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Fair Trade--'Are You Serious?' Case Study

Petra, our favorite volunteer!



Following the process, from artisans hard at work...

...to finished product!

My husband has a parable about his days as a consultant for Kaizen:


“What is the difference between involvement and commitment?” asks the earnest young consultant. “Ah”, says the wise old team leader, “did you have bacon and eggs for breakfast this morning? The chicken was involved, the pig was committed.”


We worked hard to get our membership from World Fair Trade Organization-Asia and beat the odds to do so. There are only 4 legitimately registered companies in Thailand, authorized to carry the Fair Trade logo on their products. We take seriously our commitment not to exploit the producers. Over the 7 years of our existence, we have driven down prices to normal wholesale levels. In some cases this meant taking 30% off the price of production. We’ve accomplished this without reducing the producers’ incomes or negotiating with them to bring their prices down.


This is not purely a philosophical position. As a business, we have the equal and opposite commitment of wanting to maximize profits. To reassure ourselves that we remain fair AND profitable we test our position occasionally so we can stand by the statements we make on our marketing material, to WFTO-Asia, to the producers and to the public.


The following blog is the report created by Petra Mackay, an Australian volunteer who visited us in October 2009. Unusually for a volunteer, she had some relevant understanding as she was studying ethnic communities in Southeast Asia at university. Importantly, she felt that she could live in an isolated village for 3-4 days without one word of the local language, which is much harder than it sounds.


We commissioned Petra to conduct a “time and motion” study to check whether we are in fact paying a fair amount for the work done. Since we had an observer in place, we asked her to comment on other questions. Have we just increased female workloads by bringing in the additional work, making them work longer hours in deteriorating conditions? Do the women have to hand the money over to the men thereby removing any discretion they might have about how it is spent?


Her report is fascinating. We attach it here in its entirety only removing the names for privacy. If anyone wants to commission work directly from the village, we are happy to make introductions and get out of the way. You will see from the report, that this particular village has good language skills and an understanding of the West.

Thai Craft Fair in Bangkok

Last weekend, Izara staff were able to visit Bangkok to sell at the monthly Thai Craft Fair on Sukhumvit Road.  Thai Craft has always given us excellent opportunities to get to know new customers, make friends, and increase our market in Bangkok. Check out pictures of our display and new packaging designs!

Izara Arts – World Fair Trade Organisation - Asia

Izara Arts' mission is to create non-exploitative village jobs for women and help develop skills through training and experience.

Business Philosophy
We design beautiful objects for sale at value-added prices. We are trying to increase the value of the products in the eyes of the buyer. Our products are deliberately complicated and we are customer-focused.

All products must have at least one hilltribe job involved (which could be finishing only) and some have up to 6. The distinction means that we can produce products for a 3rd party as long as there is one hilltribe job involved ie corporate events like Anantara elephant polo merchandising. Often we are not competitive for a job that wants the lowest cost. We must have a sympathetic buyer who understands a return in terms of public relations or karma.

Market
We look for discriminating buyers who know or can be convinced of the value of labour-intensive intricate work or who want truly unique products.

Sales Outlets

Local Sales 

• Office-based 
• Legend Boutique Hotel, Chiang Rai, Thailand 
• Doi Chaang Coffee Shop, Chiang Rai, Thailand 
• Fair Trade Shop, Chiang Rai, Thailand 
• Connect Café, Chiang Rai, Thailand 
• Shangri-la Hotel, Chiang Mai, Thailand 
• Tamarind Village, Chiang Mai, Thailand 

Thailand Sales

• Anantara Golden Triangle Resort and Spa 
• Anantara Phuket 
• King Power shops at Suvarnabhumi Airport 
• Thai Craft Fairs, Bangkok, Thailand 

Internet Sales 

• Visit our web site

International Sales

• Glenbow Museum, Calgary Canada 
• Vancouver Art Gallery, Vancouver, Canada 
• Museum of Anthropology, Vancouver, Canada 
• Textile Museum of Canada, Toronto, Canada 
• Autism Plus, York, UK 
• World of Good, California, USA 
• Gifts for a Better World, Oregon, USA 
• Fresh Green Bag Company, Sydney Australia 
• Courtney's Boutique, Vancouver, Canada

Fundraisers

• Christ’s Hospital, Horsham, UK 
• Angkor Hospital for Children’s New York Gala, New York, USA 
• Advocacy for Immigrant Families, Seattle, USA 

Customized/Corporate Orders

• ThaiCraft, Bangkok, Thailand 
• United Nations Refugee Agency (UNHCR), Bangkok, Thailand 
• Angkor Hospital for Children, Siem Riep, Cambodia 
• Plant-a-Tree-Today Foundation, Bangkok, Thailand 
• Anantara King’s Elephant Polo, Golden Triangle, Thailand 

Izara Arts Background and Philosophy

After retiring from business careers in the UK and Canada, Patricia Solar and Paul Hancock created the Khom Loy Development Foundation a non-religious organisation working with indigenous people of Northern Thailand. We decided to use our own funds to support pilot projects designed to help hill tribe people get to grips with the modern money economy which is edging its way into their lives. Eventually, we settled on agriculture (food sustainability), education (preparing children for learning to stop the cycle of limited and poor education) and handicraft (income generation and job creation).

As the education and agriculture projects prove themselves, we look for additional funding but we decided that as a handicrafts business, Izara Arts had to stand alone as a viable business. We sell hill tribe products for a profit which is re-invested into the project and producers but we are a business first. Our focus must always be commercial because this is the way to maximize income for the producers in the long term. Running a charitable operation will increase dependency and does not build the women’s skills and confidence. In addition, projects dependent on charitable support can never grow as fast as those which are financially self-sustainable.

Beginnings
Our first effort was to sell what the women produced. This was a losing strategy because if the products had been desirable, they would already be selling. We learned that the techniques were the main selling feature but the designs were too “ethnic” and would never capture much of the market. So we brought in a designer to create some great modern patterns.

We then found that it took increasing numbers of trainers, supervisors and quality controllers to stabilise the output so there was still something not right. The women know how to produce. What they need from us is a link to the Western tastes and markets. We returned to developing our handicraft products as vehicles for their traditional techniques and patterns. We move the women back to old styles where the stitch work is smaller and more intricate than the casual tourist is willing to pay for, the techniques now only seen on formal personal outfits on special occasions.

Method

We take this undeniably beautiful, intricate work and use it with products that showcase it. We try to catch trends (like the yoga mat bag and the permanent shopping bags). We try to stay practical and relevant (eyemasks and baby products currently in production). We keep prices reasonable so the products move quickly and the women keep working. We put many different techniques onto each product so we maximize the number of jobs in each piece and make copying of our designs – always a problem in the handicraft world – more difficult. We introduce new products all the time because getting through the noise of the marketplace and connecting with a customer is the hardest part of the selling process. Once they know us and our quality, we keep giving them beautiful things to buy.
Philosophy

Thailand borders Laos, Cambodia, Vietnam, and Myanmar. In comparison to these countries, it is a developed nation and in fact is no longer on the underdeveloped nation list. In 1974, Khun Meechai began his condom promotion scheme. The birth rate dropped to 1-2 children per family from the previous 8+ at the same time as healthcare improved and child mortality dropped. These results have not extended to hilltribe villages.

Every developed country on earth has a falling birth rate while every underdeveloped nation has large families. When resources are finite (and when aren’t they?), no one can prosper when the pie keeps being divided into smaller and smaller pieces. Inevitability, when their children’s survival prospects improve, women choose smaller families. In addition, if the women can earn at home, they stay with their children instead of migrating to cities where their prospects are poor.

There is a link between female empowerment and economic development. Micro-credit schemes loan almost exclusively to women because they have a better understanding of money as an investment in the future. All women in our producer groups say that they want extra money to educate their children.

It is repeatedly proven in the developing world that women are the important change agents. Even in the developed world, small businesses are the real engine of jobs creation, not the big multi-nationals and small business startups are usually female. Viable businesses in the villages mean better lives for the villagers.