as well as the Swiss
companies which have their own offices in Brazil.
5.3.1 Selected trade partners for the case studies
According to the criteria above, the following trade partners were selected:
Case Study A: Claro Fair Trade and CooperCaju: Claro Fair Trade is a
traditional Alternative Trading Organization which buys directly from
CooperCaju, located in the Northeast of Brazil. CooperCaju manages all the
logistics directly, from quality control to exports until the port in Europe;
Case Study B: Gebana Switzerland and Gebana Brazil: Gebana is also a
traditional Alternative Trading Organization which has its own operation in
southern region of Brazil, for the commercialization of organic and non-GMO
soybeans from the state of Parana.
Case Study C: Rivella and Coagrosol: Rivella is a Swiss soft drinks company
which commercializes fair trade orange juice through the product brand Michel.
Their product sourcing is coordinated by a third party, a trading company called
Fruitag. Coagrosol is a cooperative of small-holder orange producers located in
the state of Sao Paulo, southwest region of Brazil.
122
In Brazil, the producers’ organizations location is shown in the map below.
Case Study A
Case Study C
Case Study B
Figure 10: Researched producer groups geographic location in
Brazil
5.3.2 Rationale behind the selected countries
From the perspective of the intercultural encounters in Fair Trade, there are some
historical, cultural and image-related specificity about Switzerland and Brazil,
which made them the focus countries for this research.
In the case of Brazil:
In comparison to other countries in South America, the process of small
producers joining Fair Trade is in a start-up phase;
It is the only country in Latin America where Portuguese is spoken, when
Spanish is the second international language and the one used by the
organizations involved in socioeconomic development and aid-programs;
123
In Brazil, differently from other countries in South America, support from
foreign governmental and international cooperation agencies is much
smaller. Therefore cooperatives do not necessarily have to adjust their
structures and programs to comply with external donors’ criteria;
Due to this country’s tradition in agribusiness and large plantations, Brazil is
not perceived as a country of small agricultural enterprises.
And in the case of Switzerland:
It is in Switzerland that we find the largest Fair Trade products consumption
per capita, much of it due to the successful implementation of the Max
Havelaar labeled banana sales through Coop and Migros and to market
maturity, which is moving from the ‘doing good for the poor’ to ‘supporting
small producers to be included in a global trade system’;
There also seems to be a dense network of Swiss people (buyers, certifiers,
and social entrepreneurs) facilitating both bridging connections as well as
intermediating intercultural encounters between small producers from Brazil
and the buyers in Switzerland;
Switzerland was not an imperialistic nation, and there are no post/neocolonial relations with Brazil;
In no other country in Europe does one find so many different cultures in
one. Besides the four official languages and cultural backgrounds, there is a
large community of expatriates and immigrants living in Switzerland.
The downside of having elected Brazil and Switzerland is that due to one’s early
stage in Fair Trade, and the other’s rather small total market size, there are not
many different groups of buyers and fair trade products sellers. But even so, it
was possible to identify four different trade relationships and to select three of
them.
124
5.4
Data Collection
In order to have a strong substantiation for the conclusions based on the three
selected case studies, different sorts of data and their collection were applied to
allow triangulation (Eisenhardt, 1989; Yin, 2003).
Primary data came from a series of semi-structured interviews which were
applied to the case studies’ actors135, context related people and Fair Trade
experts.
The interviews were held in Portuguese, in the case of Brazilian producers; in
Portuguese or Spanish in the case of context-related people, and in Portuguese,
English or German in the case of Swiss buyers and marketers, and were
translated into English by the researcher.
The interviews lasted from 60 to 90 minutes and were voice recorded with the
consent of the interviewees, except in the case of Skype calls, where the
researcher took note of the main points raised during the interview.
For building the case-study protocol and to facilitate content review, the recorded
interviews were transcribed into written form. These texts were the basis for
grouping the most common elements of the differences between the ways of
doing business and in relation to the image of the other. The semi-structured
interviews involved the following people:
In the producer cooperative/organization:
Person responsible for the commercial contact with Switzerland
Management team: President, Director and/or Commercial Manager
Employees: quality control, commercialization, educational/social
development, technical support to producers (if applicable)
Producers (active members)
135
Preliminary interview script in Annex 1
125
In the buying organization:
Person responsible for the commercial contact with Brazil
Person in charge of marketing
Producers’ commercial relations agents or intermediary buyers
For the primary data, a total of 40 in-depth interviews were performed as shown
in Figure 11.
Swiss
Buyers
5
Bridging
Actors136
5
Context
Related
7
Cooperative
Management
6
Cooperative
Employees
7
Producers
10
Total
40
Figure 11: Amount of qualitative interviews according to interviewee profile.137
The largest number of interviews took place between October 2010 and August
2011, except in the case of a cooperative in the northeast of Brazil where a first
visit and set of interviews took place in January 2009, when the researcher was
accompanying a buyer/certifier from an ATO. Afterwards, in November 2010,
another interview was applied to the newly-elected cooperative president.
The field visits to the buyers’ and producers’ sites took place on the following
dates (grouped by case study) detailed in Figure 12.
136
Bridging Actors are the people who moderate or intermediate the contact between Swiss buyers
and Brazilian producer organizations. This concept is further explained in the conclusions chapter.
137
See Annex 2for the complete relation of interviewed people, their profile and dates.
126
Organization
Date
Place
Claro Fair Trade
October 2010
Claro’s main office in Orpund,
Switzerland
CooperCaju
January 2009
CooperCaju office and producers
site in Serra do Mel, Brazil
November 2010
At the Biofach in Sao Paulo, Brazil
May 2011
After the
Brasilia
Gebana
Switzerland
October 2010
Skype call
November 2010
In Sao Paulo
Gebana Brazil
December 2010
Gebana’s office and producers site
in Capanema, Brazil
Rivella/Michel
March 2011
Fruitag
March 2011
Rivella’s main office in Rothrist,
Switzerland
EcoJus
meeting
in
Fruitag’s office in Niederhasli,
Switzerland
Coagrosol
August 2011
Cooperative Office and Producers’
site in Itapolis, Brazil
Figure 12: Field work/interview date and location.
The researcher applied participant observation in three events. The first one was
the Madre Terra Forum in Turin in November 2010 as an external invited
observer from Slow Food. The second was in Brasilia in May 2011during a two
days planning meeting of EcoJus, an association formed by family-run small
producer organizations which aims at guaranteeing internal market participation
for their products.
And a third one, which was a meeting of a group of about eight people
representing producer organizations from the North, Northeast and South of
Brazil, with governmental representatives, to discuss a legal process related to
127
the financials of a learning project to which producers would like to propose an
agreement. This one was also held in Brasilia in May 2011.
Secondary data was gathered from communication artifacts: product packaging
and messages conveyed by text and picture, folders, trade marketing material, ecommerce and institutional websites, presentations at trade fairs and seminars,
store setting, companies’ annual reports and cooperatives’ statutes, FLO Cert
certification criteria lists, articles in the media.
The literature review included theory on intercultural relations, image studies,
stereotypes, analysis and insights about the Fair Trade movement and its
constructs, as well as previous research about one of the actors who was part of
each case study, whenever available.
5.5
Line of Analysis for each Individual Case Study
Introduction and local context
The single case study starts with an introduction about each organization that
forms the unit of analysis.
It is followed by the local context assessment through secondary data collection
including economic reports, newspapers, previous studies and articles.
Collaboration networks and participation in regional or national Fair Trade
initiatives were also checked and included when available. The same applied for
expected challenges.
Producer’s self-image
A self-image assessment was only performed with producers / cooperative
members. This was done in order to have a base of comparison for the gaps
between the Fair Trade image construct of the marginalized producer, as well as
to identify traces of regionalism and intra-group stereotypes.
The questions were: How would you describe Brazil/Brazilians? How would you
describe your region?
128
Pre-assessment of the Swiss company Fair Trade messages to the market
A pre-assessment of the symbolic attributes communicated to the final
consumers about product/producer was performed through campaigns,
promotional material, sales and institutional websites, store ambience, and
product packaging among others, in order to access the already communicated
“image of the other” and the constructs of Fair Trade.
The elements which were searched referred to the Fair Trade pre-selected image
constructs: the North-South divide and the marginalized producer. The
connection producer/consumer and transparency as well as other elements that
have come up, were also included.
Image of the Other – General
The generic image of the other for both Switzerland and Brazil was obtained
through the question: What image do you hold about that country? And when
interviewing buyers, it was also inquired why Fair Trade products from Brazil?
Image of the Other – In the way of doing business
During the interviews, in order to access the differently perceived image of the
other in the way of doing business, and to identify and validate the opposing
cultural values between groups, a semi-structured questionnaire was built based
on a model proposed by Lars Fant (1997).
In it, a value thought of as characteristic of one culture will correspond to a
stereotype shared by members of a second group in relation to the first group.
This allows identifying which stereotyped ideas and representations of the other
cultures prevail in a given culture, concerning the members of the first.138
138
Lars M. Fant (1997). Intercultural interactants. In: Beyond Pug’s Tour. Amsterdam: Rodopi.
Pages 475:494.
129
In order to identify and validate the main perceived cultural differences in the
way of doing business, both sides were asked about what is it that the other one
does in a better way (+) or in a same way (=) or worse than in their country of
origin (-).139
Evaluating what the other one does better, provides signs of one’s respect for
something good in the commercial partner, which is in general a ‘what one
would like it to be’ cultural value. It can also be a self-reflection on what could
be improved.
What is perceived as equal are the shared cultural values. And what is negative is
something opposed to one’s cultural values.
These three sets of ‘better’, ‘equal’ and ‘worse’ are necessary elements for a
dialogical approach and in the process of cultural awareness. Evaluations were
also made in relation to self and to the other.
To identify the image of the other and stereotypes, I applied a four steps
approach which is described below, followed by the respective question, part of
the semi-structured interview, asked to both producers and buyers in line with
this study’s purpose, which are summarized in Figure 13.
a.
Generalized perceptions of the other party’s behavior
This allows raising the top of mind “images of the other” held by the individual
before the cross-cultural contact and that serves him/her as means of forecasting
the other’s behavior.
In your commercial relationship with Swiss buyers/Brazilian producers, how do
you compare their way of doing business with the Brazilian/Swiss way?
Are there typical behaviors from their side?
139
The question was: In the way of doing business, what is it that the Swiss/Brazilians do better,
equal or worse than the Brazilians/Swiss.
130
b.
Inferences concerning underlying factors
In this step, the observer, based on his/her values, beliefs and norms, tries to
explain why the other party behaves in a certain way. The question was: Were
there misunderstandings? Why?
c.
Valuation of the other party
This one is important to “measure” how much a certain behavior and/or the
reasons behind it (i.e. values, norms) rank as positive or negative in importance
according to the observer’s values system.
This contrastive attribution of positive and negative properties serves as a vehicle
for value judgments (Beeler, 2007). By attributing a positive and negative value
about ‘the other’ behavior in relation to ours, we define the image of the friend
and of the enemy.
This is also a way to strengthen one’s self-image from a regional or cross-border
perspective (Bolten, 2007; Beeler, 2007).
In the producers’ / buyers’ way of doing business, what do you believe are the
factors/elements which are better, equal and worse in relation to the
Swiss/Brazilian way?
d.
In-group back-up
This is when the observer tries to back up his assumptions, images and
assessments of the other by proving these to be shared among his cultural group.
In this study, whenever applicable, the above set of questions was also made to
other employees from the cooperative or of the buyer.
131
(1) Artifacts’ symbolic attributes
(4) Image of the other - Producers
(4) Producer’s Country Image
Artifa cts (product
packa ging, store
ambience, etc.)
Producer
Buyer
Consumer
(2) Self Image
(3) Buyer’s Country Image
(3) Image of the other - Buyers
Figure 13: Image checked relations in the commercial relationship small
Brazilian agricultural producer organizations and their respective Swiss buyers.
Source: Researcher.
(1) The perceived image buyers hold about the producers expressed in the way
the first communicates about the second to the consumer market;
(2) Producers’ self-image (regional/country);
(3) Producer organization’s perceived image of the buyer’s country and
perceptions and evaluation about the buyer’s commercial behavior;
(4) Buyer’s perceived image of the producers’ country and perceptions and
evaluation about producer organization’s commercial behavior.
5.6
Case study structure
The case studies are structured in three main areas:
The first is an introduction of each unit of analysis – the producer cooperatives
and their respective buyer organizations – their corporate profile, local context,
collaboration networks, expected challenges and the historical background of the
commercial relationship between them.
The second part consists of general intercultural elements which came up while
reporting about the communication process during the commercial relationship.
132
In the third part I start with a pre-assessment about how buyers communicate the
specific fair trade product to final consumers. In sequence I include the overall
stereotypes associated to the country of origin as well as those related to how one
perceives the other in their way of doing business based on the interviews which
were done with both sides.
The conclusion about the case is presented in the fourth part.
5.7
Cross-case Analysis
The cross-case study analysis aims at searching cross-case patterns using
divergent techniques (Eisenhardt, 1989) looking for similar patterns and
differences in allowing to shape hypotheses.
For the cross-case study I have applied a longitudinal analysis, comparing in
pairs each of the three individual cases. Afterwards, the most often mentioned set
of described cultural behaviors and images were selected, based on the research
question and proposed pillars for analysis, literature review and the outcomes of
each individual single case.
By establishing a set of most cited elements, I could group and evaluate those
that were similar, different or opposing among the cases, contextualize them and
compare in relation to the theoretical framework. These pre-selected elements
were consolidated in tables to better visualize the main identified elements for
each case study, to compare them and build up conclusions.
The consolidated tables are available at the end of the cross-case analysis chapter
and grouped according to the following topics: Table 1 is about the Cases’
Institutional Set-Up and Producers’ Local Context and Self-Image and
Constructs of Fair Trade. Table 2 refers to the Perceived differences in the way
of doing business’ Generic Image of the Other (Country).
Taking these tables with other multiple sources of evidence, not only the
interviews but also newspaper and academic articles, in order to establish
construct validity, conclusions were grouped into topics and recommendations
were made.
133
Part III – Case Study Analysis
6.
CooperCaju and Claro Fair Trade
CooperCaju’s first international contract was with Claro Fair Trade and their
encounter was promoted by a Swiss social entrepreneur who established the
bridge and acted as intermediary between the different ways of thinking of the
Swiss and Brazilians. He is often cited during interviews with people from Claro
and CooperCaju.
The first contract between Claro Fair Trade and CooperCaju was in 1991 and the
first export of 3,500 kilos of cashew nuts to Switzerland was in 1994, and they
have continued since then. As shown in Figure 13, Claro buys directly from
CooperCaju, with no intermediaries. The contact language is a mix of English,
Italian and Spanish.
6.1
The cashew nut cooperative - CooperCaju
CooperCaju is a national reference for cooperativism, family farming and Fair
Trade in Brazil.
Founded on July 25, 1991, it was the result of an organizing process among
small-holder family producers from several regions in the states of Rio Grande
do Norte, Paraíba and Ceara, to settle productive areas distributed through a rural
settlement project organized by the military government at the beginning of the
1960s.
The cooperative is located in the municipality of Serra do Mel, in the macro
region of Mossoró, six hours by car from the capital of Natal in the state of Rio
Grande do Norte, in the northeast region of Brazil.
Due to its semi-arid climate and average temperatures of 27 degrees Centigrade,
one of the most popular crops is the cashew.
One of the region’s major challenges is managing water resources. There is no
water reservoir in the region to meet the need to establish and artificial irrigation
system for the agricultural area and a large part of the water that serves the Serra
134
do Mel is brought from the Açude Açu dam by approximately 120 km of
aqueducts that cross the BR 304 highway.
The water available through the aqueduct and artesian wells is for use of family
and consumption. Thus cashew production relies on the rain cycle and each
year, the excess, especially in the period for drying cashew-nuts, or lack of
rainfall, has enormous impact on the amount of production and consequently on
families’ economic lives.
According to the recently published 2010 Census, Serra do Mel now has a
population of 10,280, and 73 percent of them live in the rural areas.140
The municipality is divided into community production villas, with 23 residential
centers (22 rural villas and 1 central villa) and each is named for one of the
Brazilian states.
There are 1,196 agricultural plots in the space of the original colonization
project. Each of the lots has 50 hectares out of which 1,174 measure 250 by
2,000 meters and 22 plots which are those located alongside the residential part
of each villa.
The agricultural plots of Serra do Mel, almost all at 50 hectares, were designed to
have:141
15 ha for cashew cultivation (permanent)
10 ha for subsistence
25 ha in native forest as a preserve
140
Censo 2010, in www.ibge.gov.br, accessed on December 27, 2010
141
http://pt.wikipedia.org/wiki/Serra_do_Mel, accessed on December 27, 2010.
135
6.1.1 Business Model
CooperCaju has 176 members142of whom 100 are active, i.e., those who
consistently deliver their production to be commercialized by the cooperative.
The members and the board of directors meet twice a year, once to define the
production goals and again to set prices.
New members should be indicated and presented by an active member. They fill
out an application which will be reviewed and approved by the Administrative
Council. Then they have to subscribe to a minimum of twenty quotas of the
cooperative’s social capital. For service deliver, the cooperative retains 1% of
the amount of transaction of the members in order to generate working capital.
The average annual CooperCaju exports in FT totals approximately USD
226,188 and its main international buyer is Claro Fair Trade. Their commercial
relationship has been on-going for approximately 18 years. For the last three
years, CooperCaju has also been supplying the Chico Mendes Cooperative in
Italy.
Of the total marketed through the cooperative, 30% is sold on the domestic
market and 70% is for export. From the first sale in 2004, the export process was
coordinated by the Sociedade para o Incentivo ao Pequeno Artesão do Rio
Grande do Norte (Association to Encourage Small Artisans of Rio Grande do
Norte), an NGO founded by the AACC under the coordination of a French Swiss
who moved to Rio Grande do Norte at the beginning of the 1970s, to export
handicrafts from a needy community in Natal and the cashews of Serra do Mel.
In 2005, the export was done by Ética, a trade company created under guidance
from World Vision with headquarters in Recife. Since August of 2006,
CooperCaju exports its products directly with no intermediary. The product
leaves via the port of Fortaleza as well as the airport in Natal.
This producer-consumer distribution channel is represented in Figure 14.
142
Serra do Mel has 1.196 agricultural plots planted in cashew, for approximately 800 owners.
136
Claro FT Own
Stores/Online
Shop
Product
Supplier
Product
Processor
Product
Supplier &
Processor
CooperCaju
•Quality Control
•Bio &FT
Certification
•Commercialization
•Packaging for Export
•Logistics
•Training
Claro Fair
Trade
•Quality Control
•Mix with different
powders
•Final Packaging
•Logistics
Retailers
Consumer
Other
Industries
Figure 14: CooperCaju distribution chain for exports in FT.
6.1.2 Price Definition
CooperCaju tends to apply a collective decision making process for all relevant
discussions, including the long term partnership contract with Claro, as well as
the price for the next crop.
Setting the amount to be paid producers begins with a meeting to review costs
and decide a fair price, which in the case of CooperCaju is the one that makes it
possible to support the producer’s family during the year.
All members are invited to participate. Costs are calculated according to the type
of activity.
The price offered on the street market is also taken into
consideration.
The amount to be paid to the producers is agreed upon, the cooperative adds on
its activity costs for selection, packaging, commercial administration and
logistics to the port, which are the main activities. This entire process is done
with transparency and spreadsheets are presented to the buyers upon request.
This process influences responsiveness and timing, due to the fact that most of
the members must be heard, market prices must be checked, and there is a whole
set of internal negotiations to arrive at the price.
137
The buyer’s perception is that the producer organization is not interested in
selling and that they are not professional in pro-actively establishing the product
price for the next season. “We have to ask them about the prices for the next
crop” (Buyer).
It is with this final price in hand that the Cooperative will negotiate with its
international Fair Trade buyers.
As in any conventional trade relationship, the buyer always considers that the
price is too high, and the seller believes the counter-proposal is too low.
“There is always this mentality of rising prices. The price is very high for cashew
nuts” (Buyer).
“The last time we raised prices was in 2007.143 There is constant turnover in the
contact people at Claro, and the new ones do not know about it”
(Cooperative).144
This is where the Fair Trade minimum price comes into play.
In the case of cashew nuts, as this is not a commodity product and for reasons of
growing demand, the minimum price defined by the FLO serves more as
reference and benchmark which helps the buyers sustain their position.
For the cooperative president, what matters most in the Fair Trade price
definition is not the minimum price per se but how it is built-up, with open
spread-sheets. It is the transparency with which the price is defined.
The buyer shares the same beliefs on the differences between prices in a
conventional or in a fairer trade relationship: “To sell their products not in a
squeezed way. With a price that makes absolute sense for all the parties.”
In order to exemplify the value chain for organic cashew nuts and Fair Trade, in
May of 2011, the price per kilo for organic cashew nuts type W180 (highest
quality) according to the FLO list was USD 10.71/kg, when the market price was
already USD 17.5/kg FOB.
143
144
“A ultima vez que nos atualizamos preço com a Claro foi em 2007.”
“É que a Claro sempre tem uma mudança de pessoas. Ai quem entra não sabe disso.”
138
The final price per kilo for the bulk product (non-organic and without the FLO
fair trade seal, since this is not a possibility for the domestic market) at the point
of sale in Sao Paulo was USD 32.7/kg. The price of packaged cashew nuts with
condiments at the final point of sale to the consumer in the Swiss market is USD
69.20/kg.
What seems to make a large difference though, is the possibility of pre-financing
or anticipated payment as overall these small producer cooperatives do not have
the needed cash-flow to pre-pay producers for the delivered product before
international sales. “Pre-financing is extremely important to us. We don’t have
working capital” (Cooperative).145
6.1.3 Local Context and Self-Image
Due to the various waves of immigration that concentrated ethnic groups in
different regions of Brazil, for example, the Italians and Japanese in the state of
São Paulo, the Germans, Poles and Swiss in Santa Catarina and Rio Grande do
Sul, the Portuguese and Dutch in Rio Grande do Norte and Pernambuco (Ribeiro,
1995), there is a strong sense of regionalism among Brazilians and a number of
cultural traditions that are specific to each of these groups (Leersen, 2007).
The internal image of the Northeast region is that of a traditional society with
hierarchical structures and strong traits of machismo. It is the father of the
family who manages the business and, most often, property in the production
area is transferred from father to son. There are few women members of the
cooperative and meetings are predominantly attended by men. “The women
work, work and work in the family production unit, but when it comes to the
managing side of it, especially the money management, and how much one
makes out of the activity, then this is done by the men” (CooperCaju).146
145
“Pre-financiamento é extremamente necessario. Nós não temos capital de giro.”
“As mulheres la trabalham, trabalham e trabalham na unidade familiar. Mas na hora da gestão,
principalmente na hora da gestão do dinheiro, e quanto ganha, isso são os homens que fazem.”
146
139
During my first visit and field work at CooperCaju, in January 2009, the
president invited us for lunch in his house and, as I arrived, he said: “Welcome.
The women are in the kitchen. Go and join them there.”147
In relation to machismo, what can be observed in the case of CooperCaju is a
transformative process, originating from within the community itself, a
movement to include women in the economic activities of the family unit and the
management of the cooperative.
In 2010, CooperCaju elected a woman as president. The process was not easy
since despite the candidate having 70% of the votes and a history of respect and
credibility, she and the then manager, also a woman, faced strong opposition
from a member who did not agree to have women in the cooperative’s
leadership.
Until June of 2010, the cooperative had been presided over by the same member
for four three-year terms; the first term was gained by replacing the president
who left office and then two terms were by election.
A candidate can be
reelected twice sequentially at most. In this case there were three mandates as the
candidate was a replacement in the first term.
The group of directors was also made up of associates who were founding
members. The process of transition to new generations of command, in the areas
of production as well as in the cooperative management team has become
essential to its survival, and for the continuity of the family units.
The current president sees her role as articulating the process of including young
people in cooperative management.
In a line of a local identity definition, the cities of Mossoró and Serra do Mel are
in a moment of “in-betweenness” (Bhabha, 1994) and in a process of recovering
its past history that has elements which are uniquely regional and without the
historical shadow of the Dutch and Portuguese, and with the distinctions from
the South and Southeast of Brazil.
147
“Bem vida. As mulheres estão na cozinha. Pode ir la.”
140
The Museum of the Resistance148 has been in existence in Mossoró since 2008.
This is an area for open exhibits in the main square of the city and where the
story of the armed battle that led to the defeat and expulsion of the armed group
led by Lampião149 is told.
Mossoró is considered the only city that resisted an attack by the group, and the
creation of this center of memory to commemorate the historical event of citizens
uniting and winning out over a group feared throughout the region, nourishes the
process of belonging.
In January of 2011, CooperCaju held a week of workshops to define their
strategic plan, which ended with a local theater performance organized by the
public school, in the format of cordel150 precisely with the objective of rescuing
local culture.
These examples are part of a process of creating regional self-esteem in response
to the stereotypes held by the Brazilians from the South and Southeast of Brazil
about the people from the Northeast.
The stereotype is that of being a group which migrated from a poor region
devastated by drought, the image that they don’t work and that they are
supported by the rest of the country. “Historically the “Nordestinos” have been
viewed here in Brazil as a drain on public resources, as those who are pathetic
beggars. People have to understand that we are not lazy and that we do work”
(CooperCaju).151
The point of Brazil being outside the radar of the international agencies that
support socio-economic development due to the perception or fact that the
148
http://www.natalonline.com/mossoro/ and pictures in
http://pt.wikipedia.org/wiki/Ficheiro:Memorial_da_Resist%C3%AAncia.jpg
149
Lampião is a folk hero and recalls the Robin Hood myth.
150
http://www.teatrodecordel.com.br/ Cordel is an oral literature. The rhythm of words lends the
tone to the story that is narrated. It is printed in sheets and the cover is adorned with a woodcut
(xylograph) http://www.teatrodecordel.com.br/.
151
“Ao longo da historia o nordestino foi visto aqui no Brasil como aquele que pesa aos cofres,
aquele que pede como coitadinho. As pessoas tem que entender que a gente trabalha e não é
preguiçoso.”
141
country can resolve its domestic deficiencies by itself is treated in chapter 2
about Fair Trade in Brazil.
Depending on the commercial partnership that has been established, it is possible
that ATOs support cooperatives to find solutions for their organizational or
financial problems.
CooperCaju is facing hard times when it comes to cash flow. Although they have
been offered help by the buyers, they prefer to seek domestic resources through
project presentations.
This decision is not just due to the fact of Brazilian organizations being one of
the options for resources, but also part of their own pride, and that they should
look for other solutions, even when these are not quite available.
“We need support, but we think that first this has to be achieved in Brazil. It is
important that we do not let our self-esteem become foolish pride and that we die
due to a lack of modesty” (CooperCaju).152
There is a strong civic awareness and participation. In the last presidential
elections, members of CooperCaju mobilized to support their preferred candidate
(from PT – the Labor Party), preparing and carrying out a campaign via the
internet and making their vehicles available to bring people from the more
remote areas to the polling places.
The result was positive and their preferred candidate won the election (Dilma
Roussef) at the municipal level with double the number of votes of the
opposition candidate. The current mayor of Serra do Mel is from the PSDB
(centre-right Social Democracy Party).
Unfortunately, the right of free expression, the strengthening of the voice of civil
society and the questioning of local government’s (un)ethical behavior can still
be penalized in a lex talionis style and ‘opponents’ may be silenced by being
murdered.
152
“A gente esta precisando de apoio, mas a gente acha que isso tem que ser conseguido no Brasil. É
importante não deixar que a autoestima se transforme em orgulho besta e a gente morra por falta de
humildade.”
142
This was the case of a journalist; blogger and president of the PT (Labor Party)
in Serra do Mel. On June 15, 2011, Ednaldo Filgueira, 36 years old, was shot
dead by three killers (matadores) as he was leaving his office. Newspapers and
local people link the crime to the fact that Mr. Filgueira published criticism of
the local city hall in his blog.
The crime was published in many newspapers and blogs, including the Guardian
newspaper153 and this puts pressure on the national government to send nonregional, and therefore politically neutral police investigators to find those who
killed the journalist and look for the person who contracted the killing.
Reporters without Borders announced: “The marked political tensions in Serra
do Mel suggest that politics may have been the motive for Filgueira’s murder. In
the Filgueira case, the entire local political class can play a key role by
constantly insisting on the need to shed every possible light on this murder for
the sake of the defense of civil liberties and the democratic debate.” 154
Reporters without Borders also note that this part of Brazil has a significant
organized crime presence and that the way Filgueira was murdered “had the
hallmarks of a contract killing.”
The Federal Police was following up the case and arrested five suspects; one of
them is the mayor’s brother. This situation led to a complete climate of
insecurity. The people were afraid to leave their houses and stayed in, with
locked doors, with several guesses about who would have contracted the killing
and why, and worried that their conversations (on the phone or on the web)
might be recorded.
We still do not know the impact this situation might have on the local democratic
relations and if the criminals involved and killing contractor will be punished and
153
http://www.guardian.co.uk/media/greenslade/2011/jun/24/journalist-safety-brazil (or)
http://correiodobrasil.com.br/o-cerco-aos-assassinos-do-blogueiro-do-rn/267290/ (or)
http://storify.com/jeanprytyskacz/brazilian-blogger-assassinated, accessed on August 2, 2011.
154
http://www.pressenza.com/npermalink/local-blogger-and-politician-gunned-down-in-rio-grandedo-nortex-motive-unclear, accessed on August 2, 2011.
143
how. It is also not clear how the cooperative will manage to re-establish a sense
of trust among their members.
6.1.4 Collaboration Networks
CooperCaju has support from the Programa Desenvolvimento Solidário
(Solidarity Development Program) of the state government which provided the
investment necessary to purchase computers and infrastructure for internet
access and the remodeling and expansion of the cashew classification
warehouse155, to be able to work simultaneously with organic and traditional
cashew nuts. In 2010, the Programa Desenvolvimento Solidário also supported
a trip to Germany for the CooperCaju commercial manager attendance at an
international trade fair.
The cooperative bought a truck with support from the Banco do Brasil
Foundation which provides funds for infrastructure investment. And although
they collaborated formerly, it has been five years since there have been
partnerships with SEBRAE.
The Ministério do Desenvolvimento Agrário (MDA) (Ministry of Agricultural
Development) used to support156 the participation in international trade fairs such
as Biofach and the Salone del Gusto which also includes preparing participants
for their presentations at the fair.
CooperCaju, through its current president, carries out activities in the EcoJus
Network for Fair Trade and a Solidarity Economy. To meet the international
growing demand for cashew nuts, CooperCaju, with support from the Ministry of
Agricultural Development organized a Cashew Meeting, in Areia Branca (a city
close to Serra do Mel) at the beginning of June, 2011 to define ways of acting
together to supply the product.
155
In the first phase, the expected investment is of R$46,000 (USD 27,000), and in a second phase,
R$79,000 (USD 47,000).
156
As of 2011, aiming at better controlling the high public debt, the Ministerial budgets have been
reduced.
144
6.1.5 Expected Challenges
During a visit in January 2009, CooperCaju declared that one of its challenges
was the construction and definition of a line of succession.
The change of generations is another of the big challenges in the area, and as one
result it has been creating a concentration of lands in the region. The cooperative
chose six children of producers who would like to collaborate and participate
more actively in the cooperative and is investing in preparing them so that they
can take on important functions in the cooperative in the short term.
On July 25, 2010 a new president was elected and CooperCaju is under the
direction of Terezinha Oliveira, a 52 year old agronomist, who has been a
producer member since 1997, and earlier held the post of director and is an
opinion leader about promoting family farming in several groups on fair trade
and family farming in Brazil.
As one of the first results of her mandate, CooperCaju received the FLO Cert
certificate in February 2011. The cooperative already had the organic certificate
issued by the IBD, from 1995 to 1997, and now regained it in 2000.
Among activities programmed for 2011, there was the week of lectures on Fair
Trade and Cooperativism in Serra do Mel in January.
The cooperative’s most urgent issue is to manage the supply contracts and meet
its needs for working capital given the poor harvest from 2010, a result of
drought and strong winds at the time of flowering.
145
6.2
Claro Fair Trade
Claro Fair Trade started its operations as OS3 (Organization Suisse Tiers
Monde) in 1977. Its first trade contract had been a year earlier with a cooperative
in Bangladesh that produced jute bag. In 1997 Claro Fair Trade incorporated
OS3. Currently, their large product portfolio includes coffee, tea, honey, rice,
nuts and handicrafts.
In their business model, they seek to buy directly from small-holder producer
cooperatives. In their webpage they state that157: “Claro Fair Trade trades from
person to person. Channels are direct and personal, the organization and
structures can easily be surveyed”. The products sale is done either through their
own 17 shops all over Switzerland, or through online sales and other alternative
organic and eco shops. In terms of sales sources, almost half are concentrated in
Switzerland (52%) and the other half (48%) are exported.
They have developed a producer promotion fund by allocating 1% of each online
sale and from private or corporate donors. A report on how this fund is used is
available in the annual report.
Claro’s positive reputation in Switzerland, due to their long-term and consistent
work in applying direct trading from small producer organizations, provides
them with a strong brand in the market which does necessarily require the Max
Havelaar/FLO label.“The Claro logo on a product is a guarantee that the product
originates from Fair Trade. Claro fair trade buys all products in accordance with
the standards of the European Fair Trade Association (EFTA) and World Fair
Trade Organization (WFTO)”.158
Claro is a trend setter when it comes to transparency. Their annual reports for the
last three years, which includes a financial report checked by an external auditor,
is available on their website (full version in German and summary version in
English). There is also an area for investor relations on the website.
157
158
http://www.claro.ch accessed on July 16, 2011.
http://www.claro.ch accessed on July 16, 2011.
146
Their final price to consumers is also available, which is very helpful for
producers as they can access the final price of product on the shelf.
In terms of participating in collaborative networks, Claro is one of the founding
members of the Swiss Fairtrade Association and a member of the WFTO for
matters related to the producers and the EFTA for targeted European parliament
relations. They also participate at the Forum Freiwilligenarbeit.159
Claro’s tagline is “trust is the basis of our business”.160
6.2.1 Pre-assessment – Claro’s communicated fair trade messages to
consumers
There is a dictionary of terms on Claro’s website which clearly addresses some
of the Fair Trade constructs as well as a link to UN’s website with a list of the
Landlocked Developing Countries.161
Claro’s dictionary also includes their view about monitoring, globalization,
sustainability and international trade. In all of them they provide an up-to-date
perspective on some of the traditional development aid and Fair Trade
constructs.
This shows that Claro is open-minded and cares about what is behind constructs
and how to adjust them to in relation to their beliefs.
In relation to the North-South construct, Claro adopted the term developing
countries in the south.
The company completely moved away from, and does not perpetuate, the image
of the marginalized and poor. On their website, product communications and
annual report, illustrative pictures show producers as they are, and they refer to
them as trade partners.
In line with a movement towards reducing the distance between producer and
consumer, on Claro’s online sales website there is information on the source of
159
http://www.forum-freiwilligenarbeit.ch/
Translated from German by the author.
161
http://www.claro.ch/claro-dictionary.16+M5d637b1e38d.0.html accessed on September 21, 2011.
160
147
the cashew nuts, reporting on both the country of origin and the supplying
cooperative; it includes a link to an explanatory folder about the cooperative.
6.3
Brazil in the view of Claro Fair Trade
Claro buys from only one cooperative in Brazil: CooperCaju; what from their
perspective limits their country image to one specific type contact in the country.
Along the 20 years of this commercial relationship, Claro representatives have
traveled once to Serra do Mel. In the meantime, local delegates were hired to
visit and help moderating all sorts of issues. “We buy from Brazil because we
knew someone there; it was by luck that we got in contact with them” (Claro FT).
In terms of professionalism, infrastructure and willingness to do business,
comparisons and associations are made with Africa (in terms of cultural behavior
in communicating), Thailand and Bolivia. “In Africa they make up a story about
that [on why they did not deliver something which has been promised]. They try
to explain all the things. And they try to get out of it in a good way” (Claro FT).
Thailand is referred to as a good example of a country where the producers are
perceived as being eager to do business. In Bolivia producers are better
organized, due to the longer experience in selling through Fair Trade.
Brazil is not perceived as a country with producers involved in Fair Trade,
especially when compared to Peru and Bolivia, where they do business for a long
time. “In Brazil, FT is not that well known, not for long. It is growing there. It is
not yet in people’s minds” (Claro FT).
The strongest country stereotype that came up was carnival and its influence on
the product delivery date, generating delays.162
162
When asking CooperCaju if Carnival would impact their delivery dates, they replied in the
negative. And they found it interesting that this was not the first time someone had asked them about
the influence on carnival in the entire production process.
148
Switzerland in the view of CooperCaju
CooperCaju sells to Switzerland and to Italy. Due to the proximity of Latin
cultures, they feel more comfortable doing business with Italy, although their
priority is to first comply with product demand from Claro FT and only then to
sell to other customers.
The cooperative members, especially the long term ones, are not totally unaware
of the Swiss culture and associated behavior as they had contact with the Swiss
social entrepreneur who supported them in getting the cooperative established
and with the first contract with Claro FT. People from CooperCaju would often
ask him about the Swiss culture and way of living.
Overall, CooperCaju views the Swiss people as very reliable and trustworthy.
After their last delivery to Claro FT, in 2010, they were informed that part of the
product exported was damaged at arrival and that they had lost a large part of the
total amount sold.
CooperCaju received the news and absorbed the losses based on the information
and pictures sent by Claro FT. Nobody from the cooperative went to the port in
Europe to check whether, what they were told, was true. They trusted the
information provided by their commercial partner.
Once they asked this social entrepreneur if he could explain how life was in
Switzerland. He gave as an example the fact that in Switzerland you leave the
money at the post box and the newspaper delivery person comes, takes the
money and leaves the newspaper. Nobody will steal or touch another’s money or
newspaper.
After this story, when the local people refer to Switzerland they always say:
there they don’t steal.
They also perceive the Swiss as being distant and cold. Comparing to their
Italian buyers, they say that they have already been to Serra do Mel twice, while
Claro FT has only been there once.
149
6.4
In Figure 15, in the next page, there is a set of consolidated statements on how
each side has valued the other’s behavior and provides the main cultural
elements and image of the other, which will be the basis for this specific
intercultural commercial relation analysis.
It is interesting to observe that the cooperative did a mea culpa towards the
behaviors they had which were not in line with expectations not only of this
specific buyer but also by other business partners, international or not.
At the same time, the buyer could not see anything better in the way the
Brazilian producers do business, and there were also no insights or self-reflection
about what they could do better. This can also signal a strained relationship,
mainly due to the lack of an efficient communication channel that would work
for both cultures.
Along the interviews with CooperCaju and Claro, the reported communications
and expectations mismatches were not always culture based, but rather
commercial related
The ones related to the different cultural backgrounds include communication
style; trustworthiness, hierarchical structures, gender issues, not being able to
say no or to give feedback, and time management. The commercial ones include
concern for product quality, low market oriented mind-set and the high
criminality level in Serra do Mel.
150
Figure 15: Valued cultural differences in the way of doing business
accessed during the interviews for Case Study A.
Communication
Trust
Cooperative
valuing Buyer
(-) “There is a
constant change of
contact people at
the company,, the
new ones do not
know about the
previously agreed
conditions.”
Cooperative self
valuation
(-) “It is just that
sometimes things
look obvious to us
and we think we
don’t need to talk
about it.”163
(-) “Many times we
fail to
communicate.”164
(+) “When you do
business with a
Swiss you know
that what has been
agreed upon is
what
will
be
done.”165
(+)“They make a
commitment with
us and say that in
a certain date the
payment
deposit
will be made, we
know it will be
there. 166
(+) “To value the
principles of Fair
Trade”.167
(-) “And us, on the
other side, we have
to try very hard to
have this same
behavior.”168
(-) “And there is a
culture of thinking
that a commitment
can
be
flexibilized.”169
(-)“It is a
characteristic that is
not good this thing
that you see that you
cannot do it, but you
do the business and
then you have to try
to make it work.”170
Buyer valuing
Cooperative
(-) “It is just silence,
complete silence.”
(-) “To have just one
contact person and
when the person
cannot be there,
there
is
no
replacement.”
(-) “The quality of
the information is
also different.”
(-) (about the
promised pictures)
“Never, ever
anything arrived.
We are still
waiting.”
163
“É que às vezes as coisas parecem obvias para a gente que acha que não precisa falar.”
“Muitas vezes uma falha nossa de comunicação.”
165
“Quando você faz um negocio com um Suíço você sabe que esta valendo o que foi acordado.”
164
166
“Eles assumem um compromisso com a gente e dizem, olha, tal dia vamos estar
depositando na sua conta, e a gente sabe que vai estar.”
167
“Valorizar os principios do Comercio Justo.”
168
“E nos temos que nos esforçar muito para ter esse mesmo comportamento.”
169
“E tem um cultura de achar que compromisso pode ser flexibilizado.”
170
“É uma característica não boa nossa é essa coisa de você ver que não vai dar e você fez um
negocio para depois ficar tentando.”
151
Time
Management
Concern for
product quality
(non-cultural
element)
6.4.1
Cooperative
valuing Buyer
No
statements
were made
Cooperative self
valuation
(-) “We have to
improve sticking to
what we commit to,
and to the
timing.”171
(=) “To value the
product quality”172
No statements were
made
Buyer valuing
Cooperative
(-) “And sometimes
the result comes, but
the timing is not
there. So you can’t
rely on the timing. ”
(-) “They live in a
no-time zone.”
(-) “There are huge
differences
in
reaction time.”
(=)
“To
value
product quality.”
Communication
During the interview with Claro Fair Trade and CooperCaju some situations
were brought up as examples of the dialogue during their commercial
relationship.
The first example was The case of the not-delivered pictures.
At the Biofach in Germany in February 2010, Claro requested that CooperCaju
send them a set of pictures of the production process, step by step. Until the
moment of the interview at Claro’s office, in October 2010, these pictures had
not been delivered. “We know that we need this to promote our products. To
promote their products. So, it seems like we want to do business and they don’t.
It could be. That is our perception” (Buyer).
During the interview with the cooperative president, she said she thought that the
manager had sent Claro the requested pictures and she recalled having hired a
professional photographer.
171
172
“Nos precisamos melhorar essa questão de compromisso e prazo ”
“A questão da valorização da qualidade.”
152
Instead of directly asking the buyer if the pictures had arrived and where they
would be published, the manager checked their website and took it personal that
they preferred to publish pictures from other producers rather than those from
CooperCaju.
This shows a tendency to see shades in the communication (why is it they are not
publishing our pictures), for lack of directness (not approaching the other part
and asking what was going on) and of taking things personally and against them
(they did not show our pictures because they don’t like us).
“Sometimes I go to their website and I see beautiful pictures from Africa and I
think: ‘God, why is it that we are never represented?” (Cooperative).173
Speaking a foreign language is also an issue at CooperCaju, and this influences
the response time and the quality of information as the people in the cooperative
need to go through a two steps process: first to proactively communicate about a
topic, demand or question, and second to translate it to English when nobody
speaks any foreign language.
The different languages, both of which are far from being used internationally in
commercial relationships – German and Portuguese, indeed pose a problem. “It
is complicated because we don’t have anyone who speaks other languages.174 At
Claro they speak German, and then they communicate with people who speak
Portuguese, writing in English. It is complicated” (Cooperative).175
“I received the information this year that she [the cooperative president] always
puts my English emails in her online translator and this creates a huge
difference in what I was saying” (Buyer).
Another element refers to the frequency and promptness of information,
feedback, or any sort of communication.
173
“Às vezes eu entro no site e vejo fotos belíssimas da África e penso:’Meu Deus, por que a gente
nunca esta representado?’”
174
“É complicado porque nos não temos ninguém que fale fluentemente nenhuma língua.”
175
“Na Claro, eles falam Alemão. Ai quando alguém que tem como língua materna o Alemão vai
conversar com alguém que fala Português e que vai escrever em Inglês...é complicado.”
153
“They complain a lot about the lack of communication. One of the things is to
have time to translate to another language” (Cooperative).176
“I think miscommunication implies there is communication” (Buyer).
All key activities are centralized by the cooperative president, including
communication and email replies to buyers. They are aware of this and have
started preparing a person, the cooperative manager, to take over this
responsibility, but the person decided to leave the cooperative due to a situation
of machismo from one of the members. “The difficulty with communication is
that today everything is on me, that I have lots of other activities. I admit that
this is really a problem” (Cooperative).177
“They [Claro] want to know everything that happens at CooperCaju. And we had
not perceived the need…and its importance” (Cooperative).178
As the cooperative is highly context-oriented for communications, they did not
realize the need to “explicitly” inform the buyer about their activities or about
possible issues. But if they do not communicate, how will the other side, which
is out of the context, learn about what is going on at Serra do Mel?
Still in relation to the lack of communication from the cooperative side, one of
the buyer’s comments was that “No is also an answer”. This is an example of the
expected direct answer by the buyer. The producer on the other hand, due to a
mix of indirect communication with the embedded cultural difficulty in saying
‘no’ to a foreigner, will prefer to keep silent.
Taking into account the power relations, hierarchies and the machismo
environment in which CooperCaju is embedded; one cannot expect them to feel
comfortable in giving negative news to a foreign buyer.
176
“Eles reclamam muito da falta de comunicação. Uma das coisas é ter tempo para estar
traduzindo para outra língua.”
177
“A dificuldade da comunicação é assim: hoje fica tudo comigo, que tem um monte de outras
tarefas e eu reconheço que isso realmente é um problema.”
178
“Eles [Claro] querem saber tudo o que se passa na CooperCaju. E a gente não tinha percebido a
necessidade. E a importância disso.”
154
The cooperative’s statement about the behavior of not communicating when
something starts going wrong confirms the influence of their social-political
context and the difficulty in challenging the word of a foreigner or of not
following what has been agreed.“If I see that I cannot accomplish something,
then I must have the courage to say: look, I cannot do it this way”
(Cooperative).179
The conclusion based on the reported situation is that communication flow is
affected by basic elements like the fact of both sides not speaking a same
language, to local cultural aspects very much based on the hierarchic relations
still very much present in the North and Northeast of Brazil, in which the locals
will hardly ever dare to question someone perceived as more knowledgeable and
in a higher rank, what is the case of foreign buyers.
This is where the when the behavior of saying yes when they mean no, or, in the
case of CooperCaju, when no means no communication comes into play and
leaves the other side of the commercial relation in the open air, without the
needed information to move on with product sales in Europe.
The other element is the multi-talk environment which together with a small
working team turns it almost impossible to plan and accomplish activities.
Last but not least, there is the influence of the emotional nature of people in
Serra do Mel. This affects both lack of ability to say no and the local people self
confidence when the buyers does not visit them or when the directness is
perceived as being rude.
6.4.2
Trustworthy Relationship (and its different understandings)
The second reported example was The case of the damaged products delivery.
At the beginning of 2010 some of the exported production arrived damaged in
the European port.
179
“Se eu vejo que não vou conseguir cumprir aquilo ali, então eu tenho que ter a coragem de dizer
‘olha, dessa forma aqui não vai dar.”
155
While for the buyer a direct and proactive communication was expected as a sign
of the long term trustful relationship, for the cooperative it was the opposite. In
CooperCaju they believed that by taking the negative news from Claro without
expressing any doubts and not sending anyone there to check out the situation
was a sign of their trust in Claro, even if this badly affected the family farmers’
income.
“We did not hear anything from them about the quality problem. We heard from
our clients who recognized that and informed us. And we passed the information
along to CooperCaju” (Buyer).
When questioned by members during internal discussions about whether to trust
the Claro report on the loss of part of their production, the president said: “Claro
paid us 50% in advance, as they always do, and gave us three months to deliver
the product. So we do not accept that members come to us and question these
people who have always trusted us”.180
This production loss had a significant impact in the community, as it meant much
lower income for the producers’ families. Due to member pressure, the
cooperative director asked the priest if she should send someone there to check
whether there were insects and in how much of the delivered cashew nuts. The
(Italian) priest replied that: “If this would have been in Italy, you would have to
go there and check. But the Swiss you can trust”.181
This Italian priest’s statement is the master-piece of this commercial issue and
confirms the (positive) stereotype of the Swiss being trustworthy people.
The cooperative president also takes the example of this delivery problem to
exemplify why Fair Trade, in her experience and expectations, is different from
conventional trade: “If it would have been in conventional trade, now we would
be out of business. Claro gave us time to overcome the production problems and
is still doing business with us.”
180
“Eles adiantaram 50% de um pedido, que eles nos adiantam sempre. Então a gente não permite
que se faca esse tipo de interrogação, com quem tem confiado na gente”
181
“Olha se fosse na Itália vocês precisariam mandar alguém, como é na Suíça vocês não precisam
não.”
156
The overall analysis of this reported situation is that cultures see the proof of
trust differently. While for CooperCaju they would signal it by not posing doubts
to something their trade partner informed them, even if that had a high economic
impact locally; for the buyer, trust would have been transparent and pro-active in
asking back what happened and in proposing possible solutions.
Another relevant element is that trust is directly related to being reliable. The
current buyer lack of trust in the cooperative is not at all based on cultural
element but rather on the fact that product delivery was often late, that no
immediate and clear information is provided and that one of the loads were
damaged when they arrived in the European port.
6.4.3
Time Management
The absolutely different approaches towards time management for Swiss and
Brazilian people and organizations could per se be the main reason for possible
misunderstandings between companies from these two cultures that try to
develop a commercial relationship together.
In CooperCaju’s office in Serra do Mel, doors are always open and members can
come in and out at any time. Those working at the cooperative will take their
time to listen to member requests and, at the same time answer the phone and
send emails.
As is the case with many organizations in Latin America, CooperCaju operates
in a synchronic timeline, and management does several activities at the same
time. This is aggravated by the fact it is a small company that relies on the
product delivery timetable and amount agreed upon with producers who are from
family-run farms, which are also very dependent on nature (the environment). It
is impossible to control whether it will rain when it is needed for the cashew to
flourish; or whether it will be dry when it is time to harvest and dry the cashews.
157
When asked about what affects the timing for product delivery, the cooperative
president said: “many things [one should take in account that] these are family
run production areas and not a factory.”182
For the Swiss buyer operating at the very extreme of sequential time
management, dealing with these producer organizations can be very stressful.
“Sometimes we think they are in a ‘no-time zone’ there. And that is sad for the
business” (Buyer).
6.5
Conclusions
Overall, the buyer is so schedule oriented that they do not contextualize. And the
cooperative is so context oriented that they do not see the urgent need to develop
a better and more frequent flow of communications with the buyer.
Not operating at the same speed or on the same track, the collectivist nature and
the different priorities results in a domino effect which causes the perception that
the other side (the producer organization) is disorganized and has questionable
management capability and professionalism.
For the cooperative, operating in a synchronic time model, they will have in the
back of their minds that they need to reply with information and the agreed-upon
services and products at the time agreed upon with the sequential time partner.
An orientation towards the community, and group harmony and cohesion seems
to come first for CooperCaju’s management and its members, and this affects
delivery time. “If you have a family working on the plantation and one of them
gets ill, then that family will probably not deliver the agreed-upon quantity”
(Cooperative).183
The result is that they will coordinate ten thousand things in parallel, will not
give feedback on the expected time and plans can change at the moment of
execution. But they will expect and hope to deliver the product around the
agreed time. In this sense, coordination based on time management does not
182
“muitas coisas [se deveria levar em conta que] são unidades familiares e não uma fabrica.”
“Voce tem uma familia trabalhando e ai adoece uma pessoa daquela familia, entao ela ja nao
entrega a quantidade prevista.”
183
158
work. “Producers are much too centered on their activity. We forget to see that
there is a whole set of relationships and distribution network out there which is
already committed” (Cooperative).184
Each side has the perception that they are the ones who are investing in the
continuity of the relationship, and that the other side does not move towards this,
or does not care.
“It has to be both sides that cooperate. And for now our view is that we want to
do something and they don’t respond. Perhaps they have this same perception,
but I don’t think so” (Buyer).
Nevertheless, both sides are willing to continue with the trade relationship.
“Claro is our priority. I don’t know if Claro realizes how important this
partnership is for us” (Cooperative). 185
“And it is in our interest and if it is in the interest of CooperCaju also to close
out this relationship and to build up a better relationship for the future. This is
what we want to” (Buyer).
The cooperative’s mea culpa confirms that they are aware they have to improve
their commercial behavior, especially related to responsiveness, sticking to their
promises and delivering on time, regardless of cultural differences and carrying
out what should be considered business as usual.
Claro and CooperCaju rely on one of the elements in Fair Trade, which is highly
valued by them and sustains their relationship, the long-term commitment.
“We look into sustainable cooperation. Because you cannot talk about fair
business if you go there and buy a whole container load and then the next year
you change to another producer because they are cheaper” (Buyer).
184
“Os produtores sao muito centrados na sua atividade. A gente esquece de ver que tem toda uma
relacao e uma rede la fora de distribuicao, que tem compromisso.”
185
“A Claro é prioridade nossa prioridade.. Não sei se o pessoal da Claro percebe quanto esse laço
para a gente é importante.”
159
Both sides also constantly rely on bridging actors to support the intercultural
dialogue. First it was the Swiss from Valais. Then, at the beginning of 2011, both
sides looked for the support of intercultural facilitators. Claro Fair Trade sent a
mandate to a Swiss-Brazilian consultant for a spot visit at CooperCaju in order to
check the latest updates from their side in relation to product delivery and other
open issues that might be causing misunderstandings.
CooperCaju has also hired a Swiss-French trainee to support them in
understanding more about final consumer expectations and about the Swiss way
of doing business, focusing on intercultural communications. This trainee
supported them by moderating a meeting to discuss a commercial agreement
during Biofach 2011.
“The Swiss trainee made us understand that the dry and direct way buyers talk
to us is not personal or because they have got something against us”
(CooperCaju, in April 2011).186
A set of proposals in order to continue their commercial relationship was
proposed by both sides.
CooperCaju agrees they should allocate someone specifically for the relationship
with Claro and that they should find the best way to invest in training not only
for a foreign language, but also about the principles of Fair Trade and
cooperativism.
They also proposed a set of activities and behavior they would expect from
Claro, among them that they visit CooperCaju and spend some time with
producers in order to learn more about their local context.
Claro suggested that CooperCaju hire someone responsible for product quality,
and requested more transparency, more frequent communication and a
sustainable development plan for the business.
In terms of hetero-image and stereotypes, from the buyers side there were
references to Africa and the same communication pattern [of finding excuses]
186
“O trainee Suíço nos ajudou a entender que a maneira seca e dura que os compradores falam com
a gente não é pessoal ou porque eles tenham algo contra nós.”
160
and to carnival and its impact on delivery time. From the cooperative side, they
have the perception Swiss people are trustworthy.
The recent murder of the president of the labor party, journalist and blogger from
Serra do Mel shows the lack of minimum safety conditions for those living and
working in that municipality. This will certainly influence communication flow
and product delivery, at least for some time.
161
7.
Gebana Switzerland and Gebana Brasil
Gebana is one of the pioneering organizations promoting Fair Trade in
Switzerland. It started in the 1970’s as the Bananen Frauen movement, to import
and sell bananas from small-holder producers in Central America, seeking better
prices and higher returns for them. The name Gebana comes from Gerechter
Bananenhandeln (fair bananas) which started as a NGO that turned into a
privately held company in 1998, as they planned to increase the assortment of
fair traded products.187
For Gebana, family farming creates economic, social and environmental values
and their aim is to identify markets that would pay for these differentials. They
see their role as builders of a bridge between producers and consumers. This is
represented in Gebana’s tagline – Die Bruecke vom Bauern zu Ihnen (the bridge
from producer to you).
They work directly with producers, identify buyers and make the connection
between the two, coordinating several steps of the distribution chain, including
some of the risk involved in the business. During this process they also
coordinate the controls for quality and traceability.
In Brazil, the first project was in 2001with the banana producers’ cooperative,
APRO-Verde188, located in Guaraquecaba, a remote seaside area in Parana. In
2002 the Brazilian subsidiary was created and started operating locally through a
partnership with the company Terra Preservada (Preserved Land).189
Today Gebana Brazil employs a young team of approximately 15 people. The
product portfolio includes soybeans, lecithin and soybean meal, and due to crop
rotation; producers also grow and sell organic corn, oats and wheat, among
others.
187
http://www.gebana.de accessed on January 10, 2011.
http://brasil.gebana.com/htm/rio_verde_p.htm accessed on January 10, 2011.
189
Terra Preservada was established in 1993 in Capanema, to support the development of organic
production following the line with/of biodynamic production, to organize producers and to do the
commercial interface (PENSA – Programa de Estudos dos Negócios do Sistema Agroindustrial,
University of Sao Paulo, 1999).
188
162
For this case study, once the company has an established office in Brazil that
buys directly from producers, to assess the image of the other, generic and on the
way of doing business from the Swiss, interviews were done with their Brazilian
employees and the Swiss in Brazil.
In order to assess the image of the other, generic and on the way of doing
business, of the Brazilians, the company managing director in Switzerland was
interviewed.
For producers’ self-image, these were contacted directly, as well as the managing
director of the cooperative Gebana partners.
This study report has got a slightly different structure in comparison to the other
two cases. The reason is that as it involves a same company, with operations in
Brazil and Switzerland, the introductions of each partner and respective business
models were not made necessary.
7.1
Business Model
Gebana considers itself a facilitator in the distribution chain, operating in fair
trade, based on their own criteria, which in turn are based on the Fair Trade
movement beliefs, but without the bureaucracy of following a long list of hardto-achieve and costly FLO-Cert criteria, what makes room to adapt to local
context and, in the case of the minimum price, provides the flexibility to react to
market variations.
Due to Gebana’s long time experience and positive reputation in Fair Trade, in
terms of image and customer loyalty, their brand represents social values and this
gives them the option of not having to apply for an FLO label.
What is also different in their model is that they work directly with producers
and in partnership with other local cooperatives. This is one of the reasons they
needed to establish a local operation in Brazil, to be part of the same system
where producers are embedded. As mentioned in their mission statement,
Gebana is part of a holistic structure, based on partnerships in which
environmental concerns, as well as those of all stakeholders, are properly
considered.
163
The supply contracts are set for a minimum of 3 years and a maximum of 5
years. Producers who establish contracts with Gebana are provided with
technical support, lower costs for organic fertilizer and soil analysis, besides
better prices. The organic audit and certification are also part of this partnership
agreement. On average, 300 producers sell their organic soybeans to Gebana.
Differently from the cooperative model in which the cost of services provided by
the organization is deducted from the producer at the time of the second 50%
paid for products, Gebana does not deduct any services, but these are part of the
agreement and aim at promoting better quality, innovative products and
productivity, and it is a loyalty program.
Their agricultural department, through a team of technicians in the field, works
towards technical developments to guarantee organic production with pest and
soil erosion control, the deployment of new products such as high-protein soy
and supports knowledge sharing and information transfer about the latest
technologies. They are also responsible for a seedling nursery to guarantee the
survival of conventional (non-GMO) soybeans.
In this case the bridging element is the company itself, in the figure of the
general manager who established the local office and the local office employees
as well.
The integrated distribution chain part of Gebana’s business model can be seen in
Figure 16, in the next page.
164
Coopafi
Producer
Other programs
(Soypsi, etc.)
Gebana
Industries
Consumers
• Technical Support
•Quality Control /Traceability
•Bio Certification
•Packaging for Export
•Logistics
Figure 16: Gebana’s distribution chain for soybeans from Brazil.
7.1.1
Price Definition
Gebana has its own procedures to define the fair price to be paid to producers
and the FLO minimum price is one of the references. They have developed
different pricing schemes. Depending on the type of product, the premium price
paid varies from 30 percent to 50 percent over the Chicago Stock Exchange
value.
Producers can also choose when they would like to receive payment, as they
have a modality of advanced payment in which the producer can either take the
money or leave it with the company at interest rates which tend to be higher than
market average. According to Gebana, this is a way of helping producers develop
a savings mentality.
From the producers perspective, these have pointed out there is not much
transparency in relation to the product final price once in the European market,
and they would like to learn more about the value distribution along the chain.
“Another point that producers must understand is that each one has its role in
the distribution chain. Producers do not value the work of equating the process
165
to the market. They do not understand why, for example, a product is sold in
Europe for EU3.5 and they get EU0.80” (Gebana Switzerland).190
7.1.2
The city of Capanema, with 18,500 inhabitants191, is located in the state of
Parana, in southeastern Brazil, near Iguaçu National Park, the Iguaçu and Parana
rivers, and the border of Argentina. The formal educational level is high and
several people attend technical training in agriculture in one of the cities nearby.
Family farming structure was naturally the option for two reasons: the first was
geography, as the land is formed by several small hills. The second is migration.
Capanema was the Eldorado of the 1950’s. German, Italian and Polish
immigrants, who were already in the state of Rio Grande do Sul and Santa
Catarina migrated to Capanema, bringing the tradition of family-run organic
farming. Land occupation was legalized in 1960 by a governmental agency.
It is estimated that there are 16,500 hectares of soybeans, with farm size varying
from 10 to 15 hectares each. Due to high environmental control awareness,
which was brought by the first settlers, the region has been producing organic
agricultural products since 1986.
The immigrants who live in the region, although they are the second or third
generation in Brazil, still keep a strong link to their original roots, often based on
the cultural values and traditions from the times their ancestors moved to Brazil.
Comparison between the south and north of Brazil were also common along the
interviews. “There are more NGOs in the North and Northeast because the
people there are poor and they need it […] the people here get more involved
and help each other out more” (producer member).192
190
“Outro ponto é que o produtor precisa entender que cada um tem a sua função na cadeia de
valor. O produtor não valoriza o trabalho de equilibrar o processo ate o mercado. Ele não entende
porque um produto que é vendido na Europa a EU3.5, que ele ganha EU0.80.”
191
IBGE, statistics from 2007.
192
“Tem mais ONG la porque o pessoal é mais pobre... o povo aqui se envolve e se ajuda mais.”.
166
“We don’t know the ‘other’ Brazil” (producer member).193
This behavior of labeling other country-fellows as different is part of a process to
define in-group differences in Brazil (Marques & Yzerbyt, 1988). For the people
in Capanema, to say they are European descendents explains why they have
higher awareness of environmental production and why they work harder
according to them, in comparison to their fellow countrymen in the North and
Northeast, and this is a sign of status.
In one of the interviews with a producer, he said “I am German”. The next
question was, “were you born in Germany?”, “No, my grandfather was”. Even
with a long line of descendents since the last family member was born in Europe,
instead of considering himself a Brazilian, he sees it as a sign of status to say he
is German, even though he doesn’t speak the language fluently and has never
been to Germany.
In the end the family modus-operandi follows a traditional alte Schule (oldschool) way of thinking, where machismo is very strong and hierarchies must be
obeyed. They did not experience the political movements such as trade unionism
and feminism which took place in their grandparents’ country of origin.
“Among the producers, it is always the men who speak, the women are there to
serve the chimarrão (typical local tea) and that is all. If women are not married,
they are free, but after they get married, everything changes” (Swiss employee
in Brazil).194
“Because who takes care of the money-related topics is the man” (producer
member).195
But there are signs of a national “identity” as they mention that Brazilians have
self-esteem, “there are problems, but we can’t just sit down and cry” (producer
member).196
193
“Nos nao conhecemos os outros Brasis.”
“Os produtores, sempre os homens falam, as mulheres servem o chimarrão e é só isso. Se as
mulheres não são casadas, elas são livres, mas depois de casar muda tudo.”
195
“Porque quem cuida dos assuntos de dinheiro é o homem.”
194
167
They also have the self-image of being more aware of the environmental issues
and it is part of their culture to grow organic food, and they care for the local
‘rural’ traditions. “I get the impression that in the South they keep their producer
roots more, you see the farroupilhas197 week they’ve got here, people value their
agricultural origins more” (Gebana Brasil).198
Besides the strong regionalism and the creation of stereotypes, mainly related to
“the other Brazilians”, cultural differences between the rural and urban
communities were pointed out. “The differences are huge. In São Paulo and
Curitiba there is a reality which is closer to the Swiss one” (Gebana
Switzerland). 199
In-group collectivism is very strong in the rural areas, which can be explained by
the need to cooperate and the fact that people know each other, their families,
and that they have less influence from outsiders. This in a way gives the
impression that people living in the countryside are more naïve and honest.
“Here you’ve got a family type of environment, of sincerity, that you cannot
cheat the other person, cannot take advantage. If you ask someone to do a job
for you, if he says he will, you can be sure he will do it and will not take
advantage of you” (Gebana Brasil).200
196
“Tem problemas, mas sabe que não pode ficar sentado chorando.”
Farroupilha is a folk party in celebration of the Farrapos war, when a group led by the local social
elite fought for the separation/independence of the state of Rio Grande do Sul from the rest of Brazil,
which belonged to the Portuguese empire.
198
“Eu acho que no Sul, eles preservam muito mais as raízes dos produtores sabe, você vê as
semanas farroupilhas que tem aqui, o pessoal valoriza mais a sua origem agrícola.”
199
“As diferenças são enormes. Em São Paulo e Curitiba é uma realidade, que é muito parecida com
a Suíça.”
200
“Aqui você tem um clima bastante familiar, de honestidade, que você não pode enganar outra
pessoa, não pode tirar vantagem, se você chega e conversa com alguma pessoa para fazer um
trabalho, se ele falar que vai, pode saber que ele vai fazer isso e não vai te passar para trás.”
197
168
“You know where to find someone from Monday to Monday, you know where
that person will drink a beer, where he will have dinner, what he is going to do,
where he lives, what car he drives, who his children are, who is the wife...so
there is a negative side, and there is a positive one which is the trust one has in
the other” (Gebana Brasil).201
There is a high level of participation in local organizations and associations in
the state of Parana. In general, producers are members of at least three of them,
which is a result of the strong involvement of the civil society in discussions
related to their socio-economic lives. The citizen is a protagonist of the
community’s future. “You go there and talk with the mayor, you start aligning
the secretaries who like it or not help you to start discussing a structure, what
sort of structure [in the sense of governance] we will put here, because public
money is never going to be enough to solve all problems” (opinion leader in
Capanema).202
For product commercialization there are the cooperatives such as Coagro,
Coopafi, ACECAP; for credit there is Cresol203 and Sicredi204; and there are the
very regional ones as every community sets up an association for sharing
equipment, for example the Associação de Pequenos Produtores da Linha
BoaVista (Association of Small Producers from Linha Boa Vista).
In terms of being exposed to different cultures, even living on the border of
Argentina, local people do not speak Spanish. Many of them drive to the boarder
for cheaper fuel, or from Capanema to Foz do Iguazu, where the regional airport
is, through Argentina, and this is the closest they get to the neighboring country.
201
“Sabe onde encontrar de segunda à segunda, sabe onde vai tomar uma cerveja, sabe onde vai
jantar, o que vai fazer, sabe onde mora, sabe qual é o carro, sabem quais são os filhos, quem é a
mulher, então tem seu lado ruim e tem seu lado bom porque passa confiança em cima disso.”
202
“Vai conversando com o prefeito, vai enquadrando os secretários... queira ou não queira ajuda e
ai você começa discutir estrutura, que tipo de estrutura que nós vamos botar aqui, porque dinheiro
público nunca vai ter que chega para resolver todos os problemas.”
203
http://www.cresol.com.br/site/
204
http://www.sicredi.com.br/
169
Capanema producers live in a mono-cultural environment, not just in social
terms, but also in the type of products they grow, and as soybeans do not get
directly to the final consumer, they lack a certain level of final consumer
orientation, what impacts their need for innovation.
There are no comparisons to other cultures and their ways of doing business, and
this sometimes poses as a problem for the relationship between producers and
Gebana Brasil.
7.1.3
In Switzerland Gebana cooperates with TerraFair and Swiss Fairtrade.
In Brazil they have developed joint programs with the cooperative Coopafi.
Gebana supports Coopafi in commercial relations for a contract for organic
soybean-oil with Body-Shop, and the fair trade premium goes directly to Coopafi
(Cooperativas de Agricultura Familiar Integradas / Integrated Family
Agriculture Cooperatives).
Coopafi is a second grade cooperative205 and was formed in 2003. The main
objective was to add more value to products either by processing them or by
developing a brand. Coopafi also commercializes its products on the local
market. Gebana Brasil and Coopafi are also jointly implementing the Soypsi
program.
Through this program, they plan to certify and consolidated the production of
1,500 small-holder family farmers, amounting for 50,000 tons of soy-beans,
following a set of principals which include good commercial practices,
responsible labor conditions, environmental responsibility and good agricultural
practices.
205
Second grade cooperative is that formed by other cooperatives, and not by direct individual
members.
170
7.1.4
Expected Challenges
Although Gebana promotes and commercializes only organic and non-GMO
soybeans, in 2010 some products were identified as having traces of Endosulfan
but at a limit which is not acceptable for the European Union. The economic
impact on the producers’ lives was huge as, although they have raised the crop
following organic procedures, their products got contaminated possibly through
diverse sources like rain water, and sales of the products as organic were
canceled.
To call attention on this issue, they have developed the “Chega” (Enough)
lobbying campaign which is communicated mostly through the social media,
aiming at the prohibition of the pesticide Endosulfan in Brazil206. Endosulfan has
already been banned in more than 60 countries. The main issue is the
contamination of organic plantations through leaching (rain and rivers) or
evaporation when the pesticide is applied in conventional plantations.
Another challenge has to do with the continuity of organic soybeans plantations
in face of a growing increase of GMO led by the large groups Syngenta and
Monsanto. Gebana has started a seedling project in Parana, to make sure that the
original traditional seeds will still exist in the mid to longer term.
In terms of business relationship with producers, once Gebana buys directly, they
are looking for options of partnerships aiming at increasing product delivery
through a commitment in which everybody wins. One of the ideas is that Gebana
Brasil opens the possibility of producers becoming share holders.
7.1.5
Pre-assessment – Gebana’s communicated fair trade messages to
consumers
Aiming at reducing the distance between producer and consumer, in Gebana’s
online bio&fair shop, for all products there is a link to a page with a description
of the cooperative and where it comes from. The product price for the final
consumer is also available, except in the case of soybeans and their by-products.
206
http://www.chega.org/pt/os-fatos/agricultura-organica-em-capanema/
171
Their annual report is not available on line, but in the pages for outside investors,
there is the information that financial results can be sent upon request.
There is absolutely no reference to the North-South stereotype. Gebana
coordinates the purchase and sale, production and distribution of goods which
have mainly been produced or cultivated in economically disadvantaged
countries and regions. The map with references to consumer markets and
producers shows both at the same level.
7.2
Brazil in the view of the Swiss Team
In the case of the Swiss employees in Brazil, the preconceived image they had
about Brazil before they moved there came from travel books and other people’s
references, which focused mostly on the Northeast’s beach cities; and that on the
land of biofuel and cars which ran on alcohol.
“Brazil, sugar, cars with alcohol, dark people, a bit like this image of Bahia.
Then I thought there was a Brazilian, but there isn’t” (Swiss employee in
Brazil).207 After arriving and living for some time in the country, there is a better
understanding about the different regions and ethnicities.
The collectivist nature of Brazilians, which leads to the need to establish closer
ties and to test someone into friendship in order to achieve the ‘personal’ trust
needed to do business, leads to the perceived image of mixing private and
business life. The reverse is also true, as mentioned in the view local employees
have about the Swiss, and the way they define when it is time to work, and when
it is time for personal life, and how they plan their time accordingly.
There were also comments about the fact that in Europe there is an overall
prejudice that “in Brazil people do not work hard to achieve things” (Swiss
employee in Brazil).208
207
“Brasil açúcar, carro com álcool, pessoas morenas, assim um pouco dessa imagem de Bahia. E
isso eu pensei: existe um brasileiro. Mas não existe.”
208
“O preconceito que se tem que no Brasil não se trabalha muito para alcanças as coisas.”
172
The land distribution reform and the Movimento dos Sem Terra (MST –
Movement of the Landless) is also a topic for those working in agribusiness. It is
perceived as a risk for investment in the agricultural area and as being an
extreme left-wing movement.
In the South of Brazil, due to the German, Italian and Polish heritage where it is
still possible to find people speaking their grandparents’ languages and most of
them having the biotype of the Nordics, there is the perception they have the
same cultural values and behave the same ways as Europeans. But this is not the
case. “Independently whether Brazilians are of European descent, they are still
very Latino” (Gebana Switzerland).209
There were some comparisons to China, mainly due to the behavior of following
models that seem to have worked in other countries. This is also linked to a
cultural behavior of taking whatever comes from foreign cultures as better than
the local one.
“The Brazilians are like the Chinese, eager to copy. They copy many things
which they consider good from the United States and Germany. For example,
customer care is very important here” (Gebana Brazil).210
Switzerland in the view of the Brazilian Team
The Swiss have the image of being serious people who have a time for each
activity and tend not to mix what is professional and what is private life (in an
interesting counter-perception of the statements of the Swiss about Brazilians
mixing private life with business).
“This time is for start working that time is for drinking chimarrão, when do we
take chimarrão, during work hours?” (Gebana Brazil).211
209
“Independente de o brasileiro ser descendente de europeu, ele ainda é muito latino.”
“E os brasileiros são como os chineses, ‘eager to copy’, eles copiam muitas coisas que eles
considerem bom dos EUA, da Alemanha. Por exemplo, o atendimento do cliente é muito importante
aqui.”
211
“Tal hora começa trabalhar, tal hora para, e como é que vai tomar chimarrão, aonde se toma
chimarrão, no meio do trabalho?”
210
173
The low contexting and direct communication style are confirmed by the Swiss
being perceived as objective and dry. A bit bureaucratic in terms of laws and
rules, trying to put some order in the perceived Brazilians’ disorganized way of
working (polychronic and monochromic time), aiming at avoiding uncertainty.
Local producers and opinion leaders also have a set of images about the
employees of Gebana Brasil. As the local people know that Gebana is a Swiss
company, and thus have the impression that it is rich, in line with the belief that
all people are wealthy in Switzerland, and that those people working for the
company have the privilege of being able to make mistakes, which can then be
absorbed.
“The impression [producers have] is that the company is millionaire, because
you export […] a Swiss company, you have a lot of money, can make mistakes,
buy expensive and sell cheaply, break your car and the company pays, and
everything is great” (Gebana Brazil).212
7.3
The elements which most frequently came up during the interviews with Gebana
in Brazil and in Switzerland are consolidated in Figure 17, in the next page.
212
A impressão é de que a empresa é milionária, porque você exporta... uma empresa suíça, vocês
tem dinheiro, pode errar, pode comprar soja cara, pode vender a preço barato, ou pode quebrar um
carro que eles pagam, e está tudo bonito.
174
during the interviews for Case Study B.
Gebana
BRA
valuing the Swiss
Gebana BRA self
valuation
Communication
(+) “They are more
clear and direct. If
they say it is 10, then
it is 10.”213
(-) “They are a little
colder and drier in
their talks.”214
No statements were
made
Trust
(+) “They are able to
establish long term
contracts.”216
(-) “Brazilians do not
take some
commitments and
contracts very
seriously.”217
Planning
(Future
Orientation)
(-) “Reaction to
market price
variation.”219
(=) “In the end it was
possible to balance it
out and it has not
become a very dry
and
bureaucratic
company,
the
tendency is towards
having
more
rules.”220
213
Gebana CH &
Swiss employees
in BRA valuing
Brazilians
(+) “I believe
Brazilians are
better at talking
and listening. In
all oral
communications,
they are more
capable.”215
(-) “Notion of what
it means to have an
agreement. A long
term
contract
which needs to be
fulfilled”.218
(-) “Low vision of
the
future
or
planning for the
future”. 221
(-)“Brazilian
producers
don’t
know how to work
based on plans and
projects.”222
“Eles são mais claros, mais diretos e isso é interessante. “Se dizem que é 10 é 10”
(os Suicos) “são um pouco mais frios, mais secos na conversa.”
215
“Eu acho que os brasileiros são melhores no falar e no escutar. Toda a comunicação oral, eles
tem mais capacidade.”
216
“Eles conseguem estabelecer contratos de longo prazo.”
217
“O brasileiro não leva a sério alguns compromissos, contratos.”
218
“Noção do que significa um acordo. Um contrato de longo prazo, que se tem que cumprir.”
219
“Reação a variação de preço no mercado.”
220
“No final conseguiu equilibrar, não ficou com a empresa muito séria e muito burocrática, a
tendência que isso vai partir para o lado da regra.”
221
“Pouca visão de futuro, ou de planejamento para o futuro.”
222
“Falta aos produtores brasileiros saber trabalhar em cima de planos e projetos.”
214
175
Concern for
product quality
(non-cultural
element)
Gebana
BRA
valuing the Swiss
Gebana BRA self
valuation
(+) “They always
expect a bit more
than what we’ve got
here, than what we
have sent, and we
believe we are doing
enough.”223
(-) “The Brazilians
have to improve this
thing of product
quality
a
little,
sometimes the quality
is not there.”224
Gebana CH &
Swiss employees
in BRA valuing
Brazilians
No
statements
were made
There were other elements related to the way of doing business in the
intercultural relationship that showed up in this case study – paternalism and
hierarchical relations.
Paternalism came up in the form that the local people tend to expect that the
company will take care of them. “[people] believe the company has to always
provide for the employee, you have to be the employee’s godfather” (Brazilian
employee).225
Hierarchical relations started by the governmental social class classification
system which declares at which level the individuals are and, in line with their
educational level, they can or cannot take on certain responsibilities. “They [the
Government] declare that a person is middle or lower middle class[...] to be
company manager you have to have this level and to be a technician you have to
be at another level[…] it is highly stratified” (Swiss employee in Brazil).
223
“Eles [os Suíços] geralmente esperam um pouco mais do que a gente tem aqui... Eles sempre
esperam um pouco mais do que a gente manda... E nos achamos que estamos fazendo o suficiente
para atender.”
224
“Os brasileiros têm que melhorar um pouco a questão de qualidade dos produtos, às vezes a
qualidade fica um pouco a desejar.”
225
“[as pessoas] acham que a empresa tem que ser um padrinho do funcionário.”
176
The most often mentioned culture-based elements were: communication in the
sense of oral capabilities and the Brazilian vague statements for both local
people and foreigners, which causes frustration and lack of credibility; mixing
private and business lives; hierarchic structures and gender issues;
trustworthiness; and future orientation. The commercial linked elements include
concern for product quality, and flexibility when it comes to price variations.
These are further analyzed based on both Swiss and Brazilian employees and
producer members’ reported cases.
7.3.1
Communication and Trustworthiness
In this case study, the reported elements of communication that came up had to
do with both style: directness, oral versus written capabilities, and language
issues; and misinterpretation in the sense of “estimating” a situation or outcomes,
and how this also influences credibility once results are not as expected or
“promised”.
The Swiss assertiveness was confirmed by the fact that they are perceived as
being more direct and dry in conversations. Because they are strong in planning
and future orientation, they would probably first need to write to only then be
able to talk about something.
Brazil, on the other hand, is an oral culture, but the lack of a second language
impacts their success level in developing international deals. There are also
language issues. First, because many Europeans, when they arrive in Brazil they
speak Spanish and not Brazilian Portuguese. Secondly, it is rare to find someone
speaking a second language fluently in Brazil and this restricts their developing
an international business.
“I believe in Brazil, Brazilians are very good in doing business, but they’ve got
limits. But this is very much related to the language[…]the Brazilians miss a
177
second language and this is a big difference in relation to the Swiss people”
(Swiss employee in Brazil).226
“I see lots of misunderstandings in the emails and I see that many things are not
well understood” (Swiss employee in Brazil).227
In the case of communications with Switzerland, information which is an
estimate from a Brazilian, once reported and depending on how it is informed,
may be taken as a closed deal, and this is when the disagreements start.
In short, this shows a tendency of one side (Brazilians) to estimate situations
outcomes, rather than confirming after having performed a feasibility analysis;
and the other side (Swiss), due to a “self” and “hetero” image of relying/being
reliable tend to take the information as something set in stone.
In this sense, it is important to make clear if an estimate is an estimate and how
much it is expected to vary. This behavior, which confirms the stereotype of
‘when yes means no’ may lead to frustration when what has been promised is not
achieved. The same happens in the communication with the producers.
“Sometimes, it is not our intention, but we raise some expectations in the
producer ...expectations about price, expectation that next year things are going
to change ... that we will sort out all problems, we raise expectations and then
the guys keep that in their minds, that next year things will be better” (Gebana
Brasil).228
226
“Acho que dentro do Brasil, os brasileiros são muito bons em fazer business, mas fora eles têm
limites. Mas isso é muito relacionado a língua... para os brasileiros falta a língua e essa é uma
grande diferença com os Suíços.”
227
“...eu vejo muitos mal-entendidos nos emails e eu vejo que muitas não são bem compreendidas.”
228
“Às vezes nós sem querer, levantamos uma expectativa naquele produtor, expectativa de preço,
expectativa de que no ano que vem muda, vamos resolver todos os problemas, a gente levanta aquela
expectativa, o cara fica com aquela expectativa de que ‘No ano que vem vai melhorar’.”
178
7.3.2
Future Orientation
Planning and Future Orientation were more frequently mentioned during the
interviews with Gebana in Brazil and in Switzerland than time management per
se. “I miss the culture we have in Switzerland which is of following more
procedures. Maybe because in Switzerland all is just right and predictable. So
for us it is natural to make long term planning” (Swiss employee in Brazil).229
In relation to setting priorities and the way activities are managed, in the Swiss
linear approach, when one says a certain activity should be taken as important, it
means its completion should come first in the activities sequence line. In Brazil,
as people tend to do several things at the same time, an important topic may even
be moved into one of the top ten priorities, but this does not mean it will be
accomplished first.
“…in Switzerland if someone says ‘this is important’ that’s because it is
important to the Swiss person. Here a day or week goes by and later the Swiss
person asks, ‘why haven’t you done that? And it wasn’t because the person
forgot; it was because there were other things that were more important” (Swiss
employee in Brazil).230
This has an impact on the perception that the Swiss are less flexible and cannot
react to instant price variations in the local and international markets, and if there
is a lot of planning, in the end, there is less space for last minute changes, from a
Brazilian point of view.
The Brazilians, on the other hand are taken for not sticking to what has been
promised and that for them contracts can be flexibilised.
229
“Eu sinto falta de uma cultura que temos na Suíça de seguir mais um procedimento. Talvez
porque na Suíça é tudo certinho e é previsível, para nos é natural fazer planejamento de longo
prazo.”
230
“Na Suíça alguém diz ‘isso é importante’ então é porque para o Suíço é importante. E aqui passa
um dia, uma semana e depois o Suíço pergunta ‘por que não fez isso?’ e não foi porque ele esqueceu,
mas porque havia outras coisas que eram mais importantes.”
179
7.3.3
Concern about Product Quality
There are different perceptions about final product quality, what could have two
explanations. The first one is that Brazilians tend to be more “activities
completion” oriented, independently if the final result has been achieved with a
top or medium quality. The second has to do with lack of information on final
product expectations from the European perspective which involve different
perception on quality which go much beyond product, i.e. delivering at the
agreed time and price; packaging; after sales customer service; proper and on
time communications, among others.
7.4
Conclusions
In this case study, the daily interaction between Swiss and Brazilians provides an
intense intercultural location that heads to a constant set of insights in order to try
to understand the other’s behavior and values in relation to one’s own, finding
possible explanations for the differences as well as spaces for adaptation.
This comparison process leads the people involved to reviewing their own way
of doing business and promotes certain changes in behavior.
For the Brazilians, the most stressful intercultural element was the adaptation to
the Swiss extreme uncertainty avoidance, trying to set rules as a way to feel safer
about the multi-task, imprecise, optimistic, activities completion oriented
Brazilian way of doing business, all with a mix between personal and
professional relations.
The Brazilians had to learn that the company is the place to work, besides the
friendly relationships, to be more assertive and more careful about the optimistic
prognosis, and as the company subsidiary is in Brazil. The Swiss had to adapt
themselves to the local Southern culture.
For the company, the result is a hybrid cultural environment, which is neither too
bureaucratic in the sense of procedures to be followed (in the view of the
Brazilians) nor very chaotic and disorganized (in the view of the Swiss).
Besides promoting exchange programs almost every year between employees
from the two countries, they also encourage buyers and partners to visit Brazil to
180
better understand the production processes and the producers’ socio-economic
context.
The local subsidiary is embedded in the local context, living the socio-economic
reality of that specific community, and the management team and employees are
Brazilians. Gebana has got two managing directors, one is a Brazilian and the
other is a Swiss who had been to Brazil about eight times, before moving with
his family to Capanema for establishing the company.
At the moment he lives in Switzerland, speaks Portuguese fluently, and travels to
the country at least twice a year. This provides him with a better understanding
of what is going on in economic and social terms and about the differences
between regions, rural and city cultures.
According to him, the main source of miscommunication between international
buyers and Brazilian producers is that: “the companies (importers) or NGOs do
not spend time talking with the producers and that’s why they can’t see the
problems” (Gebana Switzerland).231
As for stereotypes, it was interesting to observe the more realistic view on who
the producer was. Rather than a marginalized one sitting on the outskirts of the
developing world, Gebana sees the small producers as business people.
Producers are business people. They like to speculate (in the sense of negotiate).
“We worked out ten price models in Capanema” (Gebana Switzerland).232
Nevertheless from the side of producers there is a stereotyped view of the otherfellow-Brazilians in the North and Northeast, as a justification for those in the
South being superior in term of professional organization and environmental
awareness.
231
ONGS e as empresas (importadores) não passam tempo conversando com os produtores e é por
isso que elas não enxergam os problemas.
232
O produtor é um homem de negócios. Ele gosta de especular. Fizemos 10 modelos de preços em
Capanema.
181
8.
Coagrosol and Rivella’s Michel FT Orange Juice
8.1
The cooperative Coagrosol
Frozen Concentrate Orange Juice (FCOJ) is a complex business. It involves an
industry to process fresh oranges into juice concentrate, cool chain technologies
for transportation, and product availability in the international market is mostly
in the hands of four large multinational companies.
On top of it, in the fresh fruits business, buyers may exert pressure to reduce
prices when producers start coming close to losing the product due to its short
life time.
The two main citrus producing countries are the United States, in the state of
Florida, and Brazil, in the states of Sao Paulo, Parana, Rio Grande do Sul and
Bahia. The main difference is that most of Florida production is consumed by the
North American domestic market while in Brazil, 99% is exported.233
Historically, one of FLO’s main motivations for including FCOJ as a product to
be granted the FT label was to provide small producer organizations an option to
escape the market concentration, which leave them at the mercy of one the big
four players.
Small producer organizations must partner with an industry to process the juice
concentrate. The industry invests in production technology and capacity. In
general the plants either belong to mid-sized entrepreneurs, who choose the areas
where there is a large customer base of small producers and cooperatives234, or
they belong to large companies and are located close to their fruit production
sites.
This is the reason that, depending on the region, there may be only one
processing plant available, which gives them control over cooperatives’
production, the price paid for fresh fruit and costs of industrialization.
233
UNCTAD report. http://www.unctad.org/infocomm/anglais/orange/market.htm Accessed on
August 14, 2011.
234
This is also one of the main reasons why so many tropical juices from the Amazon are not feasible
from a business perspective.
182
The local industry, in general, will first give preference to its own production,
and then it will try to buy more fresh oranges at the farm gate. Only after this
option is no longer attractive due to product demand, will it purchase fruit from
other organizations to fill its remaining production capacity.
The processing costs tend to be much higher for those who need to rely on a
third-party’s good-will to open free capacity to process fruit. Considering that the
market price is the same for all, the higher costs for independent orange
producers or small-holder cooperatives make them much less competitive, and
they face the risk of also having to just sell the fresh fruit at the gate.
In contrast to the main land size references expected for small-holder farmers, as
defined by the FLO, the orange juice plantations tend to be larger, with about 20
hectares. There were several discussions among Fair Trade and agricultural
experts before properties of this size would were accepted as small ones by the
FLO.
The process that culminated with the establishment of Coagrosol started in 1999
when a group of small-holder orange producers demonstrated in downtown Sao
Paulo to call attention to the difficulties they have because of market
concentration.
This demonstration got the attention of consumers, the media and of the Fair
Trade organizations which then requested the support of one of the largest public
universities in the state of São Paulo – UFSCAR (the Federal University of Sao
Carlos)235 to develop an outsourcing program in the region where those
producers were based.
Producers first formed an association, Abacitrus and afterwards became a
cooperative, Coagrosol (Cooperativa dos Agropecuários Solidários de Itápolis –
the Cooperative in Solidarity with Agricultural and Livestock Producers of
Itápolis). The discussions and arrangements for the first sales of Fair Trade
235
Prof. Gilmar Laforga, who was doing his doctoral studies about Fair Trade in the beginning of
2000, and afterwards became the director and vice-president of Coagrosol from 2000 to 2006.
183
products were made with Max Havelaar, from Switzerland, and the first contract
was signed in 2000.
The cooperative exports Fair Trade juice to a wide range of countries and
customers, which gives them experience in dealing with diverse intercultural
situations, and a sense of comparison of the ways of doing business with
different cultures.
Besides oranges, they have diversified their product portfolio into limes, guava
and mangoes, both conventional and organic. In 2008, the cooperative’s total
turnover was USD 3.4 million.
The cooperative’s commercial director is a young entrepreneur who was raised
by and inside the organization. His father is one of the founding members and an
orange producer. According to the president in charge, they try to encourage and
give preference to producers’ children to work in the cooperative, and to support
generational transfer.
8.1.1 Business Model
Coagrosol sells to three main customer groups: the beverage industry and the
ATOs, with which it has direct contacts or, in the case of larger retailer private
brands or the high volume beverage production industries, through a trader that
intermediates relations and contract coordination.
Their preference is for a direct contact, avoiding trade companies as much as
possible, as these are one more intermediary in the chain, which retains a slice of
the final price, reducing therefore the income to producers.
From 2000 to 2008 they processed the frozen concentrate in a small industry,
using 20% of their installed capacity. In 2011 they are looking for ways to
optimize both production and logistics costs, by searching for partnerships with
one of the big local players.
184
Producers
Coagrosol
Industry
•Quality Control
• Frozen
•Bio & FT
Concentrate
Certification
•Logistics to Port
Trader
•Source
cooperatives
•Quality Control
•Transportation
to and inside CH
& EU
Beverage
Industry
Retailers/
Food
Service
Consumer
•Processing
• Bottling
• Product
Distribution
Figure 18: Coagrosol Distribution Chain to Switzerland
The Fair Trade Social Premiun is managed by a local NGO called ACREMIR,
(Associação do Conselho de Representantes do Mercado Solidário de Itápolis e
Região). Its board is made up of representatives of religious organizations such
as the Pastoral da Criança, trade union groups such as Borborema Union and
Itápolis Union, Patrulia Midiri and Coagrosol.
8.1.2 Price definition
At the time of the visit to Coagrosol’s office, on August 12, 2011, the FLO
minimum price was USD 2,200 plus the premium of USD200 per ton of frozen
concentrate. The international price for conventional FCOJ was USD 2,500.
If the international price is higher than the minimum, then the organization goes
through a negotiation process similar to the one in a conventional market and this
puts them in the arena of the “wild world of trading, for fighting for something
material, which is money” (cooperative president).236
Besides the process of defining a price for international contracts, which would
cover production costs and pay a higher price to producers than the one proposed
by the larger players at the farm gate; the cooperative also has to deal with
internal issues related to government laws, the establishment of minimum prices,
and financing options at lower costs which tend to benefit the large over small
organizations.
236
O mundo selvagem do comercio. Lutar por alguma coisa material que é o dinheiro.
185
One representative example is that in 2011 the Brazilian Government established
a minimum price for fresh oranges, which was $10.50 Brazilian Reais (USD
6.50) for each box of 40.8 kilos237. Along with setting this minimum price, the
government has approved low cost financing for the industry to be used to
increase product stocks.
This initiative gives even more privileges to big industries. No wonder that it is
perceived by small producers and their organizations as a guarantee for the
industry to have the raw material at a stable cost in order to justify investment in
stocks and play a stronger role and control prices in the export market.238
8.1.3
Coagrosol is located in the municipality of Itápolis, with 47.000 inhabitants in
the state of São Paulo where 30% of the Brazilian GDP is generated, from
industrial, commercial and agricultural activities. As a consequence, basic
transportation infrastructure is available and includes four lane highways that
connect the countryside to the city of São Paulo and from there to the port of
Santos. A group of agricultural and industrial technical schools, as well as one of
the most reputable public universities, are also located in this area.
The macro-region’s main economic activity is agribusiness with production of
orange, lemon, mango and guava. Three of the main global FCOJ companies are
there – Citrovita, Citrosuco and Cutrale which also buy directly from small
producers. Slowly there has been a move into sugar-cane plantations. The
establishment of a Syngenta plant (aimed at genetic modification for sugar-cane
plantations) has increased land cost in that region as well.
237
In August 2010 the price was $14.50 Reais in the State of Sao Paulo.
http://www.folhadoagronegocio.com.br/index.php?option=com_content&view=article&id=1288:p
rodutores-de-laranja-estao-insatisfeitos-com-preco-minimo-pago-pela-industria&catid=40:fruticultura&Itemid=71
238
186
“Coagrosol is in a region where the perception is that a cooperative is not
needed” (cooperative commercial director).239
This statement illustrates a situation where local producers are approached by the
largest players who try to buy directly at the farm gate, and define the product
price.
The main reasons producers would sell through the cooperative is the price
offered in relation to the street market and, to a lesser extent, loyalty associated
with the services provided.
In interviews with producers, they stated that they are individualistic. In many
cases, negotiations take place one by one, and although they admit that joining a
cooperative could bring them more benefits in terms of better prices and shared
fixed costs, they still refrain from working together. There were no references to
regional stereotypes associated to the Northeast or South of Brazil.
“The producer does not see the cooperative as something that belongs to him.
There is no vision that it is important to strengthen the organization”
(cooperative commercial director).240
“We complain a lot about everything, but in the end we do not do anything to
change it” (producer).241
The stereotype of the peasant and the businessman came up during the interviews
as a producer reported that around 1986, he decided to re-negotiate a price with
one of the big industries as he learned they had paid one of my neighbors more
for the same product. He told that when he arrived at their main office in Sao
Paulo, there were four men “wearing ties”. They asked him if he had his lawyer
with him. His answer was that he was “not afraid”, “even though he was a
peasant”.
239
“A Coagrosol é uma cooperativa em uma região onde há a percepção de que não se precisa de
cooperativa.”
240
“O produtor não vê a cooperativa como algo dele. Não há a visão de que se precisa fortalecer a
instituição.”
241
“A gente reclama de tudo, mas no final não faz nada para mudar.”
187
8.1.4 Collaboration Networks
Until 2008, Coagrosol relied on support from SEBRAE. At the moment, the
cooperative is not collaborating locally with any government agencies, but attend
the orange small producers’ network meetings promoted by FLO in Brazil.
8.1.5 Expected Challenges
In 2008, due to the global economic crisis, the cooperative faced a hard time as
production was already contracted and processed when international sales
contracts were put on hold. In parallel, the largest amount of working capital was
being financed on short term with local banks.
The cooperative ended up with large FCOJ stocks, held at high costs in a
refrigerated warehouse, being pressured for payment by producers, and the
urgent need for renegotiating the financed capital. To make things more
complex, international frozen orange juice prices dropped. Sales expected to
happen in October 2008 were only made effective in May/July 2009.
The working capital debt refinancing was completed in August 2010 with an
international micro-credit institution. At the time of the field visit, the number of
members had been reduced from 123 to 40.
The low number of members, low prices and high costs also had an impact on
the number of employees working for the cooperative, which had to be reviewed
and reduced into a small, multi-tasking team.
Right now, the main challenge for the cooperative is to search for more efficient
and less costly production and distribution options, and to regain a larger
member base. “The cost of inefficient logistics is no longer covered by the
minimum price” (cooperative commercial director).242
At the same time they have to manage the different viewpoints, especially among
long-time members on how to balance the original social mission with the
current extremely professional and market oriented approach.
242
“Custo de ineficiência logística não é mais coberta pelo preço mínimo.”
188
In parallel, some Fair Trade labeling organizations started certifying orange
producer groups which are larger plantations that depend on hired labor. This
impacts the cooperative’s competitive advantage of being one of the few in the
State of São Paulo, selling FT Frozen Orange Juice Concentrate.
The official explanation for granting the label to these larger plantations is that it
helps them provide better working conditions to employees. “It is hypocritical to
say a company must have the label to give better working conditions to their
employees” (cooperative commercial director).243 But in fact it helps increase the
amount of product supply when the small holder producer organizations are
facing problems which may compromise volumes.
8.2
Rivella AG and the product brand Michel
Rivella AG is the most traditional Swiss beverage company, very well known for
a soft drink made with whey, also under the same brand name. This makes it a
very special product which belongs in a category by itself, as there is no other
similar product made with whey.
Both product and brand are so much related to Switzerland, that for the
international markets, one of the strongest attributes is that it is Swiss made.
Their fruit juice brand, Michel, which has been in existence since 1929, was
acquired by Rivella AG in the 1980’s when they were looking for product
portfolio diversification. In 2005, as part of their social responsibility program
and to differentiate in the homogeneous market of fruit juices, they started the
process of inclusive and responsible trade, obtaining the Max Havelaar
certification and searching for Fair Trade orange producers through their trade
partner.
They looked into supplying more than a simple fruit juice (mehr al nur ein
Fruchtsaft). In the last 15 years, they have brought innovation to the product
portfolio in the line of functional food including Michel Fair Trade Body Guard
(with vitamins A, C and E ), Take it easy with herbal extracts which is for
243
“É hipócrita que a empresa tenha que ter selo para dar condições de trabalho para os
funcionários.”
189
relaxing, Beauty Colada with Aloe Vera and Biotin, the low-calorie Michel
Cranberry and Michel Fair Trade Orange Juice without sugar.
Rivella/Michel’s Fair Trade products, certified by Max Havelaar Switzerland
started to be commercialized in 2007.
The product’s selling proposition is to offer more value to the final consumer and
is represented by the tagline every sip does good244 which has a double meaning:
it does good because it is fresh, natural and provides vitamins for good health
and it is also a way to support small producers to go ahead with their socioeconomic self-sustainability.
Michel does joint information campaigns with Max Havelaar in Switzerland, and
with their customers – schools, company restaurants, and bars. The main
objective is to show what and who is behind the Fair Trade label. At the end of
2010 they started putting together a campaign in which they show producers in
their own environment making statements about what Fair Trade meant for them
and what made them happy about it.
“We wanted to show the final consumer that it is not only the money that gets to
these communities. That there are people behind it, and that they are happy
about the simple things of life, which we already have in Switzerland but many
times take for granted” (Michel product manager).
The Michel brand is sold only in Switzerland due to the market set-up with
private brands and other competitors with the same kind of product quality,
Michel does not apply/get a final price premium for the Fair Trade product
brand. Therefore in order to carry out their commitment to responsible
outsourcing of raw materials, they absorb the higher cost of FT products and do
not transfer them to final customer.
According to the company, the process of finding the necessary volume with the
right quality from small producers involved a lot of work. Product outsourcing is
done through the trading company Fruitag.
244
Denn jeder Schluck tut Gutes. Translated from German by the author.
190
8.2.1 The trading company Fruitag
Michel’s commercial contact with producers takes place through the FLO
certified trading company Fruitag. Based in Switzerland and with a cold store
and laboratory in the Netherlands, they trade, blend and sell about 20 to 25% of
their products to the Swiss market and another 80% to Europe. The 70 products
portfolio includes organic, fair trade orange concentrate and conventional, apple
concentrate, apple juice concentrates, tomato paste, tomato juice, and other fruit
concentrates.
Their main consumer markets are Germany, Spain, France, England, Denmark
and Switzerland. Products’ sourcing is done mainly in Latin America for
oranges, and South Africa, Ghana, Hungary and China for apple concentrate,
apple juice concentrate, tomato paste and tomato juice. In the case of Brazil they
buy from four different cooperatives.
Fruitag’s sales proposition is to provide peace of mind to their customers by
taking care of all the issues related to product sourcing, delays, logistics, and to
provide them with a homogenous product in terms of quality, all over the year.
The managing director has been involved in the business of fruit juice
concentrates for the last twenty years and seems to have an average intercultural
awareness, at least from his perspective.
One example is his comment about the importance of knowing the holiday
calendars of the countries where they do business. According to him, every
culture has its own celebrations and holidays and one must be aware of them. So
for Brazil it is Carnival; in China there is the New Year.
“This is their country, their culture, they should enjoy it. Don’t give them only
Easter or everything will be standard and boring” (Swiss trader).
Rather than a simple trading company, Fruitag considers themselves as the
bridge between final mainstream industries customers who demand high quality
products at a constant volume of delivery, and the small producer organizations.
191
“Fruitag is like a catalysator [sic] between these cultures and we are trying to
understand these cultures and we are trying to cope with those cultures” (Swiss
trader).
8.2.2 Pre-assessment – Michel’s communicated fair trade messages to
consumers
In their communications, Michel tries to break free from the stereotypes of the
peasant /marginalized producer in the Third World or developing countries.
Instead, they show their engagement with South American producers.
On their website they report that through Fair Trade they are committed to
improving the living and work conditions of producers in South America.245
In 2011 Michel developed a marketing campaign which the main theme was:
What makes me happy about it (Fair Trade)?246
In a subtle and indirect way they have added elements of cultural relativism by
including statements of what those producers valued the most, from their own
perspective and local socio-economic context.
They wanted to show consumers the people (producers) behind the product,
including the information on what these producers can do with the extra income,
be it higher education for their children or investing in better health care.
By doing so they intended to build a representation, as close as possible to their
local reality, of those who produce the oranges the consumer is about to drink.
To show final consumers that: “these are people who carefully raise the fruit and
monitor product quality” (Rivella/Michel).
It is also a way to reduce the distance between consumer and producer, even if at
first there is only a one-way direction.
Producers were portrayed in their daily life and as they are. Their looks are
natural. This runs against frequent depictions of the marginalized.
245
Michel engagiert sich so fuer soziale Lebens-und-Arbeitsbedingungen der Produzenten in
Suedamerika. www.rivella.com/ch accessed on the March 22, 2011.
246
Was macht mich gluecklich darueber?
192
According to Michel’s product manager, the interviews and photo shootings
were relaxed in tone but committed to the cause. They hired a photographer who
was a Swiss-Brazilian, as he spoke the language and had a cultural-link to the
country. After a briefing, he was sent to freely look for people.
Figure 19: Michel campaign about Fair Trade and the producers behind the
product. Credit: Michel/Rivella247
Only the first names are shown to bring proximity, followed by the information
that they are producers from Brazil. Although there was a map, in qualitative
checks with the Swiss, they did not associate it geographically to the country.
But Rivella/Michel main point was to focus on the people that make a country
and grow the product rather than the country itself.
Michel also works jointly with the Swiss FLO member Max Havelaar with
customers in order to increase awareness about Fair Trade.
247
Campaign Images provided by Rivella/Michel. Also available at the web address
http://www.rivella.com/ch/engagements/fairtrade.html accessed on April 5, 2011.
193
8.3
Brazil in the view of the Swiss Partners
A positive element of Brazil is the sunny weather, people’s happiness and
satisfaction, life energy (Rivella/Michel). “An overall perception of Southern/
Latin America laissez-faire. Let’s see tomorrow” (Swiss Trader).
A comparison between Brazil and other countries also came up during the
interview with the Swiss trader: “With Brazilians, in general, you need more
time. You cannot just send an email and then, bingo, you get an answer. It takes
more time. The Chinese are different. With Chinese we have very fast responses.
But this we know and we cope with this.”
Along this case study, the trader’s statements come from his overall experience
with several Brazilian small producer organizations, including Coagrosol.
Switzerland in the view of the Brazilian Cooperative
The perceived image of Switzerland was described at two different times by the
cooperative’s commercial director, before and after he traveled there on business.
Before, the image associated with Switzerland was: Small country, cheese and
milk producers, organized, banking and wealth management.
Afterward, the strongest image elements include: concentrated retailing with two
main players; the stainless steel waste bins (as a sign of a rich country that can
afford public waste bins made of an expensive material); the high per capita
consumption of organic and fair-trade products; waste bags which need to be
bought at the supermarket (which was a sign of a campaign to help reduce the
amount of waste and the recycling option); the public transportation system and
the fact they trust individuals will buy their tickets alone and validate them when
used.
194
8.4
For this part of the case study, the questions which lead to the differences
between the two countries in terms of ways of doing business, were applied to
the trading company (as Michel does not do the product sourcing directly, but
through a trusted third party) and the cooperative’s commercial director, as he is
the one responsible for the international contracts.
Besides questions about valuing and evaluating the way of doing business
between Brazilians and Swiss, the cooperative director mentioned a specific
element about the Swiss way of doing business which is related to the Max
Havelaar approach to the market. He sees it as too progressive and not aligned
with the original objectives of the Fair Trade movement, as Max Havelaar would
support including large companies among those authorized to use the Fair Trade
label.
There was also an observation about the Swiss trading partner, comparing him to
the traditional traders and previous experiences he had with them. For Coagrosol,
Fruitag’s managing director has higher social awareness as he had been attending
FLO meetings about minimum price review or on how to guarantee a larger
product supply, and sometimes would accept paying a price higher than the predefined minimum price. “He is a trader with a certain social consciousness.”
For the reported miscommunications or differences in the way of doing business,
the elements that were culture-based consist of future orientation, time
management; and flexibility. Trustworthiness was also included, as a self-image
of the Swiss partner, who valued it positively in his case.
The commercial linked ones included concern for product quality and
trustworthiness, also from the perspective of the buyer and in the sense of never
signing a contract for longer than one year, which has more of an economic than
cultural elements of trust in it. They are summarized in Figure 20.
During this case study, there was some specificity in relation to the other two
cases. Out of the three case studies which are part of this research, this was the
only one in which the Swiss contact did a self-evaluation, even if only with
195
positive points, on what they do better. Therefore this could have been a polite
way to mention the negative commercial behavior from the other.
The cooperative commercial director could not recall any specific cultural way
of doing business which would be the same (equal) in the case of Switzerland
and Brazil. This might mean that every other commercial behavior, outside the
ones he mentioned, is the same for both actors, in Switzerland or in Brazil, at
least in his region, and type of traded product, due to the extreme vertical
distribution chain and the (higher than average for Fair Trade) number of
intermediaries.
196
during the interviews for Case Study C
Cooperative
valuing
Trader
Cooperative
self-valuation
Time
Management
No statements
were made
No statements
were made
Flexibility
No statements
were made
Trust
No statements
were made
(+) “To deal
with adverse
situations.”248
(-) “In Brazil
things change
every day.”249
No statements
were made
Future
Orientation
(+) “They know
how to plan
and are able to
follow
what
has
been
planned,
but
they have the
conditions to
do so.”250
No statements
were made
Concern for
product
quality
(non-cultural
element)
248
Trader
valuing
cooperatives
(generic for
BRA)
(-) “Sometimes
the
communication
is less efficient
than we are
used to.”(in the
sense of
response time)
No statements
were made
(-) (contracts)
“Never longer
than one year.”
No statements
were made
(-) “Long term
contracts, this
is not working
with them.”
No statements
were made
(=)
“Knowledge
about quality.”
Trader selfvaluation
(generic for
the Swiss)
No statements
were made
No statements
were made
(+)
“Reliable.”
(+)
“Trustful.”
No statements
were made
No statements
were made
“Lidar com situações adversas.”
“No Brasil tudo muda todos os dias.”
250
“Sabem planejar e de seguir o planejamento, mas eles têm condições para isso.”
249
197
8.4.1
Time Management
For the Swiss trader, there is a difference in reaction time in answering or
replying, but this is not a major issue as everyone is reachable via mobile phone.
Nevertheless, he states that: If you do business with Brazil, it does not go as fast
as in Europe. It can’t. Because they need more time to clarify things (Swiss
Trader). This links not only to the cooperatives collectivist decision making
processes, but also to the sort of business and the fact the traded product is a
commodity exposed to fluctuating international price, US dollar variations and
last minute country trade embargos.
In relation to the Brazilian commercial counterpart, the Swiss trader believes the
time management is according to his expectations: “Coagrosol is ok. They are
pretty fast. Two to three days. We have a contract and the fruit is coming and
this is functioning. This is functioning.”
The cooperative commercial director mentioned that the Swiss are good at
planning and sticking to agreements. This observation was complemented by
saying that this is possible because they have the institutional means to do so.
The same perception was pointed out by the trader. For him, one of the main
differences is that in Switzerland people can count on a “decent” infra-structure,
and the financial systems are in place, in this sense they can be more effective
than the organizations working in places with bad infrastructure and low
governmental support. “We have the advantage here in Europe and in
Switzerland that we have a good system. We can restore power in half an hour.
We have very efficient systems. This is our big advantage and this is the
Brazilian disadvantage” (Swiss trader).
This shows that for both sides of this commercial relationship, the different ways
of managing time have more to do with infrastructure than to a cultural behavior.
198
8.4.2
Future Orientation
There is an economic, rather than a cultural reason, for the fact the Swiss trader
says he never signs contracts for longer than one year, and this is the product
price fluctuation in the international market. During interviews with producers,
they also mentioned the same reason on why they prefer the short term contracts.
A vision toward planning for the future is very strong for Coagrosol, which may
be because the president is a second generation Japanese in Brazil, and he brings
this concern about the connection between current actions and future ones. He is
proud to say he has been growing organic oranges for fourteen years now and
considers that this is a legacy he is leaving to his grandchildren. For him the FLO
certification is a way of forcing producers to reconsider and review the way they
operate their plantations and for the cooperative to develop a longer term
strategic plan.
To be part of Fair Trade producers have be prepared, take notes; make
improvements (Cooperative President).251
8.4.3
Trustworthiness
While reporting a story about a product which Fruitag has been trying to develop
in Brazil for the last three years, the stereotype of Brazilian behavior that they
“never say no” was mentioned.
Once the local people say something is possible, the Swiss counterpart will
expect that there will be positive outcomes in the short term. In reality, there will
not be a clear definition of data on which people can rely to take a decision about
whether the project will move forward or not; whether the outcome will be
positive or negative. Thus, this not being able to say no may extend open topics
into eternity.
“In Europe when something new is proposed, it is evaluated immediately; they
say ‘sorry this is not possible’ due to this and this reason, and finito. In Brazil
251
“Para estar inserido no Comercio Justo tem que se preparar, anotar, fazer melhorias.”
199
they say, yes we can do it and then they realize this is not possible. But this is the
culture and you have to cope with this” (Swiss Trader).
There were several statements about the need to develop a trusting relationship,
since this is the main credo of Fair Trade and one of the strongest elements of the
Swiss self-image.
“The Swiss are trustworthy. This means sticking to your word. In every way,
such as shipping raw materials, paying on time and shipping quality. We stick to
our word” (Swiss Trader).
In terms of trusting the fellow partners in Brazil, all starts with good intentions
but they may need to be checked up from time to time.
“We do trust our Brazilian suppliers but I tell them from the beginning ‘your
product is being checked from time to time’” (Swiss Trader).
8.5
Conclusions
The orange juice business is highly concentrated along the entire supply chain.
There are a few companies that consolidate product offer at the source and
dictate the final price paid to producers at the farm gate. They can even influence
the international commodity price, as Brazil supplies 82% of the total exports of
FCOJ (Frozen Concentrate Orange Juice) to Europe.
In the market interface there is generally a set of private labels plus two or three
company brands, especially in Switzerland where the retail market is mostly in
the hands of two chains.
The above business specificity, together with the defined minimum price and the
perceived risk (by producers’ organizations) that FLO position towards granting
their certification label to larger plantations (for the benefit of their direct
employees) seems to have a greater influence in the development of commercial
relations between small producer organizations and their respective buyers than
the cultural aspects per se. In this sense, the Fair Trade Organization should help
guarantee that the market relationship will be maintained, giving priority to small
producer cooperatives.
200
During interviews with the main commercial partners, there were not many
declared perceived differences in the way of doing business, which may be
because the cooperative exports to different countries and that the main interface
in Switzerland is a trader who is more used to buying from Fair Trade producers.
Another reason may be that because of the nature of the business, these producer
organizations tend to be more used to dealing with other industries for
processing, exporting and trading, as well as the different cultural expectations.
A strong element which was constantly raised by the trader was trust, mainly as a
Swiss cultural element. In his case this can be explained by the fact that, when
dealing with smaller companies with different institutional protection against
risk, trust is all one can rely on.
Country stereotypes were also already embedded in the unconscious mind,
except for the fact that buyers did not believe carnival would influence response
or delivery time and that suppliers did not mention watches as a reference for
Switzerland.
For the Fair Trade constructs, the communication campaign developed by
Michel is a good example of companies facing the final consumer, starting to
break the stereotypes related to peasant producers, in a kind of wake up call for
what it is that they value as important.
Besides the fact that Fair Trade is part of Rivella’s inclusive trade initiative and
product differentiation, this more realistic view about the daily life of producers,
as being small entrepreneurs rather than the poor and marginalized from a global
economy, comes from Michel’s product manager own experience with
smallholder mandarin producers in Italy, and the understanding of their passion
for the business and the daily struggle to survive.
201
9.
Cross Case-Study Analysis
The most striking element that prompted in these three cases was that,
independently from the distance from producer to consumer, or regionalism, or
type of product and business model, none of the Swiss partners have perceived
anything as better in the way of doing business of the Brazilian counterparts in
relation to their own.
This is complemented by the fact that in all cases, the Brazilian partners did a
mea culpa or self evaluation in relation to procedures and behaviors that should
be improved in their management style to reach the level of their Swiss partners.
Overall, it is no wonder that the Swiss buyers did not mention anything that the
producer organizations do better than themselves, and that producers are striving
to adapt to a system which is different from their daily local business. This is the
reflection of the post-colonial and Fair Trade image constructs, in which
marginalized producers and their organizations are pictured as those who need
help to learn how to behave according to the criteria of fairness and ways of
doing business as defined by the certification agency from a predominately
Eurocentric perspective.
The outcomes of this cross case analysis, which follows below, provided the
elements for writing conclusions and recommendations.
9.1
The cross-cultural contact zone in different distribution channels
The cases are embedded in three absolutely different distribution chains, as
shown in Table 1 at the end of this chapter. In cases A and B there was a shorter
line from producer to consumer. Case C has got the longest distribution chain
due to the several industry intermediaries – from the fruit processing in Brazil
and the quality control at the port in Europe, to customer site final product
blending and bottling.
202
Case B is a single company with an ongoing job exchange program between
employees of the different cultures moving into each other’s contexts.
In case A intercultural contact is high, but in a more disperse set of encounters.
This case is representative for the study as it involves the “typical” expected
profiles on each side of the Fair Trade value chain. On the one side there are the
producers located in a far-off semi-arid region with several logistical difficulties,
including access to water, and who make a living of their agricultural activity.
On the other side there is a world-shop with a large product portfolio and that
buys directly from small producer organizations. Even though buying directly
from small producers involves extra work, they try to keep the distribution chain
as short as possible.
The shorter the distribution chain, the closer and higher the contact zone between
small producers and buyer. In case A the strong differences in responsiveness,
communication style and time management seem to be wearing out the
commercial relationship. In case B even though the level and frequency of the
intercultural contact is high, the colliding values seem to result in a hybrid model
where each side tries to understand and find spaces to adapt to the other. In case
C, due to the more professionalized structure of the frozen orange juice business,
expectations on product quality and delivery time are more aligned, at least in the
case of suppliers from São Paulo State, where the big three FCOJ players are
based.
9.2
Communication Patterns, Time Management and Collectivism
As for communication patterns, in cases A and B the Swiss directness and
assertiveness give Brazilians the impression that they are cold, direct and that
they have something against the Brazilian commercial partner (in case A), in
opposition to the expected friendly and personal relations.
Swiss Buyers
Individualistic Professional/Cold
Direct
Messaging
Neutral
Perceived
as
203
In case A, when the buyer informed the cooperative about an issue related to
product delivery, they expected feedback as a sign of trust. For the cooperative,
on the other hand, not doubting the word of the buyer would show they believed
what they have been informed. At the same time, there was also an element of
shyness. Both sides’ expectations that the other would be the first to formulate
the first question or excuse, ended up in lack of communication.
This correlates with the Brazilian communication pattern of not asking back,
especially to Europeans or Americans. This behavior has its origins in the
foreigner in the Brazilian imaginary (Caldas, 1997) and the relations of
subordination to outsiders, with traces of the socially embedded hierarchical
structures or, to a certain extent, to the relationship power structure level or even
to the peasant-businessman stereotype. The result is that the producer feels
diminished in the trade relationship.
The local strong hierarchic structures identified in cases A and B may restrain
them from asking a second time when some message was not completely
understood.
The producer organization’s emotional and collectivist nature, in the view of the
individualistic, neutral and future-oriented Swiss behavior, leads to the
perception of the first being disorganized, lacking control and a strategic vision,
resulting in low assertiveness.
In two out of the three producer organizations visited as part of this study, cases
A and B, as well as during the participant observation during a workshop to
define the guidelines for the promotion of family farming in Brazil, collective
decision making was applied whenever key topics needed to be discussed and
decided on.
In such collectivist groups, in the end no single individual dares to assume
responsibility for a decision, even if it would reflect the opinion of the largest
amount of people, and the entire process has an impact on response time.
One main reason behind this approach is that it provides space for face-saving.
Once the decision is jointly taken, by giving a voice to every single person or
organization, there is no individual to blame if anything goes wrong.
204
Brazilian Producers
Collectivist Indirect Messaging / Emotional/ Collectivist Decision Making
Late response time Perceived as Unprofessional
In case B no critical time management issues were reported. Nevertheless there
was a new element, future orientation, and ability to plan and to follow what has
been planned. This can be due to the local company hybrid culture.
Also in case B, probably due to the fact that the intercultural contact is more
frequent, the company employees, both Swiss and Brazilians, have realized a
common behavior which leads to frustration and to the perception that promises
are not being delivered.
This is based on the fact that on the one side the Brazilians tend to estimate a
situation and jump into conclusions, even when not having enough information
on the affirmative answer feasibility. The Swiss, on the other side, will likely
take what has been informed as a closed deal, but in fact it was just an estimate.
This sort of situation directly relates to lack of assertiveness and to the when yes
means no stereotype for the Brazilians, while the Swiss sticking to the word
confirms their hetero and self image of being reliable and trustworthy.
In case C the regional culture tends to be more individualistic. Although this
turns decision-making faster, it has a negative impact on people’s active link to
different organizations. The cooperative must constantly communicate with its
members to show the benefits of belonging to a like-minded organization. This
also shows the regional differences in Brazil. In case A (producers and
cooperatives based in the north-east) and case B (producers in the south of
Brazil), these two seemed to be extremely collectivist.
In case C as well, both seller and buyer agree that if producers in Brazil had the
same infrastructure, economic stability and institutional guarantees as in
Switzerland, they would also be able to plan longer term and to have a faster
response.
From the perspective of a foreign language as a main source of
misunderstandings, there were several reported situations in cases A and B.
205
Along my participant observation, during meetings and email exchanges between
Brazilian producers from different geographic locations and products, all part of
a organization formed to promote family farming, I could experience several
situations where the collective process slowed down opportunities for market
expansion or into setting different partnerships. The first one was when a group
in the North was setting a sales agreement with one of the largest Brazilian
cosmetic companies for the supply of exotic fruits and seeds.
This producer group intended to propose that the cosmetic company include the
family farming organization label on products made with their exotic seeds. The
idea was shared within the group. After many exchanged emails, the conclusion
was against allowing the company to use the label since they were not sure about
its corporate reputation.
The second situation was when a cooperative had to decide between developing
a new industry partner, who would represent lower production costs, or continue
with the same one, who was in a comfortable position and charging them 15%
more than the average cost for the industrial process. The cooperative director
could not decide this alone.
He had to call all 100 members for a meeting to jointly decide based on pros
(lower cost) or cons (the long term relationship which they were afraid to break).
In the end the decision was to give preference to the one with whom they already
had a long term relationship. In this case, it looks like relationships counted more
than higher income.
In terms of time management, most producer organizations have small working
teams; their board of directors is formed by producer members. Except in the
case of cooperatives that have grown into thousands of members, it is difficult to
find a coordination structure where each person is responsible for one single
activity.
The reality is that they have lean structures and each person does several things
at the same time. The main resource they can rely on is their own time and
availability. Their multi-task profile directly impacts the way time is managed.
206
Besides the cultural elements, there is also an economic one that has to do with
the Brazilian infrastructure and the small producer organizations amount of
exported items. As stated by one of the buyers who lived in Brazil for several
years, the total of commercialized Fair Trade products was small compared to
agribusiness commodity exports.
It would be naive to believe that a small producer organization could get their
goods to the port and immediately ship them. There is a whole process to be
followed and the larger shipments take precedence. This influences delivery
time.
9.3
Constructs of Fair Trade
In the three cases, the messages communicated about the benefited communities
and producers have undergone some changes in tone of voice and content,
starting to break free from the original stereotyped image of the peasant and their
developing countries in the South/Third World.
In case A, the ATO published a Fair Trade dictionary on its website where they
explain why they are moving away from the Third World message.
In case B they mention the “economically disadvantaged” countries and
regions, which is a better message than Third World or the Global South, as it
focuses on economic, rather than social or cultural disadvantages. Their
perception about producers is that these are business people who like to try to get
a better deal, in a very entrepreneurial way.
In case C, the partner facing the market launched an advertising campaign to
raise awareness about Fair Trade and responsible supply chains. In it, producers
are shown in their natural environment, and statements on what they value in
Fair Trade are brought up.
There is, though, another hetero-image which is that of the peasant versus the
business person. This one was present in interviews with producers. They have
the self-image of peasants and this was not put in a negative or pejorative way.
One of the elements they pointed out was the need to keep the family farming
207
culture and tradition alive, and this is something they perceive as being provided
by the Fair Trade movement.
9.4
Country Hetero-Image
The first group of prompted image associations about Switzerland in the mind of
Brazilians: rich people; wealth management and banks; small country; cheese
and milk producer; waste management system; efficient public transportation.
Another group of image associations related to the Swiss way of doing business
includes: to be reliable and trustworthy people; preference for separating private
from professional lives; several rules that lead to a certain bureaucracy and to
less flexibility; know how to plan and to stick to what has been planned;
extremely time oriented in the sense there is a time for everything; concentrated
retail chains; high consumption of organic and fair products.
In the case of the prompted image associations about Brazil by the Swiss, these
included: Carnival, Brazil as not a country of Fair Trade (the large plantations
image), sugar, and cars running on ethanol, dark people, Latinos, Southern
laissez-faire, leave things for tomorrow, sunny weather, happiness and life
energy.
Related to the way do business, there were comparisons to Africa and to China.
In the first case producers were compared as behaving the same way, and in the
second one, the Chinese were mentioned as being more effective.
Overall Brazilians hold a positive image of the Swiss, including perceptions of
what to expect when doing business with them. The Swiss also hold a positive
image of Brazil, but in a different way which is much more related to happiness
and enjoying life than to professional capabilities.
Although there was no colonial or imperial relationship between Switzerland and
Brazil, in the end, the country’s hetero image still contains elements of colonial
constructs and is in a process of redefinition.
208
9.5
Regionalism
Except for the case of Sao Paulo State, the groups based in the South (Case B)
and in the Northeast (Case A) seem to have an urgent need to define their own
regional self-image. Differentiation takes place by keeping local traditions. In the
case of the South, the Farroupilha; while in the Northeast there is the Cordel
Theater, both mentioned in the cases studied.
The North-South divide seems to be stronger between regions in Brazil than in
relation to this country and Switzerland. In Case B several producer members
have portrayed their fellow countrymen as ‘lazy’, ‘party-goers’, not willing to
work hard to achieve things’ and ‘living on the expenses of those who work in
the South’.
In Case A, cooperative members reported their efforts to break free from the
internal stereotypes of the nordestinos being viewed as a drain to the public
resources’, and as the ‘poor ones’ that need support.
In both cases this represents an attempt to keep their regional identity. In Case A,
through a process of defining a new self-image, detached from past prejudices;
and in Case B in the way they stereotyped the other.
This is an attempt to break with the negative image associations of Brazil, as
individuals do not see themselves as the stereotypes dictate. That is why there
they grasp onto regional cultural specificities in order to say ‘I’m not the kind of
Brazilian they are talking about, I am different.’
In Case C, regionalism came up in the form of the country-side naïve peasant
and city businessman stereotype.
9.6
Not all mismatches are based on image and culture
Besides the intercultural and image related sources of conflict and
misunderstandings in the trade relationship, there are also economic and even
environmental elements which cannot be left aside. These include access to
infrastructure, variations between the international trade currency, the dollar,
versus the local one, internal versus external market demand and product
availability in each season due to a high or low previous raining season.
209
Historically there have been many deep downs and not so many highs in
agricultural commodities and food prices. Several producers, independently of
their size, were financially broken due to wrong guesses about the type of
product to be grown or the definition of future contract prices.
In parallel, the international price of these products is set in US dollars and
production costs are in the local currency and there is free floating exchange rate.
One producer in case C has mentioned, in the 1990s when the US Dollar was
overvalued in relation to the Real, the best commercial approach was set longer
term contracts. At the time of the interview, they were in the opposite situation,
in which the local currency was over-valued; therefore producers who had set a
longer-term contract with international buyers are now having much lower
revenues than those selling to the internal market.
Two elements often mentioned were the concern about product quality, and that
the agricultural activity is very dependent on weather conditions, and this is not a
controllable especially for those growing organically.
In all three cases, the Fair Trade praised element of trust was highly influence by
economic times and infrastructure availability. In case A, the delays on product
delivery and the dispatched merchandise not in line with pre-defined quality
standards, have negatively influence their reliability towards the buyer.
As stated by Freidberg (2003), to trust is the only option left to those who
operate in a trade situation with different cultures and dissimilar levels of
information access and institutional protection against risk.
It is nonsense to expect one could sign a contract for longer than one year and
this is not based on a cultural but rather on the economic side of trust.
210
Table 1: Cases’ Institutional Set-Up, Producers’ Local Context and Self-Image,
and Constructs of Fair Trade.
Case Study A
Institutional Profile
Years of commercial
relationship
Product Type
Social label
Distribution Chain
Bridging Actor
Producers’ Local
Context
Producers selfimage
Membership to
associations
Constructs of Fair
Trade
North-South
Construct
‘Marginalized’
Producers
Connection
Producer/Consumer
& Transparency
Case Study B
CooperCaju
Claro FT
Gebana
BRA
20 years
Cashew-Nuts
time)
FLO label.
(longer
life-
ATO
reputation
and
standards.
Applies FLO
label
for
exports.
Producers Cooperative Distributor & Retailer Final
Consumer
Swiss-French
in the
70’s/90’s
SwissGerman
Consultant
based in Sao
Paulo
Swiss-French
Trainee in
2011
Producers in the Northeast of
Brazil (Rio Grande do Norte
State)
Strong regionalism – looking
for the traditions.
Aiming at changing their
internal (endo) image.
High
Case Study C
Gebana CH
Soybeans (longer life-time)
Orange Juice Concentrate
(shorter life-time)
FLO/Max
FLO/Max
Havelaar
Havelaar
label.
label.
ATO
reputation
standards. Applies
label for exports.
and
FLO
Producers
Partner
Cooperative & Distributor
EU food industry Final
Consumer
At the beginning, a SwissGerman who had just
moved to Brazil.
Producers Cooperative Trader/Importer Beverage
Industry Retailer Final
Consumer
At the beginning, Brazilian
researcher with a mandate
from FLO to the local Federal
University.
Producers in the South of
Brazil (Parana State)
Producers in the Southwest of
Brazil (Sao Paulo State)
Strong regionalism, keeping
traditions.
Producers’ self image of
being simple people and a
bit goofy.
Regional self-image of
being harder workers, better
educated and higher socioeconomic control.
Prejudice in relation to the
North and North-East BRA.
High
The businessman and the
peasant self-stereotype.
Gebana
Developing countries in the
South.
Economically
disadvantaged countries
and regions.
A businessman who likes
to speculate/negotiate.
Product
price
(for
soybeans) not available
online. Annual Report
not available (on request
only).
Clear reference to
producers’ organization.
Product price available
online. All Annual
Reports& Financial
Reports.
Michel/Fruitag
4 years
Claro FT
Trade Partners.
Coagrosol
9 years
Low
Michel
South America.
Producers are portrayed in
their daily situations.
Association to producers in
product communication.
211
Table 2: Perceived differences in the way of doing business’ Generic Image of the
Other (Country).
Case Study A
Case Study B
Case Study C
Perceived differences in
the way of doing
business
CooperCaju
about Claro
Claro about
CooperCaju
Gebana
Brazil about
Switzerland
Gebana
Switzerland
about Brazil
Coagrosol about
Fruitag
Fruitag about
BRA suppliers
(including
Coagrosol)
TrustworthinessKeeping
the Promises
Keep the
promises /
reliable
When yes
means no.
Low
flexibility
When yes
means no.
Low flexibility
When yes
means no.
Payments
are done on
time.
No time
orientation.
Time Management
They always
have an excuse.
Do not take
contracts
seriously
They can
plan and
stick to the
plan.
Not
planning.
Not being
able to set
joint
priorities.
Communication
is less efficient.
They know how
to plan and are
able to follow
what has been
planned.
They need
more time to
clarify things.
No issues
pointed out
No issues
pointed out
Low vision
into the
future.
Low/No
Communication.
Focus on
shorter term
contracts and
smaller
volumes.
Communication Pattern
Direct and
dry
(perceived
as
aggressive)
Language Issues
Yes. Communication in a mix
of Portuguese/Spanish/Italian
and English.
Yes. Communication in
Portuguese.
No. Communication in English.
Country Generic Image
Swiss
HeteroImage
Brazilian
Hetero-Image
Swiss
HeteroImage
Brazilian
HeteroImage
Swiss HeteroImage
Brazilian
Hetero-Image
Brazil / Switzerland
Reliable and
Trustworthy.
Comparison to
Africa.
There is a
time for
everything.
Sugar, car
with alcohol,
dark people,
the image of
Bahia.
Small/Organized
country. Cheese
and milk
producer;
Banking;
Sunny weather.
People’s
happiness and
satisfaction.
Life energy.
The MST
social
movement
Wealth
management
Overall
perception of
Southern
laissez-faire.
Let’s see
tomorrow.
Carnival.
Brazil as not a
FT country.
Objective,
direct and
dry.
Clear
separation
professional
/private life.
Bureaucratic
Several
rules.
Rich people
(producers’
perception).
Good at
speaking
(oral
people).
Brazilians
are very
Latinos.
Comparisons
to China.
Concentrated
retailing;
organic and FT
products high
consumption.
Comparison to
Chinese faster
response.
212
Part IV – Implications and Final Considerations
10. Implications for Practitioners
10.1 Awareness about the stereotyped Fair Trade messages
Although some companies have started to change the Fair Trade messages to final
consumers, the stereotypes still persist.
To support promoting the change, awareness about the Fair Trade constructs, incompany ethical products positioning realignment, and a consistent and long term
marketing strategy is recommended.
As the critics about the current labeling organizations increase, to be able to
sustain company’s responsible initiatives of buying from small producers’
organizations, the focus should be on inclusive business for both procurement and
product’s positioning.
This inside-out approach will better support corporate reputation and customer
preference, than the simple appliance of a label. It is an image insurance which
guarantees that whatever crisis and pressure from public opinion over the
certifying agency; this will not directly impact consumers’ trust in the company
and its products.
In line with this approach of allowing other processes that guarantee inclusive
trade, during one of the interviews, a Swiss buyer who had lived for a long time in
different producers’ countries, and who had a good intercultural awareness stated
that: “the difference between conventional and fair trade can be huge, but the
difference between well done trade [in the sense of better distributing value along
the chain] and fair trade is not so large”.
213
10.2 For the intercultural different ways of doing business: The Bridging
Actor
The bridging actor can be either a single person or an institution/organization.
They are the ones that weave the net and set the vertical social connections through
their capabilities and means to reach out unlike people in dissimilar situations,
such as those who are entirely outside the community (Erlington & Hartigan,
2008; Scott, 2004; Knudsen, Florida and Rousseau, 2000).
Once they have a better understanding about the cultural patterns and socioeconomic situations of both sides, they can play the role of a mediator or
facilitator.
Based on previous visits to small producers’ cooperatives to the Northeast of
Brazil (Serra do Mel, in January 2009), to Peru (Tarapoto in April 2009 and
Chanchamayo in August 2009), Parana (December 2010) and State of Sao Paulo
(August 2011), in all cases there was a person or a group of people – these
bridging actors – who have supported cooperatives in accessing international
buyers; they also felt responsible for the success of these commercial
relationships, and often played the role of moderator in situations of
misunderstandings.
One example of bridging actors is what the Shell Foundation calls ethical agents.
In a joint project with M&S retail chain, to implement an inclusive outsourcing
initiative for buying organic and fair trade cotton from producers in Africa252, Shell
Foundation developed a fairer intermediary organization.
This organization intermediates the relations between small horticultural and
agricultural producers from southern and eastern Africa and large retailers. The
reported reason for having these organizations is that the large retailers are used to
counting on support from experienced professionals along the supply chain, and
252
http://www.shellfoundation.org accessed on Dec. 30, 2010
214
that it is practically impossible to coordinate the work among hundreds of retailers
and thousands of producers.253
These ethical agents not only facilitate the relationship, but they also work on
building-up local capabilities, especially in the case of guaranteeing the expected
product quality and quantity in line with buyers’ demands.
In all three cases which were part of this study there were bridging agents. In case
A it was a French-Swiss who promoted the first network connections to sell to
Switzerland and that facilitated the process of creating the legal entity in Rio
Grande do Norte that could export the product as well as the partnership with an
organization for the logistics. In 2010/2011, as the relationship was facing some
issues, both sides have also searched for people to facilitate and moderate a
definition of a business plan. From the cooperative side they hired a trainee who is
a Swiss-French who had lived in Brazil for one year. From the buyer’s side, they
temporarily hired a Swiss-German who has lived in Brazil for at least ten years, to
be their local interface.
In case B the company established in Brazil is the bridge between producer and
consumer.
In case C, it was a Brazilian professor who got a mandate from one of the FLO
members to search for small producer cooperatives that could become FT certified
and start selling their products to Europe.
253
We don’t have the resources to do it with tens of hundreds of retailers and thousands of suppliers. If
you want to go to scale, we believe you need an intermediary. (Kurt Hoffmann, Shell Foundation
Director, in an interview to the Retail Week magazine published on July 11, 2008).
215
11. Implications for the Labeling Organization
11.1 FLO System – better to lose the saddle than the horse?
The market-driven orientation of the FLO system, reflected in their New Standards
Framework (NSF) which allows for adaptations in response to growing pressure
for certified products from large industries, will put this socio-economic
movement under fire.
In this chapter I mention some examples of adaptations that have taken place in the
FLO system in order to meet buyers’ and end consumers’ expectations.
Over the years, the consistent market communication strategy for building
awareness, based on the carefully selected image attributes and Fair Trade
constructs mentioned in this dissertation, has turned the FLO label into a top of
mind brand. The study developed by Hainmueller, Hiscox and Sequeira (2011)
shows that applying the FLO label to a coffee package increases its sales by 10%.
Not only did sales grow, reaching the mark of € 4.36 billion worldwide in 2010254,
but income from the trademark license use on retail products also increased.
This mainstreaming orientation might have a different reason than just increasing
market potential for small producer organizations.
Behind granting the Fair Trade International label, there are two sources of
income. The first is the entrance, auditing and annual maintenance fees which
apply to every single player in the distribution chain – producer groups (fees vary
depending on number of members), industry, and traders. On top of that, additional
fees apply for each sub-product, for example, fresh banana and processed banana
puree.
The second source of income is the trademark license fee, which applies to the
final product to consumer and is awarded and controlled by FLO’s national
labeling initiatives. This is the largest source of income for both the labeling
254
2010 Financials and Sales Figures. Published by FLO International. Available at www.fairtrade.net,
accessed on February 1, 2012.
216
organizations and FLO International. The trademark license fee is around 1.7%
over annual sales per product, as reported by the UK member.
However, in the case of several products, their licensees cannot find sufficient
amount of merchandise to supply their markets. In general, this lack of product is
led by a strong power imbalance in the distribution chain.
One example is the case study of Fair Trade orange juice concentrate. In this
business, small producers struggle to find intermediate solutions with local
industries to process the fresh fruits into frozen juice concentrate. In most of the
cases, it is the industry that determines the commercial conditions for each season
including product volumes.
In the 2011 season, this resulted in low product availability, concentrated in the
hands of a few. The FLO representatives, whose commitment is to maintain the
product offer to their Fair Trade juice licensees, rather than tackling the problems
in the distribution chain, decided to allow large companies to join the system.
This newly certified large organization can offer 8,000 MT of Fair Trade orange
juice concentrate, an amount which according to producer group statistics, equals
the total consumption of the product in Europe.
The “gap” in the standards which allows this is the description of small
organizations as those in which at least half of the members must be small
producers, and that the organizational structure must be democratic, allowing
participation and praising transparency. Therefore, all larger cooperatives need to
do is to partner with an amount of small producers, get them subscribed as
members, and prove it in their statutes.
All Brazilian cooperatives, formed by orange small-holder farmers, have organized
themselves under what they call the Orange Brazilian Initiative, and positioned
themselves against the decision to get one of the largest cooperatives, which also
owns their own land, certified, but until the end of this research, the referred large
cooperative still had a valid permission to trade.
217
Moreover in the FLO rules it is also foreseen what they call Contract Production
Projects (CPP) which represent a partnership between a promoting body – formed
by a large plantation or organization – and a group of small producers.
11.2 Minimum Price and Fair Trade Premium
While a pre-established minimum price is a protective instrument in times of low
international prices, especially in the case of commodity products, the same does
not apply to gourmet and niche products, such as, for example cashew-nuts. In this
case, the different cost structures among the countries checked by FLO, for
example Brazil and India, are highly divergent.
This makes it a challenge to determine a minimum price that would work for all,
and those with the higher costs will be penalized by a pre-defined price which
offers a lower pay-off.
There are also different minimum prices for fresh or processed fruit, and more is
paid for the processed one, independently from the industrial cost. This should
have been a reward for the producer organizations that manage to partner with an
industry to add value to the final product and therefore escape the commodity trap.
Unfortunately, not all small producer organizations have access to the industry. In
the end, the industry buys from the cooperatives and pays them the fresh fruit
minimum price, then sells the final product in the FT market for the processed fruit
minimum price. In general, this price difference stays with the industry. Again, this
is allowed by the certification standards.
11.3 From a Social into an Environmental Certification Agency
This study revealed that certification criteria are centrally defined and respond to
social expectations and environmental demands from consumers in the countries of
the North; several criteria make no sense at all to producer groups and are seen as
requiring extra work and costs, especially after the third year when the
“improvements” required by the FLO certification start.
The fact that more than one third of the criteria consist of environmental activities
shows a deviation from the original mission of socio-economic development,
218
adapting instead to consumer expectations and adjusting to competing label
proposals.
One example is the criterion for ‘energy and greenhouse gas emissions’ of the
Generic Fair Trade Standard for Small Producer Organizations. Item 3.2.39
mandates that in year 3: in central processing facilities where non-renewable
energy is used you must keep records of energy consumption, take measures to use
energy more efficiently and replace non-renewable sources by renewable ones as
far as possible.
How can small producer organizations, short on resources and with management
teams already multi-tasking, comply with a directive which would be difficult even
for large organizations to respect?
Along these lines, for environmental improvements to extend along the entire
distribution chain, one suggestion would be that FLO-Cert includes a requirement
that their trademark licensees add a carbon footprint measure statement on the
retail product package.
Nevertheless any sort of improvement requirements that would change the statusquo of companies that market their products will probably not take place with the
current FLO pro-mainstreaming mind-set.
11.4 The FLO System Could Possibly Pass a Public Opinion Audit, but
(only) with Corrective Actions
The situations mentioned above show that the FLO system has definitely decided
to be on the side of the market by becoming a certifying agency aimed at
mainstreaming products, often at whatever cost and required exceptions to the
rules.
Different beliefs among member organizations have started to collide and it has
come to the point where it seems that no compromises can be reached. This is
visible in the fact that Transfair, the North American Fairtrade organization, broke
away from FLO International Alliance. Another relevant sign that interests diverge
is the fact that FLO International CEO, Rob Cameron, resigned in December 2011.
219
Fairtrade International has implemented several changes in the last two years,
probably by having anticipated that some of this system’s elements needed to
undergo a retro-fit. Still, they have just scratched the surface. There are more
serious issues related to power distribution which need to be addressed and worked
out.
In the middle of all this, FLO still publishes a report, not externally audited, where
they inform about the positive impact they have in the lives of the millions of
producers in the developing world.
Producer groups are moving towards other Fair Trade certifying agencies, like
IMO Control, from Switzerland, even at the cost of not having their products
accepted by several international buyers that look for products with the FLO-Cert
certification
Producers also have started reporting to the media what is going wrong in the field.
In this sense, journalists and NGOs have an important role to play in reducing the
distance between producer and consumer, either by showing the local contexts as
they are255or by reporting about the focus on mainstreaming and financial results.
The article entitled Fair Trade Proving Anything But in Growing $6 Billion
Market, written by Simon Clark and Heather Walsh and published by Bloomberg
on December 23, 2011 had an impact on consumer perception about Fairtrade.256
Although FLO is still off the consumers’ radar, suspicious producers act as the
watchdogs of what is going on in the field, as they are the most affected. Therefore
the recommendation is that they go back to the origins and focus on the producer
side before this carefully constructed label sees its brand equity soar as an image
crisis arises
255
http://www.eastbayexpress.com/ebx/fair-trade-usas-coffee-policy-comes-underfire/Content?oid=3184779; http://www.latitudenews.com/story/fair-trade-paul-rice-struggles/ accessed
on February 1, 2012.
256
http://www.bloomberg.com/news/2011-12-23/fair-trade-proving-anything-but-to-farmers-with-6billion-sales-at-stake.html
220
12. Implications for Future Research
For the definition of “fairness”, further qualitative research followed by a
quantitative one should be done focusing on the understandings, negotiations and
auditing process managed by FLO-Cert or any other social labeling organization
which applies a certification process, together with producer organizations in order
to identify the criteria which make absolutely no sense to producers and their
communities, those that do have something in common as well as those which
collide with the local values system.
Such a research could be the source and the beginning for definition of a hybrid
ethical trade concept accomplished through greater dialogue.
This research focused on the cross-cultural communication between small
agricultural organizations from Brazil and mid-sized to large companies from
Switzerland. For comparison purposes about the way of doing business culture,
another study should be conducted with large international companies in Brazil.
13. Final Considerations
In writing the conclusions and all along this research I have tried to avoid falling
into a structure that would seem like a kind of handbook of good manners for
doing business between Switzerland and Brazil in a Fair Trade system; or worse
yet, to arrive at conclusions that stigmatize some group for its preferred business
behavior and reinforce existing stereotypes.
This research’s main purpose was to show a different viewpoint on the way of
doing business expanded to the reality of Fair Trade, in which a new economic
moral is applied, and to point out how the constructs of fairness permeate the
relationships by defining what is compliant or not, actor’s roles and discourses.
When buyers and sellers join Fair Trade, they are aware of the difficulties involved
in either buying from the remotely settled small producer organizations, or in
exporting to a foreign country.
As buyers look for possible cooperative suppliers, they should know they will face
infrastructure challenges, different communication patterns, the lack of a second
221
international language, dissimilar level of information, another sort of priorities
and time management style, among others.
Producers must be aware that they will have to somehow adapt to the requirements
determined by Fair Trade criteria and buyer expectations such as financial reports,
environmental planning, international quality standards, and be ready to make their
point in a different language.
This study looked into cultural ways of doing business by critically analyzing three
case studies in dissimilar distribution chains and relational set-ups. I brought up
the most often cited differences as points of attention that can be worked out to
achieve a longer term relationship.
For this to happen, both sides should positively value (at least a few) behaviors and
elements in the other’s way of doing business to provide a foundation for
extending the commercial relation into a partnership.
Nevertheless, just watching out for cultural and socio-economic differences is not
enough for to develop a long-term commercial relationship in Fair Trade. There
are two other relevant topics which need attention.
One concerns how to overcome and overwrite the strongly embedded stereotypes
of the marginalized producer, the North-South divide, and the underdeveloped
regions, among others, as these not only guide behavior and, to some extent, lead
to prejudice, but they also prevent those who are considered marginal from being
active players in the system.
Although some companies have been trying to overcome or change these negative
stereotypes, such image constructs are still very much embedded in the collective
mind. They also come up as prejudice in many of the commercial relations and
sustain the power discourse, in both conventional and fair trade.
After all, changing such stereotypes will require consistent and frequent
communications of newly set messages over long periods of time.
This links to the second key point which is the need to evaluate the extent to which
it is possible to consider cultural relativism in constructing criteria for fairness, by
222
choosing a dialogical approach to define the minimum ethics and eventually
translate them into the set of Fair Trade standards.
In this sense, and based on the different regional perspectives and understandings
on what development stands for, or what the priorities for community members
are, a Fair Trade system will only be successful if adhered to by producer groups,
and if there is an understanding and a mélange of beliefs and expectations from
both sides – representatives from the North and from the South.
During a round table discussion about increasing producer protogonism in Fair
Trade at the 2010 Madre Terra conference, a producer from an indigenous
ethnicity from Talamanca, in Costa Rica, stated: “If you would like to sell your
products in a Fair Trade system, you have to adapt to its rules”.257
One hopes that at the next edition of similar events, producers will not only have
adapted to the Fairtrade rules, but that they also find in it some elements which
reflect their cultural values and socio-economic reality.
257
223
Epilogue
Throughout this study, I have brought up the Eurocentric business model of Fair
Trade standards, as well as the image constructs which follow the post-colonial
“doing good for the poor and marginalized”.
The acid test for this line of thinking is: Would Fair Trade standards be different if
set and centralized by another continent?
There would be different criteria for the auditing standards since they set a group
of expected actions and behaviors for business models, environmental controls and
social development from the perspective of those who prescribe the rules.
As such criteria are culturally sensitive, for example, the concept of socioeconomic development, care for the environment and notion of cleanness; if
written by people from other continents and cultures, there would indeed be
different sorts of conventions.
This is the case of Comercio Solidário Brasil, which includes a system of “group
certification”, where trained producers can certify each other. This comes from
previous experience with organic auditing, through which one group is the
guarantee for another. It is certainly more participatory and includes local
concerns, priorities and values. Yet, although group certification is valid for local
commerce, its acceptance by large retail chains or by final consumers is low.
There are Brazilian certifying companies, which apply a more grass-roots
approach and which are recognized by the large retail chains and consumers, like
IBD258 with standards for defining organic, social and biodynamic. Comercio Justo
Mexico also has its own certifying agency.
In terms of the image constructs, these would also differ if Fair Trade would start
from the non-Northern countries. Following the two examples of Comercio Justo
Mexico and Comercio Solidário Brasil, their main purpose is to promote products
from family farms on the domestic market.
258
http://www.ibd.com.br/pt/Default.aspx accessed on January 5, 2012.
224
The main message they communicate includes “buy local”, support the continuity
of small-holder agricultural properties, organic food, and in some cases it involves
the historical background of the regions where products come from. For example:
“products which come directly from the Mexican fields to your table.”259
In this case, the image construct of the marginalized producer does not apply, nor
does the North-South divide.
What would probably not change is the economic mechanism behind Fair Trade,
and which was the starter of this movement. As the minimum price and premium
are not culture sensitive, then this would then probably be the same, no matter
where the system is based and constructed.
There is a saying: “where there is a social issue there is a business opportunity”.
The challenge is how to address such issues not in an opportunistic way, but with
respect to local beliefs and demands, in a balanced value chain.
259
Productos directos del campo mexicano a tu mesa. Available at: http://www.comerciojusto.com.mx
accessed on January 5th, 2012.
225
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Annexes
Annex 1 – Preliminary Interview Script
Preassessment
With
Producers
Relationship
Buyer Market
What
To access the ‘image of the
other’ through the discourses
and product/producer
symbolic attributes
communicated to the market
How
Artifacts (product
packaging; web-sales,
annual reports, store
ambience, etc)
Producer Buyer
Image of the other
(Generalized perception)
Interview
In your commercial
relationship with Swiss
buyers, how do you compare
their way of doing business
with the Brazilian
way?What are the typical
behaviors from their side?
Interview
Were there
misunderstandings? Why?
If a buyer imposes some
conditions which you
believe are not necessary, do
you negotiate it with
him/her? Examples.
Interview
In the buyer’s way of doing
business. What do you
believe
are
the
factors/elements which are
better, equal and worse in
relation to the Brazilian
way?
Accessed in interviews with
other cooperative members,
to check if they share the
same perceptions about
buyer.
With
Producers
Image of the other
(Inferences
concerning
underlying factors)
With
Producers
Image of the other (Valuation
of the other party)
With
Producers
Image of the other (In-group
back-up)
244
(Continuation from previous table)
With
Producers
Producer
Producer
With
Buyers
Buyer Producer

Self-image
(Country/Regional)
Image
of
the
(Country/Regional)
other
With
Buyers
Image of the other
(Generalized perception)
With
Buyers
Image of the other
(Inferences
concerning
underlying factors)
With
Buyers
Image of the other (Valuation
of the other party)
With
Buyers
Image of the other (In-group
back-up)
Interview
How would you describe
Brazil?
How would you describe
your region?
What products do you buy
from Brazil? Why (in
relation
to other
FT
producing countries)?
Interview
In
your
commercial
relationship with Brazilian
cooperatives, how do you
compare their way of doing
business with the Swiss
way? What are typical
behaviors from their side?
Interview
Were there
misunderstandings? Why?
If there is a fixed
requirements related to the
commercial conditions or to
fair trade that the producer
will probably not be able to
attend, do they tell you so?
Examples.
Interview
In the producers’ way of
doing business, what do you
believe
are
the
factors/elements which are
better, equal and worse in
relation to the Swiss way?
Interviews with other people
in the company who had
relationship
with
the
cooperative, to check if they
share the same perceptions
about the producer.
245
Annex 2 - Aggregated characteristics of the interviewed sample
Claro Fair Trade
Who
Fabio Sagliocca
Function
Monitoring &
producer support
Purchase Food
Where
Claro heaquarters
in Biel (CH)
Claro heaquarters
in Biel (CH)
When
21/10/010
Terezinha Oliveira
(CooperCaju)
Director
Jan 09
Dna Marlene
Sr. Pedro Gomes
Adrian Wiedmer
Producer
Producer
Director
Cooperative
Main Office
Biofach SP
Producer’s farm
Producer’s farm
Skype Call
Marcio Challiol
Quality Control
14/12/010
Jonatas Baerle
Eduardo Mattioli
Rizzi
Commercial
Manager
Agricultural
Engineer
Gebana office in
Capanema
Gebana office in
Capanema
Gebana office in
Capanema
Celso Prediger
Producer
15/12/010
Leandro Feldmann
Agricultural
Technician
Dilo Perraro
Producer
Delclides Perraro
Producer
Neca
Producer
Janine Rossmann
FLO Certification
Stefan Lanz
New Projects
Ivo Vial
General Secretary
Rodrigo Hartmann
Agricultural
Technician
Max Leuzinger
Former Max
Havelaar CH &
Claro FT
Former FLO
delegate BRA
Interface
CooperCaju –
Claro FT
Sebrae Consultant
In his house on
the farm
During field visit
to producers in
Capanema
In his house on
the farm
In his house on
the farm
In her house on
the farm
Gebana office in
Capanema
Gebana office in
Capanema
Coopafi Office in
Capanema
During field visit
to producers in
Capanema
Zurich HB
SwissCam Office
17/11/011
Serra do Mel
Jan 09
Skype
11/11/010
Martin
Mumemthaler
CooperCaju
Gebana
Switzerland
Gebana in Brazil
Coopafi
Bridging Actors
Beat Grünninger
Jean Rabbond
Johan Schneider
21/10/010
04/11/010
Jan 09
Jan 09
09/11/010
14/12/010
14/12/010
16/12/010
16/12/010
16/12/010
16/12/010
17/12/010
17/12/010
15/12/010
15/12/010
26/10/010
246
(Continuation from previous table)
Hans-Peter
Aeberhard
Context Related
Adrien Wiedmer
(in his role as
bridging actor)
Cooperativas Sin
Fronteras BRA–
Adriano Martins
Paula Cubillo
(Cooperativa Sin
Fronteras, Costa
Rica
Juanita Vilchez
(Cooperativa
APPTA,
Talamanca, Costa
Rica)
Stephan Buser –
Director
Olacio Komori
Fabio dos Anjos
Michel
Coagrosol
Total: 40 interviews
Manager project
Camu-Camu in the
Amazon
Gebana CH
Swiss-Brazilian
Chamber of
Commerce
Coffee Producer
from Mato Grosso
do Sul
Coffee Producer
from Parana
Max Rehder /
Fruitag
Trader
Beatrix Grosso
Michel Product
Manager
Reginaldo
Vicentin
Commercial
Director
Ulysses Murakami
President
Euclesio Vicentin
Producer
Jaime Talon
Producer
Osmar Rufino
Producer
Maria Helena
Rufino
Claudio Caetano
Franca
Producer
Technical
Skype call
25/04/011
Skype
16/11/010
Torino - Terra
Madre
24/10/010
SwissCam Office
in Sao Paulo
26/01/011
Brasilia, during
the Ecojus
meeting
Brasilia, during
the Ecojus
meeting
In his office in
Niederhasli,
Switzerland
Michel Office in
Rothrist,
Switzerland
Cooperative
Office
27/04/011
Cooperative
Office
Cooperative
Office
In his house on
the farm
In his house on
the farm
In her house on
the farm
During the field
visit
12/08/011
27/04/011
16/03/011
17/03/011
12/08/011
12/08/011
12/08/011
12/08/011
12/08/011
12/08/011
247
Annex 3 – WFTO Fair Trade Ten Commandments.
Principle One: Creating Opportunities for Economically Disadvantaged
Producers
Poverty reduction through trade forms which can provide small
producers an economic self-sufficiency and ownership.
Principle Two: Transparency and Accountability The organization is
transparent in its management and commercial relations. It is
accountable to all its stakeholders and finds appropriate participatory
ways to involve employees.
Principle Three: Fair Trading Practices
Trading organization should not maximize profit at the expense of
small producers. To develop their activities in line with environmental,
social and economic good practices. A pre-payment of at least 50% is
made available, if requested. The local organizations (cooperatives or
associations) that receive the pre-payment must pass it on to producers
and farmers.
Order cancelation or changes in the total amount of traded goods must
be agreed between the two sides. There is a preference for long term
contracts which allow producers to plan ahead and make investments
for the next year’s production.
Preference must be given to direct purchasing from producers, a shorter
product distribution chain, and fewer trade intermediaries.
Principle Four: Payment of a Fair Price which should be mutually
agreed by all through dialogue and participation. Whenever a floor
price is defined, this should be taken as the basis for negotiation.260Fair
trade market intermediaries, importing companies and ATOs should
support capacity development to enable producers to define their
sustainable production costs and the price that covers their needs.
In the case of the FLO price list, there is a Fair Trade Premium which is
a bonus of about 10 per cent over the cost price of goods. It is intended
to allow producer organizations to invest in social improvements in
their community. There is a recommendation by FLO certifiers and
auditors that this premium be invested in education or other
infrastructure projects. Nevertheless it is to the cooperative and its
members to decide where to invest.
260
FLO has developed a list with minimum prices for several products.
248
Principle Five: Enduring no Child Labor and Forced Labor in
compliance with the UN Convention on the Rights of the Child, and
respecting the fact that several activities developed by small producers
and artisans are handed down from parent to child as far as the
children’s well-being, security, educational requirements and need for
play is guaranteed.
Principle Six: Commitment to Non Discrimination, Gender Equity and
Freedom of Association
Principle Seven: Ensuring good working conditions in line with the
national and local laws and ILO (International Labor Organization)
conventions on health and safety (applies in the case of large
plantations that get FLO certified).
Principle Eight: Providing Capacity Building
Principle Nine: Promoting Fair Trade
Principle Ten: Respect for the Environment. Agricultural producers
should minimize their environmental impacts, by using organic or low
pesticide production methods when possible. Responsible management
of waste, water and soil should be practiced. Organizations should buy
locally to avoid emissions involved in transportation.
Annex 4 – Average Inflation Rate in Brazil from 1995 to 2011.
60.00%
50.00%
Economic Figures
40.00%
30.00%
20.00%
10.00%
0.00%
-10.00%
1995 1996 1997 1998 1999 2000
Inflation 23.17% 10.04% 4.83% -1.79% 8.64% 4.38%
Var Min 54.34% 12.00% 7.14% 8.33% 4.62% 11.03%
Var GDP 4.20% 2.70% 3.30% 0.10% 0.80% 4.40%
2001
7.12%
19.21%
1.30%
2002
9.92%
11.11%
1.90%
2003
8.17%
20.00%
0.50%
2004 2005 2006 2007 2008 2009 2010 2011
6.56% 4.53% 2.54% 4.37% 6.17% 3.64% 6.41% 4.53%
8.33% 15.38% 16.67% 8.57% 9.21% 12.05% 9.68% 6.86%
4.90% 3.20% 4% 6.10% 5.20% 0.60% 7.50% 3.50%
Source: IBGE (Instituto Brasileiro de Geografia e Estatistica)
249
Annex 5 - Fair Trade criteria elements which are highly culture sensitive
The notion of fair and justice.
Gender issues and women inclusion - Although some donor groups and the FT
movement have been trying to suggest (or impose) that women led groups have
a more prominent economic role in cooperatives and communities, this is a
process which needs to be grass-rooted. Even in the case of micro-financing
groups which have developed a specific line of support for women led groups,
in many cases these existing groups are much more to comply with donor
agencies expectations than they indeed promote gender inclusion in the local
context.
Socio-economic development - From an economic point of view there are
different ways to measure and define it based on standard of living, economic
health, GNP and GDP per Capita, etc. From a social perspective, there are
different lines of understanding, but nevertheless it is always linked to a local
perception and values system on what socio development is or could be.
Care for the environment.
Notion of cleanness.
The definition of a minimum price which would apply for all different costs
structure and provide the producer with a descent living.
Source: Author.
250
Curriculum Vitae – Angélica Rotondaro
Professional Experience
Since 2009
HSG Hub Office for South America, Representative.
Desh Marketing. Managing Partner.
2006 – 2009
Holcim Group Ltd. (Switzerland). Global Branding Senior
Consultant responsible for Latin America.
2002 – 2005
Instituto Holcim (Brazil). Co-founder and Executive Vice
President.
1999 – 2006
Holcim (Brazil). Marketing and Communications Manager.
1997 – 1999
Bechtel (Brazil). Corporate Communications & Public Relations
for Latin America.
1995 – 1997
ABB (Brazil). Corporate Communications & Public Relations
Manager.
1991 – 1994
Kodak (Brazil). Marketing Assistant.
Education
2008 – 2012
University of St.Gallen, Doctoral Degree in Organizational
Studies and Cultural Theory.
2001 – 2001
Universidade de São Paulo – MBA in Marketing.
1994 – 1996
Universidade de São Paulo – Master in Management.
1989 – 1992
Universidade Mackenzie – Bachelor in Economics.

Cultural Relativism in Fair Trade – an

Transcription

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