The fair trade challenge
The alternative trade network in Visayas has reinforced peasant organisations and the radical left. Mark Johnson The Philippine alternative trade network developed after the 1983 collapse in sugar prices. Peasant organisers, many linked to the Communist Party, saw alternative trade as a partial solution, and a valuable tool for organising the rural poor around a progressive agenda.
With the slogan "trade not aid," Japanese aid organisations financed the development of alternative trade as a self-sufficiency programme.
The People's Fair Trade Assistance Center (PFTAC) enabled farmers on Bohol island to diversify into organic, red rice, which they marketed mainly in the Netherlands. They also expanded production of green balangung bananas not normally consumed in the Philippines, but very popular in Japan.
Bohol's poor farmers had little interest in commercial banana production, because there was no existing market. But thanks to PFTAC they have split their fields between rice and bananas, which makes them much less vulnerable to the vagaries of the international market, or crop failure due to drought or pests. Alternative development
Groups like PFTAC try to persuade peasants to form co-operatives. But they recognise that most rural poor dream of a family-owned plot of land. According to PFTAC director Vincente Loquellano, "we also have to recognise that many of the cooperatives set up in the past have since collapsed because of mismanagement."
Progressive development workers are now concentrating their efforts on helping farmers pool their equipment, and collaborate in quality control, technical development, marketing and strategic planning "We would prefer cooperatives. But if the peasants don't want, then we encourage them at least to collectivise these key services."
A fair price for peasant farmers is the cornerstone of the fair trade system. According to Loquellano, "in the capitalist sector, the price is usually determined by a middleman, who keeps most of the profits. At the last harvest the middlemen were paying 10-15 centavos per banana, and selling for 50-55. PFTAC paid the farmers 25 centavos, and sold at the market rate. We take 20 centavos to cover our own costs, which leaves five centavos per banana as surplus, in addition to the higher price we pay the farmers in the first place.
This surplus is reinvested into the popular movement. PFTAC encourages poor farmers groups to federate, and form alliances with peoples' organisations and labour groups. The group also educates farmers about how to use the extra cash they receive thanks to the alternative trade system.
Not surprisingly, more and more farmers are asking to join the PFTAC system. Over the last 15 years, the number of families involved has grown from 300 to over 10,000. State repression
Each expansion of the alternative trade network has provoked attacks from the Philippine government and plantation owners. As farmers became organised, they began to demand their civic and human rights, and land reform.
Landlords responded by sending thugs to intimidate peasants and rural organisers. But this repressive role was gradually assumed by the state, which has militarised the countryside, and branded PFTAC and similar groups as "communists". In many areas, police chiefs moonlight as plantation managers, giving them a personal interest in repressing the rural poor. Local market networks
PFTAC has been surprisingly successful in developing a local market for fair trade products. A number of consumer coops and teachers' associations are willing to pay a little extra for
PFTAC's yellow banana, rice and handicrafts. A part of production is also sold on the open market.
Vendors are recruited from popular organisations of the urban poor ("squatters"). Packaging and transport work is also outsourced to allied popular organisations, who sometimes reciprocate by purchasing PFTAC's rice and bananas. Urban poor groups, and organisers from this sector, are represented in PFTAC's board of directors.
But most Filipinos are too poor to support the alternative trade movement. The local banana market is flooded with the products of Del Monte's Mindanao plantations. They might be full of chemicals, but they are cheaper. And like in other countries, Filipinos prefer the standardised, blemish-free appearance of plantation bananas.
But Japan's huge network of consumer cooperatives is the biggest market for Philippine "fair traders" co-operatives have educated consumers about the benefits of organic produce, and the importance of a direct relationship between producer and consumer. This makes it possible to charge a price above the market level.
Since they • lack ISO quality certificates, Bohol's small farmers would in any case be unable to sell into most international markets. Globalisation as challenge...
The Nicaraguan and Salvadorian revolutions provoked multinational banana producers like Del Monte to develop huge plantations in the Philippines, as an alternative supply. Over 70% of Japan's bananas now come from the southern island of Mindanao.
Globalisation means increased competition on price and quality, even within the alternative trade network. Peasant organisations in Thailand have overtaken their Philippine counterparts on both counts.
Although most multinational banana production depends on chemical inputs, the multinationals are trying to develop "organic" varieties. They have the land, the technology, the capital and the economies of scale. According to Loquellano, "organic banana and rice production is no longer a protected niche for us. The multinationals already have lower production costs."
This illustrates the importance of diversification: one of the key ideas behind the growth of alternative trade networks in the 1980s. ...and as opportunity
According to Loquellano, "we should also see globalisation as an opportunity to strengthen solidarity between different countries. After all, there is growing awareness of our mutual vulnerability in the face of global capitalism.
"In the old days, our explanations of "imperialism' and global exploitation'
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* Philippines seemed abstract. But today it is easy for people to recognise that globalisation is essentially a process of consolidation among the biggest capitalists, at the expense of working people everywhere.
"Before, imperialism used military means to control the 'third world.' Today they use economic intervention like the World Trade Organisation and the Multilateral Agreement on Investments.
"So we need to improve the cooperation between smaller producers, and the link between producer and consumer. Alternative trade helps develop the consciousness of popular organisations in the south, and consumers in the north.
"We can't confront the capitalists directly. But strong people's movements can establish meaningful links that make a difference."
The problem is maintaining export levels in an increasingly competitive market, and persuading farmers that they must increase the quality of their products, even if this is more time-consuming.
"There is a limit to what we can do," explains Loquellano. "We only facilitate.