Members' Newsletter ~ Quarterly Return 84

QUARTERLY RETURN 84 Summer 2012

shared interest and fair trade

supporting quality and quantity

Family at the heart of co-operative

Exploring the link

The impact of lending to tea farmers in Uganda

Coffee co-operative in Peru supports families

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Welcome After another busy quarter in the Shared Interest office I am pleased to introduce the latest issue of QR. We certainly have lots to tell you about.

Following on from our successful AGM, I joined members of the Supporter Relations Team in Edinburgh where we updated members and their guests about the work that we are doing in the office and overseas. We were delighted with the response both on the day and by the increase in accounts that the event provoked.

We were particularly excited to see an account opened by a guest of one of our members for an incredible ÂŁ20,000. Of course we welcome accounts of any size so please do pass on the Recommend a Friend cards included in QR to anyone that you think might be interested to find out more about Shared Interest.

I am pleased to report that we have received some national recognition over the last few months, we were long-listed for the Guardian Sustainable Business Awards and were runners up in the Big Ideas category of the Observer Ethical Awards.

We have also made the regional final of the Private Business Awards and we hope to bring you good news from the national final in late July.

You may remember that in QR82 we brought you news of our Social Investment Fund Project that we are running in collaboration with Comic Relief. I can now share the news that we have secured our first pieces of lending.

Within this issue we have an update on the banana industry as requested by members at the AGM. There is also information on new lending facilities as well as increased accounts. This month sees us lend to tea farmers in Uganda, brazil nut collectors in Bolivia and a coffee co-operative in Peru.

On the back cover you will see that we are advertising for Non-Executive Directors to join the Board so if you are interested, or know someone that might be, please get in touch or pass on the details.

Also mentioned is an update on our website project.

By the end of August those that request a login will be able to view their account online as part of our new look website. We are really proud of the site’s makeover and we look forward to hearing your opinions on the developments.

Have a lovely summer,

Patricia Alexander, Managing Director

The Banana Question

By Marketing and Relationships Manager, Kerrey Baker

Once bananas are cut down from the trees they are transported to the washing station on site. Thanks to Shared Interest funds the banana producers that we lend to have been able to install cableways, this means that bananas can be pulled along rather than carried on the backs of the farmers.

Since we launched our latest social impact film we have received a number of questions about bananas and the role of the fruit in the communities that it is harvested.

Bananas are the most commonly eaten fruit in the world and as the fourth most important staple crop across the globe, they are significant for food security in many tropical countries.

Shared Interest’s banana lending portfolio is based primarily in Peru. The country is actually relatively new to bananas. Despite its late entry to the market the country has a competitive advantage as the climate is relatively dry which reduces the risk of fungus and allows the farmers to cultivate their bananas without the use of chemicals.

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At the washing station the bananas are cut into bunches, washed and packed into trays. At this point the crowns of the bananas are protected with lemon juice to delay the ripening process as bananas begin to ripen as soon as they are cut from the trees.

I was personally impressed at the inclusive nature of the organisations and the daily input from the farmers on all decisions. Farmers were also working closely with the local university to research fertiliser and irrigation methods. I saw first-hand the huge impact the organisations had on the local community, more children go to school now and two young people have just graduated from university. This would have been impossible without the investment made by Shared Interest members.

To end the trip we visited a local market which displayed an abundance of lovely ripe bananas. They tasted fantastic.

Front cover photo: Brazil nuts harvested by COINACAPA in Bolivia (see page 8)

celebrating

world fair trade day in edinburgh

By Supporter Relations Officer, Ruth Taylor On the eve of World Fair Trade Day 2012, we travelled to Edinburgh to meet with members and their guests at the Royal College of Physicians of Edinburgh.

We wanted to thank our members in and around Scotland personally for their continued support and take the opportunity to meet their guests and tell them a little more about what we do.

The day started with an update from Director of the Scottish Fair Trade Forum, Martin Rhodes, who brought us up to speed on the nation’s campaign for Fairtrade Status. Scotland promises to be the second country in the world to gain Fair Trade Nation status, following in the footsteps of the Welsh Fair Trade Forum which announced its status in 2008. Martin gave examples of some of their inspirational activities, such as schools hosting visits from fair trade producers from as far as Malawi and Uganda.

The rest of the morning saw the Shared Interest team present highlights of the year. Managing Director, Patricia Alexander was keen to thank our Scottish members for their support, especially as several people in the room had been investing since the early 1990s.

Upcoming events Fair Trade on the Fringe Princes Street / Castle Street, Edinburgh 11 – 14 August 2012 We will be at the Fair Trade and Ethical Marketplace as part of the Edinburgh International Festival. If you are an ambassador in the area and would like to help out over the course of the event please contact volunteers@shared-interest.com for further information

Wales International Development Summit, All Nations Centre, Cardiff.

Monday 17 September 2012 We will be present with a stall

Patricia went on to highlight the effectiveness and importance of ‘word of mouth’ promotion as she thanked supporters in helping to promote Shared Interest in their own community.

Marketing and Relationships Manager, Kerrey Baker reiterated this sentiment and thanked our volunteers for the work they have done over the years. Current volunteers; Tracy, Stephen, Jan and Pat spoke to the audience about their experience as ambassadors and how people can invest their time. At lunchtime guests enjoyed browsing the fair trade market and we were even treated to some coffee tasting by our customers Equal Exchange Trading, which created a bit of a buzz and debate among guests.

This was our very first supporter event in Edinburgh and with so many people in attendance, we really enjoyed thanking our dedicated members and ambassadors. Following the success of the event, my southern counterpart, Sally Reith is currently organising a members event in Oxford later in the year. We will be sending invitations to people in the Oxford area but if you live further afield and would like to attend please keep checking our website for further details.

Ethical Finance Conference, Council House, College Green, Bristol Saturday 13 October 2012 We will be running a stall and workshop. http://ethicalfinance2012.eventbrite.co.uk/

Faith event Wesley Memorial Church, Oxford Saturday 6 October 2012 We return to Wesley Memorial Church to meet with members and their guests. Further information will be available soon and all members in the Oxford area will receive an invitation.

Fairtrade Supporters Conference, London Saturday 6 October 2012 Look out for further info at www.fairtrade.org.uk

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shared interest

and Fairtrade We promote ourselves as the world’s only 100% fair trade lender, but what does this actually mean?

Fairtrade represents stable prices, partnership and the empowerment of producers. It is an alternative approach to conventional trade that offers producers a better deal and improved terms of trade. This allows them the opportunity to improve their lives and plan for their future.

When a product carries the FAIRTRADE Mark it means the producers and traders have met Fairtrade Standards. The Standards are designed to address the imbalance of power in trading relationships, unstable markets and the injustices of conventional trade.

Products bearing the FAIRTRADE Mark means producers have been paid a fair price for their produce. This is set based on a consultative process with Fairtrade producers and traders and guarantees that producers receive a price that covers the cost of sustainable production.

When the market price is higher than the Fairtrade minimum price, the market price is payable.

In addition to the minimum price, producers also receive the Fairtrade Premium. This is money paid on top of the Fairtrade minimum price and is invested in social, environmental and economic developmental projects, decided upon democratically by a committee of producers within the organisation or of workers on a plantation.

This process is co-ordinated by Fairtrade International (FLO), the global umbrella organisation for Fairtrade. Its role is to set Fairtrade Standards, support disadvantaged producers and co-ordinate the development of global strategy on Fairtrade.

fairtrade foundation Working in conjunction with FLO, the Fairtrade Foundation promotes Fairtrade within the UK through activities such as lobbying the government and encouraging consumers to change their shopping habits.

The Foundation is responsible for certifying Fairtrade products within the UK. For further information on the Fairtrade Foundation and Fairtrade International please visit their websites www.fairtrade.org.uk and www.fairtrade.net

World Fair Trade Organization (WFTO) WFTO works on an international level to promote fair trade and the impact that it has on lives of producers in the developing world.

Membership of the WFTO is limited to organisations that demonstrate a 100% fair trade commitment and apply its 10 Principles of Fair Trade.

For further information on WFTO please visit their website www.wfto.org

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Views from the

board rooms

Taking our commitment to fair trade further, two members of our senior management team sit on the Boards of these fair trade organisations. Managing Director, Patricia Alexander is Treasurer of the Fairtrade Foundation and Customer Services Manager, Malcolm Curtis is Treasurer of the European Board and the European representative on the Global WFTO Board.

We asked Malcolm and Patricia to tell us about their roles on each Board in their own words: Q. How did you get involved with WFTO and/or the Fairtrade Foundation?

M. My involvement with WFTO dates almost from when I arrived at Shared Interest in 1999, at that time we attended every WFTO meeting to explain how we lend to fair trade.

P. When I first started working for Shared Interest I was a WFTO Europe Board member, however, in 2008 I accepted the role of Treasurer on the Fairtrade Foundation Board and I have been there ever since.

Q. What are your Board member roles?

M. I act as Treasurer on the European Board and I am the European representative on the Global Board.

P. Being Treasurer involves working with the Finance Director on an ongoing basis, liaising with the auditors and presenting the accounts to the Board for approval.

Q. Why is it important for Shared Interest to be represented on these Boards?

M. We believe that WFTO is a very important organisation within the fair trade movement and we want to support them. In the past we did so financially and for three years we funded a Membership Officer to help expand the numbers of WFTO members. It is useful for Shared Interest to understand the key issues that are affecting many of our customers and also to provide guidance

and influence. Our position differs to many people involved within WFTO as we do not trade products, we provide finance so our link is one step removed thus we can, perhaps, give an opinion from a different perspective.

P. We are the only organisation within the fair trade movement that operates across all platforms.

We lend to buyers and producers across both commodities and handcrafts. We are the only organisation to do this so we need to be aware of everything that is happening within the movement.

Working closely with other organisations helps us to understand our customers, their culture and their businesses. This in turn helps us to develop Shared Interest in line with their needs.

Q. Where do you see Shared Interest within the fair trade movement as a whole?

M. We are an important organisation as we lend to 110 fair trade businesses worldwide providing over ÂŁ50m of payments and credit in 2011. Many organisations say they would not exist except for the fact that we have lent to them. We are the only social lender whose focus is solely on fair trade and we are prepared to lend to small organisations and we have the capacity and processes to handle small transactions.

P. Shared Interest is at the heart of the fair trade movement. We couldn’t exist without fair trade and as Malcolm said, many fair trade businesses wouldn’t exist without our help so we really are at the centre of the movement.

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Supporting Quality And

Quantity in Uganda Uganda produces only one per cent of the world’s tea so producers need to ensure high quality in order to be able to compete effectively.

Mpanga Growers Tea Factory has been producing tea since 1995. The farmer-owned organisation has been a Shared Interest customer for almost as long. The group first came to us in 2006 for a loan which enabled them to purchase the Kasunga tea estate. The estate has enabled the group to increase their productivity as well as earn extra income through a training centre at the facility. Mpanga has approached us for an additional credit facility and we are delighted that they have opted to work with us again.

Mpanga’s farmers pick the green tea leaves and deliver them to collection centres. The farmers are paid at the end of each month according to the weight of the tea delivered. Mpanga has recently invested in technology which enables them to trace the green leaves from the individual farms which ensure accurate payment. Once the green tea has been weighed it is then transported to the factory where it is processed into black tea.

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To help ensure the quality required by international markets, Mpanga annually distributes fertiliser to all members. Over the years, the cost of fertiliser has continuously increased and Mpanga has relied on commercial bank facilities to fund the purchase. The increasing cost of fertiliser and rising interest rates on loans prompted the group to borrow from us again.

The fertiliser is important to the group as it will increase both the yield and the quality of the leaves. Improving the quality of the green tea will increase the average auction price by over 10 per cent and it is anticipated that over 1,000 individuals will directly benefit from this loan as the annual earnings of the farmers should increase by over $500 a year.

Mpanga is an important employer in the community and the extra work required for the increased yields will provide greater job opportunities. The group also used the Fairtrade Premium to work with the community on projects such as community shallow wells, the renovation of feeder roads, the rehabilitation of boreholes in the area and the provision of learning materials for local schools. All of these decisions were taken by the Board which is made up of producers Shared iNterest who are elected each year at the Annual General Meeting.

has provided finance to us when it was most needed

Rogers Siima, General Manager of Mpanga said: “Shared Interest has provided finance to us when it was most needed and when it is difficult to obtain financing from other lending institutions.”

Shared Interest’s Customer Services Manager, Malcolm Curtis said: “As Mpanga is so important within the local community, working with them will significantly increase our impact in rural Uganda. We hope that lending to Mpanga will help raise awareness within the local area of Shared Interest and the help that we can provide.”

Mpanga supplies UK-based Cafédirect with tea that ultimately ends up in its one-cup tea bags. If you would like to give the tea a try, drop us a line at membership@shared-interest.com and we will send you out a sample QR84 07

Sharing the Fairtrade Jour

From Amazon to UK At Shared Interest we pride ourselves on our position at the heart of the fair trade movement. As we lend to a mixture of buyers and producers we often end up lending to entire supply chains. this was the case when Equal Exchange trading introduced us to COINACAPA, a brazil nut co-operative in Bolivia that supplies nuts to UK-based Liberation.

All three organisations have Shared Interest accounts and they work together to ensure that the best quality Fairtrade goods are available on the UK market.

Liberation is a partnership of small-scale farmers from around the world, alternative trading organisations in the UK and charities and consumers who love high quality, Fairtrade foods. Liberation was established by fair trade organisations, Twin and Equal Exchange Trading as a Community Interest Company (CIC). Liberation’s ‘community of interest’ is smallholder farmers and gatherers in Africa, Asia and Latin America and consumers in the UK and around the world. The largest stake in Liberation (42%) is owned by a co-operative of eleven farmers’ groups from eight countries in Africa, Asia and Latin America. Farmers receive a fair price for their produce, have seats on the board of the company and participate in any profits it makes.

COINACAPA is one of the smallholder groups with a stake in Liberation. The group, which is based on the northern border of Bolivia, is made up of 387 members who collect nut pods from the floor of the Amazon and transport them to the co-operative to be processed.

Men and women are able to participate equally in the group and often whole families and communities are involved in the nut collection.

COINACAPA holds both FLO and organic certification and provides training for its members in the standards required by these certifications. The group is forward focused and looking to ensure sustainability for future generations. The co-operative provides agricultural practice and forest management training to all members.

It also prohibits both slash and burn techniques and the hunting or capture of animals for sale.

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COINACAPA has developed a series of social projects. These include purchasing household items for members to help improve their quality of life. The co-operative is helping members to build community centres and is working to protect the environment by teaching members how to preserve the trees that they farm. COINACAPA has also purchased some small trucks to reduce the cost of transporting nuts.

rney:

Coffee and Cocoa

While we continue to diversify our product range, coffee and cocoa continue to be two of the main markets that we make payments to.

We have recently approved increased facilities for two co-operatives in Peru, Cenfrocafe and Naranjillo.

Cenfrocafe, which is Shared Interest’s biggest producer customer, has been based in northern Peru since 1999. The organisation rents its main warehouse and administrative offices in Jaen however, the warehouse no longer has the capacity to cope with the coffee yields and so the group has approached us for a term loan that will enable it to construct new offices, warehouses, laboratories and a roasting facility. Once construction is complete the organisation will save $41,000 a year in rent.

Naranjillo is the only cocoa co-operative in Peru that manufactures cocoa products such as cocoa butter and cocoa powder as well as exporting the beans. The group has applied for an increased facility that will allow it to pre-finance bigger contracts and buy cocoa from their members at harvest time.

We have more income, more work and more dignity

Casildo Quispe, COINACAPA’S Commercial Manager, says that working within the fair trade arena has been of huge benefit to the co-operative.

Speaking of the Fairtrade Premium he said: “Before, we sold to local middlemen for lower prices. If someone needed to go to the doctor they would have to borrow money from the owner of the land and then be in their debt - they would have to promise to commit all of their Brazil nuts to the landowner. This is the difference Fairtrade has made.

“One of our gatherers, Luciano, who is 57, had cataracts on his eyes. He could hardly see and thanks to the Fairtrade premium he was able to have an operation which has changed his life.

The father of another member was working and a tree fell and hit him hard on his head. Because of Fairtrade they could take him to the best hospital – they knew COINACAPA had the resources to pay

the bill and his family knew he would be well looked after. This gives such a feeling of security that there is help if anything goes wrong.”

Premium money has also been used by COINACAPA for the construction of ‘payoles’ - places to keep nuts safe from water, animals, petrol and chemical contamination, to ensure the quality of the nuts is maintained. Here they can be safely stored, cleaned and selected for export. As one gatherer Benedicto Gonzalez says: “Since we started the co-operative it’s as if we’ve gained our freedom. It feels like we’re not slaves any more. We have more income, more work and more dignity.”

The gatherers believe their quality of life will improve; they will be able to build their own homes and buy some animals. Casildo says: “Some of the premium will be destined to go to the purchase of books and notebooks and for clothes and uniforms for children to go to school. We hope to be able to provide scholarships so our children can go to university. Those who receive the scholarships will come back to COINACAPA and work for the co-operative, maybe after studying agricultural techniques or accounting.”

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Family at the Heart

Of coffee co-operative

La Prosperidad is a group of small holder farmers that has been growing coffee in the west of Peru, 1,100km from the capital Lima, since 1968. Despite an unstable period in the 1990s, more recently the group have seen a steady growth in members, yield and sales.

Describing their co-operative, La Prosperidad said: “With a great spirit of solidarity and social entrepreneurial vision we have grown, reaching the highest levels of quality markets in the world. We are small producers of coffee and our organisation provides services for collecting and marketing of coffee, we also provide social services and micro-finance for our members.�

All farmers are responsible for depulping, washing, fermenting and drying the beans that they harvest.

Those that live in the local area are able to do this at La Prosperidad’s processing plant.

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Once the beans are delivered they are subjected to quality control processes before being packed for export by the co-operative.

In addition to the processing facility, storage warehouse and central offices, La Prosperidad has also established a nursery for the nurture of coffee plants and an organic fertiliser processing plant. The group uses guinea pigs to create fertiliser that helps the plants to grow and as a result of this innovation they expect to increase their coffee yields from 300 to 1,000 bags of coffee per month.

La Prosperidad places family at the heart of its operations. All members are viewed as family, and the co-operative works to support farmers and their families by providing training for the youth of the community and ensuring the rights and employment of local women.

La Prosperidad also contributes towards health care and to an education fund for farmers wishing to progress to management level. The group also offers saving schemes and funding for school supplies to ensure that the farmers’ children are able to attend local schools.

Shared Interest’s Credit and Service Manager, Andrew Ridley visited the group last year.

Andrew said: “Visiting La Prosperidad was an amazing experience; the vertical climb to reach the co‑operative, which is 1,750m above sea level, seemed never ending.

The group organises a number of different activities and social projects to improve the quality of life of its members. The Community Outreach Fund aims to promote and strengthen community development.

La Prosperidad also provides workshops and demonstrations in best practice farming techniques.

Over 330 farmers attended workshops where they learned how to prune their coffee trees to increase their harvest. This is especially important for older trees.

On the steep slopes of the Andes, soil erosion is also a major issue, so farmers have been taught how to construct barriers (made either from stones or other ‘dead’ material or from ‘living’ plants in the form of hedges) to catch the run off water from the steep slopes. Over 200 farmers have since implemented these techniques on their farms.

I hope we will be able to support them through Theire expected growth in the coming years Seeing the coffee groves and the way the group had diversified their sources of income through their fertiliser plant, guinea pig farm and vegetable plots made the visit even more interesting.

Thanks to Shared Interest’s members, La Prosperidad will now be able to pre-finance their orders. I hope that we will be able to support La Prosperidad through their expected growth in the coming years.”

welcome pack We really couldn’t continue our work in the developing world without the support of you, our investors.

To show our appreciation, all new investors are sent a welcome pack which contains information about Shared Interest, including advice on how to manage their account.

The pack contains all of the forms you need to deposit or withdraw funds or to change your personal details; there is even space for you to store your quarterly statements.

These packs are available to all investors.

To request a pack, please email membership@shared-interest.com with your name, address and account number.

Alternatively you can call membership on 0191 233 9102 to request your pack.

Vacancies on our Board We are currently looking to recruit new Board Directors to fill posts vacated by retirement of nonexecutive directors.

If you have an understanding or experience of governance with any of the following skills and are interested in joining our Board please contact Margaret Woodhouse for further information.

• Accounting / Finance • International Development

The closing date for applications will be 31 July 2012 Email: recruitment@shared-interest.com Telephone: 0191 233 9100

Shared Interest Online You will soon be able to access your Share Account details through a dedicated area on our newly enhanced website. It will enable you to do things like see your account balance and view statements online. This is a major development for Shared Interest and we are looking forward to getting you started.

All you will need to get online is a unique user name and password. Should you want to sign up, these will be assigned to you by email and you will be up and running in no time.

If you are a Shared Interest volunteer or ambassador, you will also benefit from an online community with the options of sharing information with our entire network of volunteers, all from the comfort of your own home.

An introductory letter will be with you soon outlining all the benefits of this facility.

Contact us Shared Interest 2 Cathedral Square, Groat Market, Newcastle upon Tyne, NE1 1EH 0191 233 9102 Membership@shared-interest.com

Quarterly Return is the newsletter of Shared Interest.

Shared Interest Society Ltd is a fair trade lending organisation which is a member of Co-operatives UK. It uses the pooled investments of its Members in the UK to effect real and lasting improvements to people’s lives in the developing world.

Shared Interest Society Ltd is registered with the Registrar of Friendly Societies, number 27093R. The Directors decide on what the interest amount will be, if any, after the end of the financial year when financial results for the past year are known.

Since 1 December 2008 the interest rate has been 0%.

QR is printed on paper from sustainable, well managed sources certified by the Forest Stewardship Council.