People's Recovery, Empowerment and
Development Assistance Foundation, Inc.

PROJECT TITLE:

Fair Trade Marketing and Product Development Assistance to NGO's, Cooperatives, Small Community and Family Enterprises

PROJECT AREA AND SCOPE:

Luzon and Visayas with limited extension to some parts of Mindanao. The project provides technical assistance in the form of product development, fair trade marketing and business capability trainings to producer NGO's, grassroots organizations, community enterprises, cooperatives and family based enterpeneurs.

I. PROJECT IMPLEMENTATION

II. PRODUCER'S PROFILE

III. PROBLEMS ENCOUNTERED

I. PROJECT IMPLEMENTATION

REVIEW AND CLASSIFICATION OF EXISTING PREDA FAIR TRADE PRODUCERS

For the past 17 years in Fair Trade export, the PREDA Fair Trade has helped more than 100 producers of traditional handicraft, furnitures, house decorations and novelty items. The income of the producers derived from their production output during the better times were enough to earn a decent and dignified living undeprived of basic necessities in life. The producers who are poor, basically farmers and ordinary laborer s can at least send their children to school and can afford to have nutritious food on their dining table.

The recession that swept over ASEAN region, in Europe and in the United States in the late 80's and early 90's quickly changed the economic boom for handicraft products as the cold war came to an end. Intense competition grew in the region among neighboring countries and the international market was flooded with much cheaper items that are produced in large volume and in the cheapest cost of labor available. The entry of China into the mainstream affected many economies. Competition among producers intensified in the form of new designs, quick delivery system, product quality and cheapest price. These four (4) principles of marketing strategy was a big challenge to the small craftspeople and NGOs facilitating local enterpreneurship as an alternative to regular employment and as another economic activity to augment their income from regular livelihood.

Due to scarcity of new designs and inability of the producers to develop new samples, coupled with the emergence of China's most improved quality but less expensive items that are much similar to what is produced by the Fair Trade producers and family enterpreneurs, many were not able to compete and were not able to sustain their income. There was decrease of orders from the so-called Alternative Trading Organizations mainly in Europe.

It is along this economic reality that the project is undertaken by the Preda Fair Trade Programme. Without continuity of the assistance from Preda, many producers, specially among the enterprising NGOs, cooperatives and community enterprises would have been closed down due to unsustained market and insufficient operating capital. The Preda Fair Trade like the few other Fair Trade organizations in the Philippines survives the economic onslaught by sustaining the program with more projects that will deal directly with the weaknesses of the small producer groups. Marketing of the products from the beneficiaries is one of the major components of the project. This itself sustained the operations of Preda and made it possible for Preda to continue to provide assistance to the beneficiaries.

To date, PREDA is directly focusing its attention to the most promising producers of different product lines and indirectly working with more than forty other NGO's, PO's, Cooperatives, most of which have products that are still on the promotional level as Preda tries to assist them in product development and small business management with other partner NGOs that Preda Fair Trade cooperate with. Local marketing of products thru the usual outlets and trade bazaars was also conducted to test their products and generate income in the process.

PRODUCERS	PRODUCT LINE	PRODUCT ITEMS
PANGASINAN Producers	Buri-midribs - Rattan	Baskets, Magazine, Racks, Wine Racks, hangers, Stools, Hamers, Toy Chest
BALOY / NAGBACULAO	Buri Midrib, Split	Bookcases, Nesting tables,
CABALAN Producers	WICKER Baskets Bowls	Fruit Trays, Baskets,
HP Handicrafts	Cocoleaves Baskets	Planters
BATAAN Producers	Clay Potteries	Handpainted jars, Lampshades
Marinduque Wood Carvers	mobiles, Garden Accent	Birds / Fishes
Mahapa Cooperatives	Abaca Products	Angels
GEFA Philippines	Fashion Accessories	Hand painted Assorted Designs Wooden Earrings, necklaces, bracelets, hairclips, hair elastics, purses
ADS Arts and Crafts	Pumice Stones	Candle Holders, Foot Scrubs, Paper Weights, Frames
John Bosco	Capiz Products	Assorted Designs Christmas Decorations
Nora Jayme	Fashion Accessories	Handpainted assorted wooden designs Bracelets, necklaces
Edgar Ranili	Handpainted Assorted Windchimes	Animal Designs Wind Chimes

The PREDA Fair Trade Programme informally accredits NGOs, Cooperatives, Community Enterprises and even family-based micro-enterprises as Fair Trade Producers if they operate within its criteria.

Identification and accreditation of new Fair Trade Producers is part of this project with the purpose of determining which organization to assist and what kind of assistance to be provided. To facilitate this enormous task, Preda strategically made partnership with other existing organizations with similar objectives rather than to compete with each other's successes since all profess the same prime objective i.e. poverty alleviation. For this reason and for the same purpose and objectives the Preda Fair Trade Programme made a partnership with the Canada Assisted Community Enterprise and Development Incorporated (CACEDI) since it was founded. Mr. Alex Corpus Hermoso, the Programme Director of PREDA Foundation is also the founding President and prime mover of the national network of Community Enterprises, NGOs and Cooperatives operating in Luzon, Visayas and Mindanao. The member organizations has enterprise development and livelihood projects. The group formalized into a network taking-off from the group of beneficiaries of the Canada Fund for Local Initiatives under the office of the Canadian Ambassador.

The network now have more than 60 active members. All of them have products that are being developed and promoted for the local and export market thru the Preda Fair Trade marketing. Most of the members have joined the local trade fairs organized by Cacedi and managed working together to supply local outlets. Preda and Cacedi is working together to assist the producers and plans to invite other marketing organizations to help and assist them further.

The Preda Fair Trade accredits all Cacedi Proponents as Fair Trade Producers once they pass the criteria set forth. Once they are accredited, Preda FT obliged itself to promote their products thru its direct market linkages with the Alternative Trading Organizations (ATOs) in Europe and Japan. In this way, their products are given the chance to be tested not only in the local market but also in the export market. However more product development assistance has to continue since not all the products conform to the international market demand.

a. AFFCUI (Antique Federation of Cooperatives Inc)
Products : Mascobado Sugar, Banana Chips, Ube yam Powder,
Handwoven Piña Fibers

b. KATAKUS from Davao, Mindanao
Products : Novelty items made of handmade paper

c. Ilocana Cooperative Executive Development Foundation
Products : Handwoven Baskets & Trays, Handloom Woven Blankets, Buri Bags

d. Antique Development Foundation (ADF)
Products : Handwoven Abaca and other fibrous plants made into products such as bags and baskets.

e. MERCIPHIL Development Foundation, Incorporated
Products : Processed canned goods

f. Pagtinabangay Foundation
Products : Handwoven mats, hats and bags made from buri leaves

g. TOUCH Foundation
Products : Barquillos sweets and cookies

h. MANDIGA OB-OBO
Products : Organic upland rice in many varities

i. ABARTE' PAPEL SYNDICATE
Products : Handmade Paper Products, novelty items such as picture frames, dried flowers

j. KAFCODE Inc.
Products : Paper Twine, Indigenous woven cloth made by the natives of Mindoro, various kinds of baskets made from rattan, forest vines, twigs, etc.

k. Tinambacan Cottage Industries
Products : Embroidered Mats, Wall Decors, Placemats

l. Kabayan Weaving Arts and Crafts
Products : Indigenous handwoven cloth for Bags, Placemats, Blankets

m. Notre Dame of Jolo Cottage Industry Inc.
Products : Handwoven Pandan Bags and other novelty items

n. New Earth Grassroots Alternative Development Center, Inc.
Products : Wall Decors, Floor Mats, Woven abaca cloth

o. Magsaysay Handmade Paper
Products : handmade paper fans, bags and others

p. DMMMSU - SRDI
Products : Silk products (Scarf, Handkerchiefs, Shawl, Flowers, Fabrics, Novelty Items, Yarns)

q. Kadtuntaya Foundation, Inc.
Products : Indigenous handwoven "Enaul" Cloth, Scarf, Table Runner, Training Bag, Handbag, clutchbag, folder, training kit and other indigenous house decoration

r. Community Enterprise Support
Products : Stonecraft, Crocheted Linen Table Cloth

s. USWAG Development Foundation
Products : Nito bags and baskets, Abaca Woven Cloths, Bariw and bags, raffia woven cloths and placemats, abaca slippers and sandals and other novelty items.

t. Nagkakahiusang Kababayen -an sa Cagwait, Inc.
Products : Give Away Items made of Abaca

u. Mother Ignacia Research and Dev't. Center
Products : Handmade Cogon Paper Products, Fossilized flowers from acacia leaves, conhusks flowers, novelties / handicrafts.

v. Southern Phils. Maranao Business Agricultural Association
Products : Loom Woven Products (chaliko, necktie, shoulder and hand bags, placemats, table mats, malong, blankets, etc.

w. Igorot Hanidcrafts Inc.
Products : Bamboo products

x. Institute for Small Scale Entrepreneurship
Products : Gifts / Toys, Housewares, Handicrafts, Baskets, Furnitures

y. Mangyan Mission Paitan
Products : Packbag, rattan tray, rattan christmas decors, nitoplates, baskets, hammocks

z. Rendear Industries
Products : Basketwares, Christmas Decors and Artificial Flowers

aa. Garaem Development Foundation, Inc.
Products : Banana Chips, Ginger Tea

bb. Igorot Tribal Assistance Group (ITAG)
Products : strawberry jams and jellies, stuffed - toys, handicrafts, cutflowers.

Six (6) other small producer groups were identified during the prestigious National Trade Fair that was held at the largest Mall in the Philippines. Preda Fair Trade for its part also participated in the Fair to exhibit and promote products from Pangasinan and Bataan provinces.

The following small producers who participated in the National Trade Fair joined the bulk of Preda assisted groups:

Products:
a. Michael Concept Assorted hand carved natural and painted key chains, letter openers, bookmarks, windchimes

b. Trappist Monastery Cocoshell and Bamboo Kitchen Utensils

c. Bamboo Products Trays, Planters, Magazine Organizers, Coupon Bond Holder, Lampshades)

d. Barangay Anunas Multi - Wrought Iron Light Furnitures and Office
Purpose Cooperative, Inc. Accessories
(BAMPCI)

e. DARSLYN Ceramics Clay Planters and Umbrella
Stand with tribal text carvings

f. LINGAYEN Handicrafts Assorted animal shaped buri midrib strands

Formulation of Training Program

Two set of modules have been prepared to facilitate organizational development of grass-root producer groups.

1. People, Fair Trade and Development : An Orientation

This module is an orientation that will deepen awareness of the producers in the issue of Fair Trade and the role of people in development. Presentation of PREDA Fair Trade Program is included in this orientation. Expected output is a plan that will enhance partnership or how PREDA Fair Trade Program will help in the socio-economic upliftment of the producers.

2. Organizational Mechanics Seminar

This seminar is the backbone of organizational development for this will help organize and strengthen existing producer organization.
Components of the seminar were vision- mission- goal formulation, constitution & by-laws, facilitation of meeting, writing minutes of meeting, committee formation and resolution making.
Methodology will be a combination of lecture-discussion, workshop and role playing.

Please refer to the attachments for the copy of the said modules.

Organizational Development for Producer Group

1. Formation of Simple Producer Associations

There were continuous area visit and monitoring conducted, but this time it was concentrated with the grass-root producers for we found out that they were the one need to be organized.

During the visit , we get basic information on producer's profile and conducted Focus Group Discussions (FGD) about the need to form a simple producer association. Among the three area visited, Pangasinan Buri-Rattan Handicraft Producer had expressed the need to be organized.

To date, we already facilitated series of meeting-orientation on fair trade and community organizing. Organizational mechanics seminar was given in a sub- topics, among the topics given were formulation of constitution and by-laws, committee formation and facilitation of meeting.

2. Formulation of Membership Qualification

We adopted the Fair Trade Criteria to be the Membership Qualification guideline for interested producers/organizations.

PROMOTES PRODUCER'S WELFARE
Ø decent working conditions with sanitary facilities and healthy environment
Ø absence of unfair labour practices, exploitation and derivative child labor
Ø labour price based on scientific calculations with respect to the minimum wage for cottage industries
Ø aimed at financial and economic sustainability of members
Ø income derived helps in getting better education, health, food shelter and other basic needs

PROMOTES PEOPLE'S PARTICIPATION

Ø existence of a process by which participation in decision making by members of the production group
Ø special attention to the participation of women people in all aspects of production
Ø special attention to the participation of indigenous people and the physically handicapped in all aspects of production
Ø promote self-help and autonomy of the organization
Ø encourage local initiative, counterparting and community resourcefulness
Ø participation in community activities to promote social justice and overcome exploitation

PROMOTES ENVIRONMENTAL SUSTAINABILITY

Ø use of energy-saving production methods that are harmless to health
Ø environment friendly production systems and management
Ø use of local renewable materials
Ø conservation and utilisation of natural resources

Ø priority given to agricultural and farm products
Ø production with less waste and the recycling of materials

PROMOTES LOCAL AND EXPORT MARKET

Ø products with competitive quality at reasonable price
Ø pricing of product based on scientific calculations with respect to respect to regional competitiveness
Ø produces generally functional items satisfying consumer needs to sustain a strong market for producer sustainability
Ø continuous development of sufficient production quantity
Ø with marketing plan
Ø with reasonable delivery time
Ø provide and share product research, design and product development
Ø capability to forge long term business partnership with buyers/ traders

PROMOTES SOCIO-ECONOMIC DEVELOPMENT

Ø production or manufacturing is part of the income generating project of the fair trade organization
Ø direct beneficiaries belong to the impoverished families and communities
Ø create alternative job to augment income from regular livelihood
Ø provide skills training and appropriate technology transfer
Ø enhancement of entrepreneural development
Ø provide financial and technical assistance in production
Ø assist in developing local and export market for its products
Ø advocate for fair trade practices
Ø contribute toward socio-economic progress of the country

These criteria may be applied in different ways and degrees depending on the nature of the organization, its organizational development and its ability to generate income and deliver services.

KINDS OF FAIR TRADE ORGANIZATIONS

o A grass-roots group. Usually village or urban based production group or small scale family led project.

o A registered cooperative or an NGO
o A recognized community associations or People's Organizations

o Training production workshop for socially disabled or physically handicapped
o A private business organization striving for social objectives and goals similar to an ATO or IMO
o An Alternative Trading Organizations (ATO) or Intermidiate Marketing Organization (IMO) that provides marketing, distribution, export and developmental services for several small scale producer groups or cooperatives.
o A commercial company that work with established Fair Trade organizations, ATOs or IMOs providing processing facilities to cooperatives and grass-roots producer groups.

IMPLEMENTING GUIDELINES

Ø In applying and implementing the criteria, the local economicand social circumstances and the condition of the producer group or organization must be taken into considerations. These can differ from one group, region or locality to another.

Ø Not all the criteria can be fulfilled at the same time. It is recommended that a gradual development in the group's ability to practice fair trade be recognized and assisted to meet the most essential criteria. Perfection in meeting all the criteria is seldom possible.

Ø The essential principle of practicing fair Trade is that the welfare of the producers is the primary consideration. That their basic expectation to met through their own efforts in partnership with other organizations such as the national ATOs, IMOs or Fair Trade Organizations doing international importaion and distribution.

Ø That the creation of work with dignity, decent healthy sorroundings, fair remuneration with security of work, workers participation, free from exploitation and environmentally safe and with expanding markets are the most fundamental criteria to be implemented.

Marketing Assistance

• l As part of the promotion and marketing assistance, we participated in local exhibit, trade fair and sales as follows:

September 4, 2000 - Exhibit and sales inside the Japenese Peaceboat docked inside the Subic Bay Metropolitan Authority, Philippines.

 

September 20-24, 2000 - PREDA together with CACEDI joined the Regional Trade Fair Held in Manila, Philippines.

 

• Catalogues of different products were also done and send to PREDA partners and alternative marketing organizations in Europe, Germany, Japan, and US

• As a result of massive promotion, we have a good sale of for the year 2000 - Compared to 1999 we had an increased of 30.5% in food and 17.8 % in handicrafts & Fashion Accessories. Please refer to the attached sales charts.

Fair Trade Networking/Advocacy

o Solidarity Visit

Last August 6-24, 2000, we facilitated the solidarity visit of 15 volunteers from SETEM-Barcelona, Spain. They visited and lived with some of our producer group. Highlight of the visit was the "contribution project- improvement of workplace of one of the producer", this project was materialized from the contribution of the volunteers and from the PREDA Fair Trade social development assistance.

o Trainings/Seminars/Conferences

September 5-9, 2000
Project Officer attended the " Gender Conference on Small and Medium Enterprise Development" held in Baguio City. This conference was attended by different members of Philippine International NGO Forum which aims to enhance campaign on gender equality in enterprise development.

October 11-14, 2000
The Programme Director, General Manager together with 2 Producer Representatives joined the "IFAT Asia Conference" held in Antipolo City, Philippines. It was a fruitful conference because of the relevent presentations such as Impact of Globalization on fair Trade Mission, Market and sustainability, Financial Sustainability in the Asian Non-Profit Sector, Engaging in Mainstream Market and IFAT Guidelines on self-assessment.

December 7, 2000
Project Officer attended one-day seminar on " Developing Business in Organic Products" held in Queson City, Philippines. The seminar highlighted the importance of producing genuine and organic products, its environmental and biological effects to human being . As an output, participants agreed that continuous networking and support to organic producers will enhance organic movement.

o PREDA participated in the regular meeting and activity of the Small and Medium Enterprise Development Council of Zambales Chapter.

MONITORING VISITS TO PRODUCER GROUPS

Visits to producer groups had been initiated by the General Business Manager together with the Programme Director and one of the implementing Staffers since the project begun in the year 2000. There had been 7 producer groups that had been visited, practically one focused producer every month. This is aside from the usual consultations and meetings that has to be conducted in the course of the assistance program and business transactions.

The monitoring visits resulted in gathering basic information on the producer's profile and the conduct of rapid social assessment. To maximize the time, expense and effort during the visit, business negotiations to follow-up the status of the production of certain products that were previously ordered from them was also done.

An example of such visit was done with the Pangasinan Buri - Rattan Handicraft Producers. One of the Project Officers facilitated the meeting with the producers with the following agenda and activities:

a. Orientation about the objectives of the Preda Fair Trade Program

b. Presentation and discussion about the necessity of forming a simple producer association among the members so that they can avail of the services provided by the Project.

c. Strengthening of their existing cooperative endeavor leading to the formation of a producer association.

d. Presentation of new product trends and new designs.

e. Discussion on the required quality and on-time delivery of their products.

f. Discussion of other problems that contribute to poor quality and delayed delivery time of purchased order.

Having realized the benefits of self-organization the participants during the discussion always agreed to organize themselves into a simple neighborhood association to start with and further strengthen their association by joining study groups and relating with other more organized groups within their vicinity. It was always easy to convince them to organize themselves since they also realize that the purchase order given to them has to be in compliance with the policies and regulations set by the Preda Fair Trade. The production capital for example has to be in the form an interest free loan given only to organized production groups. Likewise, assistance in the form of improvements in their group working area has to come from social dividends derived from collective sales of their products.

NGO- PO ASSISTANCE

1. Product costing and pricing assistance to CACEDI.

ASSISTANCE TO PRODUCERS

* Interest free production loan assistance
A maximum of thirty percent (30%) of the total amount per purchase order is given to the producers as production loan assistance and as capitalization assistance that is automatically deductible to the payment of their goods upon full delivery.

* Marketing Development Assistance through Fair Trade Organizations
* Basket and Furniture Finishing
* Packaging and Container Loading Facilities
* Export Documentation
* Consolidated Export Shipments

III. PROBLEMS ENCOUNTERED

The frequency of monitoring visits was hampered due to lack of implementing staffers. Monitoring visits to producer groups in the past 6 months had been limited and the formation of producer associations, formulation of membership qualifications and the drafting of policies for the producers' groups were not yet done as expected.

Since most of the members are simple farmers with incomplete education, they need to be assisted in the formation of their own association starting from the most basic organizing techniques. Many of them can hardly read or write but nevertheless, they can express themselves verbally well in the vernacular language. Naturally, they can argue their defense when it comes to problems concerning quality and untimely delivery, a good point of empowering leadership.

Negative attitude of some producers with regards to organizing somehow affected the implementation of the project, however through continuous area visits, meetings and trainings , they were convinced to undergo organizing.

Orders and some inquiries are sometimes overlooked. But with systematization this problem was limited.

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