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Global Grassroots Entrepreneur Trading Network Workshop, The World Bank, Washington, DC USA

SERRV International Case Study June 26, 2002

SERRV International

SUPPORTING COMMUNITY-BASED ENTERPRISES THROUGH AN INTEGRATED PROGRAM OF ALTERNATIVE TRADE AND CAPACITY-BUILDING SERRV and Alternative Trade - An Overview Introduction: SERRV International is a nonprofit alternative trade and development organization that has been working hand-in-hand with grassroots producer groups in 30 countries in Africa, Latin America and Asia for the past 50 years. In the past ten years, SERRV has sold $50 million worth of products from grassroots producer groups, returning $20 million in direct payments. The ultimate beneficiaries are tens of thousands of people in developing regions of the world who sustain themselves by producing and selling traditional handcrafts, coffee, cocoa and other sustainable products. Working through community-based organizations in their own countries, handcraft producers and small farmers market their products through SERRV’s well established “alternative trade” network in the USA. This alternative trade system allows cooperatives and other community-based enterprises to gain a foothold in the US marketplace, generating millions of dollars of earned income each year. This process also provides these small-scale producers with “real world” experience in international trade. Values-Driving Trading: Like the other 150 organizations who are members of the global International Federation for Alternative Trade (www.ifat.org) - - as well as the US-based Fair Trade Federation (www.fairtradefederation.com) - - SERRV’s trading activities are firmly rooted in the following core values:

1. Commitment to Fair Trade (prices for producers) 2. Transparency in business relationships 3. Commitment to ethical business practice 4. Ensuring safe working conditions 5. Providing equal employment opportunities for women 6. Promoting social progress 7. Working to protect the environment 8. Respect for the cultural identity of all people 9. Educating consumers & advocating about Fair Trade How Does SERRV Work? (1) SERRV works exclusively with community-based groups (“producer-partner organizations”) who represent low-income people who would otherwise have few employment opportunities. (2) Producer organizations, mostly local NGOs and cooperatives, train women and men to make quality, traditional crafts and food products; and (3) SERRV imports and then markets these products on their behalf in the USA - - $6 million in 2001 - - through a well-established nationwide network that



includes thousands of socially-concerned individuals, churches, community-organizations along with fair-trade shops, catalogs and a web site. (4) SERRV also provides interest-free advance credit ($750,000-$1 million each year) to producer groups. (5) Beginning in 2002, SERRV is implementing a more comprehensive capacity-building services to strengthen “producer-partner organizations” so they compete more effectively in the global marketplace. Product Focus: Most of SERRV’s 1,500 different products fall in the broad categories of Gifts and Housewares, with a strong Christmas/Holiday decorative collection in our Fall catalog. About 75% of our sales occur from September to December. We also market some fairly-traded food products (coffee, brazil nuts, and chocolate). Geographic Focus: Most SERRV producer-partners are located in Africa, Asia and Latin America, but several are also in the USA and other regions. We do not have geographic limits for participation.



The Challenge of the Global Marketplace The global economy is providing both opportunities and significant challenges to community-based enterprises. At SERRV, we see the following long-term trends: • Thousands of community-based organizations across the world are experimenting with small enterprise development in the hope of creating a sustainable source of income for impoverished people in their community. These groups are producing everything from baskets to cocoa. This trend, aided to some degree by international development organizations, is contributing to an overabundance of handcrafted products and commodities like coffee and cocoa. • Simply making these products does not solve a problem unless producers can also access domestic and/or international markets and sell their goods at a fair price. Unfortunately, most small-scale producer groups are not prepared to deal with the harsh requirements for commercial trading. Typically these groups cannot find buyers at all or, if they do, the terms are not in their favor. They also struggle to find adequate working capital (at reasonable interest rates if at all) to finance their inventory and pay producers during the long production/export period. • As a result, a relatively small number of alternative trade organizations like SERRV are flooded with hundreds of requests from groups each year seeking help marketing their products in the USA and Europe. • One solution is to expand the size of the alternative trade market, which is happening to some degree in the USA. However, this nice market is not nearly large enough to handle all of the available production capacity. Another longer-term solution is to build enough capacity within some producer organizations so they will be able to successfully operate in commercial markets. This cannot be a “quick-fix” - - this must be seen as a part of a long-term process and will require a significant investment of resources and ongoing support throughout this transition. Capacity-Building Program and Services "The level of need in Bagru and Sanganer is great. As such, the artisans over there are able to do just traditional things and while some of the customers like the traditional and ethnic, the offtake is not as much as they would have hoped it would have been. They need new designs in contemporary colours and schemes....." -Lucas Caldeira, from Asha Handicrafts, an Indian NGO and SERRV partner



Beginning in 2002, SERRV is broadening its strategic focus to work on an integrated program: income generation through alternative trade marketing of fairly-traded handcrafts and food products; building capacity of our community-based producer-partner organizations through training, information, technical assistance; and facilitating direct market access for producer organizations when they are ready to take this step. SERRV ‘s Expanded Goals: (1) Increasing our impact on poverty by working with our producer-partners to develop and implement a cohesive strategy that will give more people the opportunity to gain skills and self sufficiency through alternative trade and other means; (2) Giving long-term (but not indefinite) support to community-based groups working with economically-marginalized people in their community; (3) Facilitating access to global markets and reducing dependencies by building capacity and creating other market opportunities for more advanced Producer-Partner organizations; (4) Serving as an incubator for creative new organizations by creating marketing opportunities and providing training and support. Capacity-Building Pilot Program: We are implementing the following pilot program with at least six existing SERRV partner organizations in three countries beginning in 2002: Phase I: Needs Assessment: As mentioned above, SERRV staff has already started conducting in-depth interviews and consultations with our current producer-partner organizations around the globe. The purpose of these visits is to: (1) have frank discussions about their long-term developmental goals; and (2) identify six groups who are ready and able to engage in a more intensive developmental program with SERRV over the next few years. Part of the needs assessment process will include placing each of our current, approved community-based partner organizations into one of the following categories: Group A. Training, Development and Market Transition Group: Capacity-building over 5-10 years with training, product design, market information and ultimately access to other markets. Group B: Long-Term Support Group: Ongoing alternative trade marketing support for these local training and development organizations who work with a changing local population. Emerging Groups: Focus: marketing support and other services for promising, emerging community-based producer organizations. Phase II: Development Plan: The next step is to work through a planning process with each of these six pilot groups that will result in a written, mutual development plan. These plans will outline measurable development goals, timelines and the resources each group needs to acquire the training, skills, experience and material resources it needs to



become economically self-sufficient. The plan will detail the key services that SERRV will provide and obligation each partner organization will fulfill. Phase III: Key Services: Integrated Capacity-Building Program The integrated package of services SERRV will offer to producer-partner will be based on the written development plan: 1) Direct Sale of Products through Existing Alternative Trade Channels 2) Product Design and Development 3) Market Information (market trend reports, market research, etc.) 4) Market Expansion/Trade Facilitation (facilitate access to buyers, trade shows, other support organizations, etc.) 5) Technical Assistance (quality control, costing, pricing, packaging, shipping, export issues, etc.) 6) Communication & Technology Assistance 7) Financial Assistance (access to grants and loans to achieve planned development goals) 8) Management and Organizational Development (facilitate access to appropriate management and organizational development training and consulting)

PEOPLink Case Study June 26, 2002

“Success” Stories Below are just a few examples of community-based enterprises that have reached various levels of success in finding a niche for their products with support from SERRV and other ATOs. Kuapa Kokoo (Ghana): Kuapa Kokoo, is a cooperative of 30,000 cocoa growers from Ghana. Through an innovative new approach to fair trade, this cooperative owns one-third of a new UK-based chocolate company, the Day Chocolate Company, which sells chocolate products made from Kuapa beans in the UK (and USA through SERRV). The cooperative received a guaranteed minimum price for their beans ($1,600 + $150 fair trade premium) - which is above current market levels - and will participate in profit-sharing. Kuapa has been using the fair trade premium to build clean drinking water wells in cocoa-growing villages (53 last year) and fund a school for the children of cocoa farmers. Through this new model, small-scale cocoa farmers in Ghana now have both a voice and a stake in the global chocolate market.

YWCA of Dhaka (Bangladesh): The YWCA of Dhaka Craft Centre was started in 1973 to provide training in sewing and embroidery for women, many of whom had been abandoned or abused by their husbands. Besides contributing to the family income, the 250 women who participate in the project learn to read and write, receive subsidized snacks and health care, contribute to a 10% compulsory savings program, are eligible for interest-free loans, and have access to free legal services. Over the past 4-5 years, SERRV has increased support to the YWCA by sending a top-notch product design consultant to work with YWCA staff on new design concepts. The result is the development of popular, hand embroidered Christmas-oriented products (runners, wall hangings, tree skirts) made out of a traditional jute fiber. The new YWCA products have sold fairly well in SERRV’s Christmas catalog in recent years (previously their products did not well sell at all) and other ATOs in Europe have picked up on the new designs. Also, they have a new sense of pride, having “come from behind to be respected by their peers.” Union Progresista Artesanal (Mexico): The Union Progreso Artesanal (UPA) was founded in 1986 by twenty-six artisans who made a commitment to the principles of cooperative action and set the following goals: (1) to raise family incomes by producing and marketing their products collectively; (2) to promote community development projects; and (3) to share the principles of cooperation and self-improvement. As a result, UPA has become a leading producer of jewelry for SERRV, along with providing health care to its members, and organizing efforts to clean up its

PEOPLink Case Study June 26, 2002

village with ongoing garbage collection. SERRV product design assistance has helped UPA expand its range of silver jewelry and sales have grown steadily over recent years. Prepared by: Brian Backe Director of Resource Development SERRV International, Inc. P.O. Box 365, 500 Main Street New Windsor, MD 21776-0365 USA Phone: 410-635-8762 Fax: 410-636-8774 Mobile: 410-596-1827 Email: [email protected] Internet: http://www.serrv.org/ Contact for Potential Producers: Cheryl Musch Producer Relations Manager SERRV International, Inc. New Windsor, MD 21776-0365 USA Email: [email protected]

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