Fair Trade, Fair Finance, Fight Global Poverty
By Rick Hodsdon, Board Chair, Oikocredit Support NW
The Rubric of St. Mark’s Episcopal Cathedral
Oct. 1, 2008, Vol. 66, No. 10
There is never a good time to be poor, but the worst time has got to be when the economy is on the skids. With world-wide financial markets reeling from the sub-prime mortgage crisis and the US economy in recession, these are tough times indeed for many Americans. But the times are even worse for the one-third of the world's population, more than 2 billion people, who currently survive on less than $2.00/day in countries with little or no social safety net to provide assistance when crops fail or commodity prices collapse.
Happily, we can do something to improve life for disadvantaged people around the world, by purchasing products certified as Fair Trade goods. Fair Trade items put more money in the pockets of their producers than free trade (or "open market") merchandise, which all too often are simply goods produced and sold at the lowest possible cost without regard for the welfare of the people actually producing the commodity.
Fair Trade = Fair Deal for Producers
Fair Trade commodities make up a small percentage of global trade, but are vital to small producers and traders in developing countries. Comprised primarily of agricultural products and handicrafts, Fair Trade goods are marketed to consumers in developed countries. In 2007, the world-wide volume of Fair Trade goods was only $3.6 billion, less than half of 1% of the total global agricultural trade. Despite its tiny share of the world market, Fair Trade supports an estimated 7.5 million disadvantaged producers.
Episcopal churches in western Washington already support Fair Trade through their purchases of Bishop's Blend coffee and cacao, such as Divine Chocolate. Along with coffee and cacao beans, add "credit" to the list of fair-trade commodities attracting attention from Christian social-justice groups and socially-responsible investors of all denominations.
Credit is the life-blood of all business, whether fair trade or not, but getting credit at affordable rates is difficult for small producers in poor countries. Large and well-established businesses can usually obtain loans from commercial banks, but most banks won't extend credit to small farmers, cooperatives, and micro-entrepreneurs lacking collateral. Fortunately, over the past 25 years, non-profit organizations like Oikocredit have been created specifically to address the financial needs of the global poor.
Fair Trade + Fair Finance = Better World
Oikocredit (from oikos, meaning "household" or "community" in Greek, the root of both "economy" and "ecology"; "credit" comes from the Latin, credo, meaning, "I believe") is an international, ecumenical cooperative that promotes the empowerment of disadvantaged people around the globe. Oikocredit offers credit on fair terms to borrowers in less-developed or developing countries; these small loans are then used to start small businesses or cooperatives.
Along with lending funds at below-market rates of interest, Oikocredit and its 700 project partners around the world provide technical assistance and monitor projects to ensure ecological and economic sustainability, as well as compliance with Oikocredit's stringent ethical standards. Oikocredit's investors receive a small dividend (1 - 2%) and enjoy the rewards of knowing that their money is working for social, not just financial, benefits.
Where does Oikocredit's money come from? It comes from socially-responsible investors, church pension and other funds, and from ordinary people like you and me. (Individual US citizens can invest as little as $1000 in Oikocredit Global Community Notes). To find out more about the programs, visit Oikocredit USA's website at: http://www.oikocredit.org/sa/us/doc.phtml.
Oikocredit Support NW, an ecumenical non-profit organization, exists to inform the public about Oikocredit, microfinance and its impact on the lives of people who need - and deserve - access to fair finance in order to improve their lives through their own efforts. To learn more about our activities at Saint Mark's and the wider Puget Sound community, contact them at:
oikosupportnw@gmail.com.