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A world first – Fair trade cashews for biodiversity conservation

Tony Whitten's picture

Much is written about the effectiveness of encouraging alternative livelihoods in conservation. One argument runs that if you can find an alternative income for someone who currently exploits a natural resource unsustainably or illegally, then the exploitation will cease and biodiversity will be conserved.  The counter argument is that the alternative is actually used as a supplementary income, making it possible for the miscreant to buy a bigger chainsaw or truck for larger scale resource exploitation. Clearly some sort of alternative is needed, but how can it be used unequivocally for conservation?

These were the problems facing one of my projects focusing on the conservation of the Lambusango forest block, at the southern end of Buton, an island to the southeast of SE Sulawesi in the middle of Indonesia. This forest is home to many of Sulawesi’s many endemic species, especially the small but belligerent wild buffalo or Anoa.

The respected, charismatic and eloquent La Ode Abdul Syukur, a former parliamentarian, chairs the community Forest Forum.
See the slideshow.
This innovative project is executed by Operation Wallacea, the business end of which specializes in research tourism for undergraduates. Key to the project’s successes is the active Community Forest Forum it helped to set up with popular local notables, and which was then formally established by a local government decree.  The Forum is chaired by a charismatic former parliamentarian, La Ode Abdul Syukur, a sartorially-elegant man who sports jackets made from Butonese striped cloth. He is widely respected, is passionate about conservation and community needs, and speaks very eloquently.

One part of the project has been developing local businesses, especially in villages which have a history of (illegal) forest exploitation (see the slideshow for more details on these businesses). These businesses include the cultivation of oranges, coffee, ginger, seaweed, pearls, and cashews. The village of Matanauwe has just passed a significant milestone in having finally met all the criteria and is now licensed as a producer of Fairtrade cashews – the first in the world. Their exporter in Surabaya, Java, has also just received certification as a Fairtrade trader. The label guarantees consumers that strict economic, social and environmental criteria were met in the production and trade of an agricultural product.

In addition to having the Fairtrade label, the cashews and other products originating from the project will be able to carry the new Wildlife Conservation Product (WCP) label, itself the idea of Operation Wallacea.  The first such product will be a coffee blend made from beans grown in a similar Operation Wallacea project in Honduras and beans from Buton.

The village of Matanauwe is now licensed as a producer of Fairtrade cashews– the first in the world. Two workers shell cashews before drying them.
Our project has provided village groups with the means to get their businesses started, advice, and help in finding appropriate markets. Although not an initial condition, any continued support is contingent on the village or community group involved to pass a series of regulations governing the use of the adjacent forests.

The promises are, to a cynical, experienced eye, cheap and will mean nothing unless they are enforced and if sanctions are taken against offenders. In the case of Matanauwe, the agreed sanctions include: ‘If person(s) who violate the commitment repeat the action, they will be sentenced by all village community members. The violators will have to wear clothes of leaves with full red ants, then brought out to walk around the village and to shout loudly “I am a forest destroyer, I am a forest destroyer”’.

But more significant is the sanction against the village government:  ‘If the village government is unable to stop forest crimes perpetrated by its villagers or by outsiders, the village will not receive any business funding assistance either from the Operation Wallacea or from Government’.

Rattan exploitation has been exceeding sustainable limits in the Lambusango forests. The project is working with farmers' groups to plant thousands of rattan seedlings in community forests.
See the slideshow.
The first 1.5 tons of Matanauwe cashews are now on their way to the UK, where their initial market will be hard-working British students who are the largest consumers of beer in the country (after the military) and like to nibble something ethically impeccable while drinking (and studying).

Already communities around the Lambusango forests have foresworn their previous illegal forest activities because they prefer the farming and other work opened up by the project. And the District Head has gone on public record as saying that he will fire any Sub-District Head in whose area any encroachment into state forest land occurs.

Will this be the answer to the threats facing the Lambusango forests?  It’s hard to tell, but I currently feel optimistic and hope we will be able to return to the area a few years after the project closes (at the end of this year) to discover whether and to what extent the opportunities provided to villagers have remained relevant in the longer term, and to apply any lessons to our other projects. 

Comments

Submitted by Bryony on
Congratulations on getting the fair trade certification! I know how much hard work has gone into that. On the link with biodiversity conservation, I'm afraid I'm going to remain a bit cynical about this scheme until I know there's an independent third-party involved in certifying and monitoring any Wildlife Conservation Product label, that has the ability to impose sanctions and remove this label. Not the NGO that facilitated it, not the Forum, not anyone involved in trading... I know that development of a certification scheme is going to take a long time, and there has to be a certain volume before a third party certifier can be supported in this way, but I think this has to be where it is headed if the label is to have lasting credibility. What comparisons have been made of the proposed WCP scheme with other certification schemes, e.g. organic and fair trade? In terms of accountability, cross-checks, and individual and collective responsibility. I think this should be part of the evaluation of this project, and the lessons learned should be fed into the IFC's biodiversity program and other institutions working on biodiversity business. However, having said all that, of course I'll still buy the cashews! The most delicious around, congratulations Matanauwe!

You can find more information on the nascent WCP scheme on the lower half of www.wallaceatrust.org/Pages/indonesia_lambusango.shtml which gives a bit more information on how it should work. At Lambusango at least, I would hope that there will be continuous assessment and enquiry about the WCP (and Fairtrade) schemes by virtue of the fact that hundreds of undergraduates go their each year to conduct research and this will prove an interesting area of research for years to come.

Submitted by Bryony on
Yes, the high level of scrutiny from the research being carried out there certainly gives reassurance in this case. I like the idea of idealistic undergraduates checking up on what has happened! I think my comments are more related to how a scheme like this can grow, especially in other areas where this degree of oversight cannot be possible. Hope I'll be able to see it grow - and will look out for the cashews on sale this autumn.

Submitted by Dr Tim Coles on
I agree with Bryony that we should indeed be sceptical about any ethical pricing scheme and that auditing is needed to verify any claims made. There are 3 main points to note though: 1. Although there are third party audits in position for Fair Trade and Rainforest Alliance schemes, remember these audits are aimed at checking the effectiveness of the producers co-operatives only in terms of how the money is distributed and in the case of Rainforest Alliance, environmental factors relating to crop production. Neither scheme conducts an audit of how effectively the whole community within which the producers co-operative is based (producers co-operatives are only a subset of the whole community generally not exceeding 10% of the total community) are performing in terms of illegal logging, hunting or forest encroachment. Indeed this whole business started because a coffee producers co-operative at the Operation Wallacea Honduras site which does have regular audits for their Rainforest Alliance coffee are nested within the worst village for illegal hunting, illegal plantations and logging in the Cusuco National Park!! 2. Many of the key parts to audit for the Wildlife Conservation Products scheme are different to what would be audited by Fair Trade or Rainforest Alliance and are much more related to conservation management such as: a) is the community in an area impacted by a protected conservation area (eg a buffer zone village in Lambusango)? b) has a co-operative with 90%+ membership of the village been formed? c) has the village co-operative agreed a conservation contract committing them to no logging, hunting or encroachment? d) have there been checks in the forest to ensure that any illegal loggers, plantations or hunters encountered do not come from the contracted villages? e) have the products been bought by the village co-operative from the village f) farmers at normal market rates and then sold to the exporter by the co-operative at Fair Trade or higher prices? g) is there transparency on how the village co-operative has invested the money for the community's benefit? Note in the only two current sources of Wildlife Conservation Products (Cusuco and Lambusango forests) there are university Honours and Masters students completing dissertations each year on exactly these questions. In addition there is the World Bank/GEF team still patrolling for illegal activity. In these two cases it is relatively easy to verify the claims made for the Wildlife Conservation Products scheme but a formal audit scheme which would need to be financed by a levy on the products as for the other ethical schemes would need to be established when the system has proved itself in these two locations. 3. I originally thought the Fair Trade scheme was aimed at providing a guaranteed price for the farmers but it appears that their prices are set as FOB (Free on Board). For example the Fair Trade price for green coffee beans FOB is $1-26/lb. This is not the price paid to the farmer for de-husked beans but the price that includes the machining of the beans to remove undersize or poor quality beans and transfer of the beans with tax paid onto the ship. In Honduras where we pay the $1-26 to the co-operative the final price FOB is $2-16 or a 71% increase. If this same figure is applied to the Fair Trade FOB price it would reduce the farm gate price to $0.71/lb! Setting the Fair Trade price at an FOB rate allows the coffee exporters to significantly influence the price actually paid to the farmer. The Wildlife Conservation Product scheme provides the Fair Trade FOB price directly to the co-operative.

Submitted by Ron Bell on
Dear Sir, I am interested on the process on fair trade in regards to cashews nuts. I am currently organising cashews projects around the coast line of PNG.The areas in which I am setting up these projects are environmentally sensitive. I am hoping to encourage the people in these areas to be more proactive in environment issues and if I a can arrange fair trade this will encourage the local people to participate. Ron Bell

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