Poor Communities Can Trade Up: For Producers in Poor Countries, Tapping into International Business Can Bring Access to Wider and Wealthier Markets

Article excerpt

Trade does provide benefits, but they may not "trickle down" automatically to the poorest people. It's important to find solutions to fill the gaps between trade-related economic growth and poverty reduction.

A business-driven approach

ITC's Export-led Poverty Reduction Programme takes a complementary approach to "macro" poverty reduction strategies by targeting poor communities directly and striving for a "bottom-up" effect. Its pilot projects focus on products and services that can benefit from short-term, high-impact export promotion activities.

Some examples of the programme's projects include:

* Gourmet coffee in El Salvador. In November 2002, ITC launched a project in the Cordillera de Apaneca, in southwestern El Salvador, to improve living conditions for about 400 poor coffee-growing families. It started by identifying Japan as a target export market for the high-quality coffee they grew. In 2003, despite the general downward trend in coffee prices, the farmers delivered almost a tonne of gourmet coffee to Japan at premium prices.

The coffee, sold as "Cafe Monte Sion", has received environmental and social certification from the Rainforest Alliance. It is also a member of the Association of Sustainable Coffees of El Salvador. The project has had valuable spillover effects, as the national authorities have improved road access in the area; built a primary school for the community; and assigned a teacher.

* Silk products in Cambodia. The silk weavers of Takeo Province in Cambodia make beautiful products such as scarves, handbags and cushion covers. However, these rural producers--mainly women--did not realize how valuable their products are nor how to enhance them with more marketable designs or higher-quality dyes. Lack of knowledge about market access conditions also left them dependent on middlemen. In July 2003, the Cambodian Craft Corporation and ITC helped restructure the work of about 40 families. A consultant is providing training and advice to:

* form production groups;

* improve production techniques;

* develop and adapt products to consumer tastes;

* understand costing and pricing;

* find markets; and

* coordinate with other Cambodian crafts associations.

There is already growing interest from overseas buyers. A European buyer recently organized a trade visit to build relations with the silk weavers. They have also been invited--free of cost--to a Japanese trade fair in June 2004, where they will present a new collection of silk products.

The aim is for 100 families to benefit eventually from the knowledge and structures in place and be able to respond effectively to market demand. ITC and the Cambodian Craft Corporation will also repeat the experience in communities of silversmiths and potters.

* Community-based tourism in Brazil. Tourism is flourishing in Brazil, especially in the state of Bahia. In October 2003, ITC launched a project to create jobs and improve the livelihoods of the 10,000 people who live in the area surrounding Bahia's Costa do Sauipe tourism resort. It is helping poor producers in the area integrate into the value chains generated by tourism, under the Costa do Sauipe Social Sustainable Programme--also known as Programa Berimbau, after a Brazilian musical instrument--that the resort launched. The resort includes hotel operators such as Marriott, Renaissance, Sofitel and SuperClubs Breezes.

The growth of tourism has spurred the development of family agriculture, artisanal products and services that can be offered at the resort. The pilot project will establish:

* an organic waste recycling unit connected to the agricultural productive chain;

* production of organic fruits and vegetables;

* a commercial warehouse and other logistical support for agricultural production: and

* a community centre with facilities for the development of artisanal products, training and the formation of cultural groups. …