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1. Parreno, Earl (2013), Interview conducted by Jacqueline Hansen, Transcription 2. Padong, Gomer (2013), Interview conducted by Jacqueline Hansen, Transcription 3. More, Betty (2013), Interview conducted by Jacqueline Hansen, Transcription 4. Haagen, Anders (2013), Interview conducted by Jacqueline Hansen, Transcription 5. Social Entrepreneurship Bill (2013), Senate Bill no. 1026
6. 10 Fair Trade Principals, WFTO Asia
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Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 100! Appendix 1: Earl Parreno
Former!president!of!Alter!Trade!Corporation!!
Founding!member!of!PRESENT!Coalition!
2013!
Interview"by"Jacqueline"Hansen"
J:!Introduction!about!my!self!and!thesis!subject.!We!have!met!before!in!a!course!
at! Ateneo! and! have! common! connections! in! the! social! enterprise! academe! in!
Manila!
!
J:! I! would! like! to! talk! about! your! experience! with! Alter! trade! and! Fair! Trade!
internally! and! externally,! your! experience! with! Japan! as! a! solidarity! market.! I!
know!a!little!bit!about!Alter!Trade!from!Lisa!Dacanay’s!case.!Buy!maybe!a!short!
introduction?!
!
E:! Actually,! Alter! Trade! is! a! unique! case! because! we! started! not! with! the! local!
market!but!with!the!export!market.!So!unlike!other!companies!in!the!Philippines,!
social!enterprises!especially,!they!start!with!a!domestic!market!and!the!logistical!
needs!and!the!requirements!of!the!local!market!is!very!very!different!form!the!
export! market.! So,! the! barriers! of! quality,! quality! specifications,! and! market!
expectations! are! actually! very! different! and! certifications! are! just! guarantee!
systems! for! the! export! market.! The! local! certifying! bodies! here! is! not! actually!
recognized! internationally.! Its! is! not! recognized! yet,! it! is! still! in! the! process! of!
being!recognized!internationally,!but!as!of!the!moment!is!not,!so!if!you!want!to!
export!your!products!to!the!niche!market,!of!Europe!for!instance,!organic!niche!
market! or! the! fair! trade,! you! have! to! have! certifications! from! internationally!
recognized! bodies! such! as! ecocert! or! naturland,! which! complies! with! US!
standards,!and!Japanese!standards,!so!eh,!the!local!certifying!bodies!here!are!still!
in!the!process,!So!even!if!Betty!More’s!social!enterprise!is!certified!locally,!it!still!
could! not! automatically! be! accepted! in! Europe,! so! they! have! to! get! ecocert! or!
other!recognized!internationally.!!
!
Alter! Trade! is! being! expected! by! Netherland,! it! is! under! the! IMO,! is! the!
International! Marketing! Ecology..something,! it! is! based! in! Switzerland.! And! it!
inspects,! not! just! food! or! compliance! of! organic! specifications,! OrganicI Agricultural!specifications,!But!also!fair!trade!standards,!so,!we!actually!hit!two!
birds! with! one! stone.! Just! one! inspection! and! we! get! both! the! fair! trade!
certification!and!the!organicIagricultural!certification.!!
!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 101! J:!When!Alter!Trade!first!started!up,!and!Japan!was!the!solidarity!market,!can!you!
explain!a!little!bit!about!this!and!how!it!started?!
!
E:!Actually!it!was!Japan!who!proposed!a!“trade!not!aid”!track!towards!developing!
the! communities,! so! we! searched! for! a! product! that! is! symbolic! also! of! the!
peoples!struggle!in!Negros!(*Negros!is!famous!for!sugar!plantation!but!the!hay!
days! are! long! gone)! and! originally! we! came! up! with! that! Muscovado! sugar.!
Unfortunately!muscovado!is!not!so!much!consumed!in!the!Japanese!market.!So,!it!
has! limited! market! and! it! has! also! very! little! application,! during! that! time,! 25!
years! ago.! So,! a! year! or! two! after! we! searched! for! a! product! and! its! was! the!
balagong!banana,!so!the!balagong!banana,!you!know,!Japanese!is!a!banana!loving!
crazy!country,!so!they!get!most!of!the!bananas!from!Mindanao,!so,!that’s!how!it!
started.!We!shipped!out!first,!a!few!hundred!tons,!about!twoIthree!hundred!tons!
a!year,!and!it!picked!up!around!twoIthousand!tons!a!year.!!
!
J:!how!did!you!connect!your!suppliers?!You!worked!as!the!trader..!
!
E:!the!suppliers!for!the!banana?!We!are!the!only!banana!company!actually,!who!
goes!to!the!producers.!These!are!native!mountain!bananas,!we!have!to!go!there,!
near! their! area,! to! collect! the! bananas! and! at! first! we! where! met! with! stiff!
competition,!from!traditional!banana!buyers,!the!local!traders,!so!we!competed!
in!terms!of!price,!although!we!have!quality!standards,!its!much!stricter!compared!
to!the!local!buyers,!but!because!of!our!price,!they!up’ted!to!sell!to!us.!That’s!how!
it!went,!but!there!where!problems!of!course!we!encountered,!because!these!are!
jungle!bananas!and!the!supply!is!just!not!enough,!and!to!be!frank!about!it!and!to!
be! transparent! about! it,! because! of! overIharvest,! the! bananas,! the! banana!
supplies! fast! depleted,! and! the! area,! because! of! the! cultural! management,! how!
the! farmers! cultivated! their! banana,! it! was! prone! to! diseases,! and! there! where!
areas! in! Negros,! that! was! totally! devastated! by! the! “??””! disease,! a! banana!
disease,!so,!in!order!for!us!to!meet!the!demand,!we!expanded!to!other!areas,!we!
went!to!Northern!Philippines,!Cadilliera,!then!Mindanao,!just!to!look!for!supply.!
!
These!are!backyard!banana!farmers,!we!have!to!approach!them!per!household,!
initially! we! tried! to! organize! them,! then! thought! them! how! to! cultivate! the!
bananas! to! meet! the! standards,! give! them! proper! training! founded! by! the!
foundation,! but! there! is! always! a! conflict,! especially! if! it’s! a! day! to! day! trading!
operations,! there! is! always! a! conflict! between! capacity! building! of! the!
communities!and!the!demands!of!trade,!of!how!to!get!the!supply.!So,!for!several!
years,! actually! the! organizing! and! capability! building! activities! of! the!
communities!lacked!much!much!behind,!it!was!unlike!the!sugar!cane!community,!
because!sugar!cane!is!only!harvested,!eh,!its!an!annual!crop,!we!harvest!months!
after!planting,!so!there!is!always!enough!time,!to!develop!the!capability!not!just!
on!agriculture!technology,!but!also!on!organizational!matters,!to!really!bind!them!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 102! and!for!them!to!act!as!one,!so!that!they!have!more!power!to!negotiate!prices,!to!
negotiate!with!the!market.!So,!that’s!what!happened,!in!the!banana…eh,!the!only!
organization!that!lacked!behind,!so!the!capability!was!quite!low,!so!in!2009,!we!
actually! tried! to! remedy! the! situation,! by! putting! the! capability! building!
component! of! the! banana! trade! to! the! Alter! Trade! foundation,! because! then! it!
was! handled! by! the! same! trading! arms! as! Alter! trade! corporation,! eh,!
unfortunately,! it! did! not! really…??! And! in! 2010! I! actually! resigned,! so! I! don’t!
know! whats! happening! now,! but! I! know! its! still! with! the! trading! arm! and!
community!building.!
!
J:!You!where!there!from!the!beginning,!right?!
!
E:!not!really!the!beginning,!but!I!was!deeply!involved!starting!in!1999.!Just!a!few!
years!after!it!was!established.!!
!
J:!so,!the!conflict!bertween….!
!
E:!The!trade?!Between!the!business!side!and!community!capability?!
!
J:!it!sounds!like!that!there!are!challenges!with!fair!trade?!
!
E:!there!is!always!a!conflict.!Especially!if!the!business!is!growing,!!You!have!to!
choose.!Its!not!really!about!choosing,!there!will!always!be!tension!between!the!
two!major!components.!
!
J:!yes,!the!tension.!My!question!is!did!you!actually!see!the!social!impact!the!years!
you!worked!with!them?!I!know!fair!trade!is!a!minimum!price,!but!what!about!the!
whole!community?!
E:!well,!yes,!you!know,!if!we!look!at!sugar,!the!sugar!cane!communities,!it!really!
worked,!and!I!think!the!key!there!is,!developing!the!community,!empowering!the!
community! actually,! so! that,! they! them! selves! as! a! collective! force,! could!
negotiate! with! the! market,! and! could! independently! decide! for! their! own!
interest,! I! think! that! how! it! worked,! but! without! the! organization! and! without!
capacitating!them,!it!could!not!be!done,!and!that’s!what!happened!to!the!banana!
actually,!the!empowerment!was!quite!low,!the!level!of!empowerment!was!very!
very!low.!When!you!look!at!our!banana!communities!now,!I!mean!the!sugar!cane!
communities,!they!already!reached!that!level,!where!they!could!decide!on!their!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 103! own! investment,! and! that’s! multi! mio.! Peso! investment! on! behalf! of! the!
community,!but!you!can!not!find!it!yet!in!the!banana!areas.!!
!
J:! Can! you! help! me! point! out! why! the! challenges! has! been! different! from! the!
sugar!cane!and!the!banana!growers?!
!
E:!yes,!as!I!said,!the!banana!because!their!need!of!the!daily!work!for!the!business,!
the! capability! building! effort! lacked! behind,! so! it! was! lacking! behind! that! they!
could! not! even! organize! the! banana! communities,! so! they! where! dealing!
individually!with!these!people,!and!because!its!individual!these!individuals!just!
don’t! have! the! power! to! negotiate,! compared! to! a! people! in! compassing! a!
community,!in!terms!of!volume!the!company!will!just!be!dealing!with!how!many!
bunches! of! banana,! if! they! just! organize! themselves,! with! tons! and! tons! of!
banana! and! that’s! just! one! issue,! volume.! And! capability,! the! organizational!
capability! is! also! very! very! low.! There! is! no! conscience! amongst! them,! it’s! so!
much….!Before!I!resigned!we!tried!to!remedy!the!situation!but!it!was!not!really!
implemented.!I!don’t!know!what!happened!now.!
!
The!sugarcane!is!a!very!different!story,!the!organization!is!intact,!and!in!fact!they!
have!already!federated!into!the!Negros!organic!and!fair!trade!association.!
!
J:!did!the!sugar!cane!have!export!organization?!
!
E:!yes,!the!muscovado,!first!Japan,!eventually!the!European!market!became!the!
biggest! market! for! sugarcane,! especially! the! German! market! and! Switzerland,!
more!than!half!I!think!of!the!total!production,!about!2400!tons!goes!to!Europe.!!
!
J:!when!the!clients!order!sugar,!would!they!order!with!their!own!brand?!
!
E:!For!instance,!Alter!eco!France,!they!have!their!own!brand.!But!in!their!label!
they!would!usually!put!‘produced!in!Negros’,!Alter!Trade!Corporation!etc.!But!it!
is!an!Alter!trade!eco!brand.!Gepa!is!the!same,!Gepa!is!in!Germany,!the!fair!trade!
shops,! it’s! a! network! of! fair! trade! shops! in! Germany! ,! and! chocolate! brand!
Maureen?,! in! Switzerland,! they! produce! chocolate! with! Moscovado! sugar! and!
other!products!with!muscovado!and!they!put!in!their!label!that!the!muscovado!
that!they!put!in!is!fair!trade,!fairly!produced!in!the!Philippines,!in!Negros.!
!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 104! J:!Your!general!thoughts!about!fair!trade,!in!agriculture!in!the!Philippines,!what!is!
the! status! right! now?! What! do! you! think! about! the! fair! trade! situation?! Is! it!
working?!Is!it!growing?!Is!it!decreasing?!!
!
E:! Fair! trade,! I! think,! in! the! Philippines,! has! not! yet! reached! the,! it! has! not! yet!
reached!a!critical!mass!of!consumers,!for!it!to!become!really!a!significant!player!
in! the! market.! We! still! have! to! improve! in! organizing! the! consumers! for! fair!
trade.!So,!if!we!are!talking!about!fair!trade!consumption!in!the!Philippines,!there!
is!no!conscious!segment!yet!of!fair!trade!consumers!in!the!Philippines.!But!there!
are! fair! trade! producers! and! most! of! these! Fair! trade! producers,! are! eyeing!
markets!abroad.!In!Negros!for!instance,!late!last!year,!our!group,!I!have!a!group!
in! Negros,! im! still! with! Alter! Trade! foundation,! im! no! longer! with! Alter! Trade!
Corporation.! Alter! Trade! foundation! with! Social! Enterprise! and! empowerment!
for!rural!development!seed,!along!with!NOFTA,!initiated!a!Fair!trade!campaign!in!
Negros,!and!we!where!able!to!establish!a!big!fair!trade!federation!of!producers,!
its! called! Negros! Island! Fair! Trade! Federation,! it! is! composed! of! NOFTA! and!
another! big! farmers! organizations,! in! the! whole! province! of! Negros! Occidental!
and!we!are!expanding!to!Negros!Oriental,!that’s!another!province,!and!they!are!
quite!excited!about!it,!because!in!2015!there!will!be!a!! 0!tariff!on!sugar.!And!we!
are!expecting!the!foreign!sugar!to!flood!the!local!market,!Sugar!from!Australia,!
sugar!from!Brazil,!sugar!from!these!countries!are!produced!very!efficiently,!they!
could!produce!sugar!say!6!cents!a!pund,!where!we!produce!our!sugar!at!12!cents!
a!pound.!
!
J:!So!what!will!happen!then?!
!
E:!of!course!we!can!not!compete!with!them,!that’s!why!we!set!up!that!fair!trade!
federation,!so!that!these!sugar!producers,!could!compete!in!that!niche!market,!it!
some! sort! of! safety! net,! these! small! sugar! producers! will! be! targeting! the! Fair!
trade! niche! market! in! Europe,! Japan! and! Korea,! at! least! id! the! whole! sugar!
industry! will! be! affected,! we! could! still! have! the! safety! net! for! the! small! sugar!
producers,!that’s!how!important!for!us!in!Negros,!the!sugar!sector!is!the!biggest.!
We!produce!more!than!60%!of!the!sugar!in!the!Philippines.!So,!because!of!that!
niche!market,!we!believe!that!the!sugar!prices!in!the!1980’s,!it!could!caution,!it!
could!soften,!the!impact!on!0!tariff!on!sugar,!we!could!only!do!that!through!that!
fair!trade!market!and!Fiji!is!already!doing!it,!they!have!special!relation!with!the!
European!union!of!course,!because!the!where!former!colony!of!Britain!I!think,!so!
they! have! special! relations,! the! Eu! is! helping! them,! our! market,! we! are! still!
actually!searching!for!a!European!and!a!US!market,!for!this!Fair!trade!sugar,!so!
one!step!at!the!time,!we!federated!the!small!sugar!producers,!and!then!we!are!
now!at!the!stage!of!helping!them!establish!an!internal!control!system!so!that!they!
could! pass! the! Fair! trade! system! and! be! certified! Fair! trade,! by! international!
bodies.! That’s! where! we! are! now,! after! which! we! already! negotiated! the!
government! sugar! regulatory! they! SIA! (I! think,,),! they’ve! already! agreed,! ! that!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 105! they!will!issue!a!special!kedan,!that’s!Fair!trade,!so!that!they!could!identify!the!
sugar! produced! the! Fair! trade! way,! it! will! mixed! with! the! regular! sugar,! the!
certification! can! be! actually! given,! to! this! specific! sugar,! the! Fair! trade!
specification,!that’s!what!we!are!doing,!that’s!the!concrete!impact!of!the,..!and!the!
concrete!importance!of!Fair!trade!market!for!us.!
!
J.!you!said!you!are!still!searching!for!a!solidarity!market!for!the!Philippine!sugar!
in!Europe!or!US,!do!you!know!how!they!are!doing!with!that?!
!
E:!yes,!they!do!actually!have!buyers!here,!we!already!initially!discussed!this!with!
a!big!buyer,!from!England,!its!one!of!the!network!chains,!like!SM!malls!here,!but!
in! England,! but! they! specialize! in! Fair! trade,! so! they! have! a! counter!
representative!here,!so!we!have!already!talked!with!them.!!
J.!I!have!read!an!article,!that!despite!the!finance!crises!the!fair!trade!market!is!
increasing!in!Europe,!they!are!still!buying..!
!
I! wanted! to! ask! on! the! 0! tariff! on! sugar,! is! that! something! only! here! in! the!
Philippines?!
!
E:! It’s! the! world! trade! organization! that! is! imposing! that.! It! should! had! been!
imposed!in!2010,!in!that!last!round!of!the!Euro!X!talks,!but!the!Philippines!filled!
for! an! extension,! so! after! that! there! will! be! no! more! extension! on! the! tariff!
barrier,!everything!will!be!0.!!
III!
J:!in!the!case!of!M’am!Betty,!we!suggested!that!the!5!interested!buyers!from!the!
North!would!go!together!and!pay!up!her!Fair!trade!certificate!and!she!could!pay!
back!in!a!years!time!with!sugar…!
!
E:!Yes,!but!the!problem!with!that’s!is!that!it!an!annual!inspection.!In!Alter!Trade!
we!spent!around!1!mio.!Peso!on!inspections!alone.!
!
J:! How! would! you! advice! smallImedium! sized! enterprises?! How! can! the!
overcome! it?! How! many! organizations! are! there! like! Alter! Trade! to! support!
them?!
!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 106! E:!It’s!only!Alter!Trade!that’s!been!inspected,!consistently,!according!to!European!
standard,! and! now! we! are! helping! others! to! comply! with! the! standards.! Teach!
them! how! to! establish! their! own! internal! control! systems,! so! that! the!
productions! process! will! be! consistent! all! throughout,! so! they! have! internal!
inspections,! also! before! the! external! inspectors! arrive.! So,! that’s! how! we! teach!
them! to! do.! There! is! a! checklist! actually.! Actually,! the! most! difficult! part! is! the!
documentation.! You! have! to! document! everything,! and! a! small! farmers!
organization! with! a! very! low! level! literacy,! could! hardly! do! it.! So! it! takes!
organizations! such! as! Alter! Trade! foundation! to! help! them! do! it.! For! instance,!
they!have!to!have!minutes!of!their!meetings,!they!have!to!have!records!of!when!
they!planted,!when!they!took!out!the!weeds,!when!they!applied!organic!fertilizer,!
all! those! records! which! farmers! has! a! very! low! level! of! education,! could! not!
actually!comply,!so!we!have!to!teach!them.!I!think!Betty,!she!could,!but!it!would!
be!more!expensive!for!her,!is!she!is!the!only!one!inspected,!if!she!spread!the!cost,!
she! has! to! broaden! her! organization,! so! that! so! the! cost! per! capita! would!
decrease.!
!
J:!She!ahs!to!look!into!partnerships?!
!
E:!yes,!within!the!same!area.!
!
J:!we!talked!about!the!North!market!as!a!potential!and!the!Local!market!here!in!
the!Philippines.!Is!there!a!strategy!for!the!local!market?!
!
E:!A!local!Fair!trade!market?!
!
J:!yes,!I!only!know!of!small!initiatives,!that!Ateneo!has!their!SE!market,!there!are!
small! organic! markets! in! Manila! and! its! getting! a! little! bit! more! popular,! but!
that’s!more!on!organic!than!actually!fair!trade.!
!
E:!yes,!that!correct.!
J:!do!you!think!there!is!a!potential!for!that!to!move!forward?!To!help!the!farmers!
to! market! and! up! scaling! them?! To! have! a! market! here! instead! of! the! North?!
Maybe! it! would! be! easier! on! focusing! on! local! markets?! Maybe! having! social!
entrepreneurs!helping!them!along!to!brand!them!to!local!markets?!
!
E:!Yeah,!but!socially!conscious!consumers!and!socially!conscious!consumption!is!
actually!also!a!function!of!income,!if!you!only!have!a!few!families!who!have!the!
Thesis: “Agricultural Social enterprises in the Philippines” by Jacqueline Hansen 107! capability!to!pay!premium!to!a!socially!produced!product,!then!you!can!only!have!
a! very! limited! market! for! Fair! trade,! but! like! in! Europe,! or! more! or! less,! the!
income!level,!even!the!middle!class!is!quite!high.!Here!we!are!talking!about!the!
AMB,!the!AMB!actually!afford!the!Fair!trade!premium!on!the!products,!but!they!
are! not! a! large! market,! AMB! is! just! a! very! limited! market,! so! when! its! just! a!
limited!market,!the!absorption!of!these!fair!trade!products!could!not!be!absorbed!
by! the! limited! market.! There’s! a! dysfunction! actually! between! the! Fair! trade!
producers! and! the! fair! trade! consumers! in! The! Philippines.! This! is! a! personal!
estimate!but!maybe!its!1!to!20,!The!Fair!trade!producers!growing!20!folds,!the!
Fair!trade!consumers!is!growing!very!very!slowly,!so!how!could!you!match!the!
market,!the!demand!with!the!supply.!We!will!also!have!over!supply,!that’s!why!
we! look! at! the! export! market,! but! then! again,! if! you! export! your! fair! trade!
products,!it!should!be!environmentally!conscious!as!well,!it!should!be!produced!
in!consideration!to!the!environment.!But!how!much!carbon!footprint!will!there!
be!if!you!export!this!product,!that’s!a!lot!!That’s!why!for!me,!we!should!produce!
locally! and! consume! locally,! but! the! problem! again! is! matching! the! supply! and!
demand.!!
!
J:!My!Personal!experience!is!that!it!has!grown!a!little!bit!since!I!was!here!in!2009.!
Buy! local! is! becoming! more! popular.! But! I! realize! that’s! within! student! groups!
and!artist!groups!who!are!socially!conscious.!
!
E:!yes,!not!within!the!mainstream!market.!!
!
J:!So,!this!is!like!a!grassroots!stage?!
!
E:!Yes,!especially!the!production!side,!but!the!consumption!side!is!growing!very!
very!slowly.!And!how!to!hasen!and!broaden!the!development!of!this!consumer!
segment,!actually!we!have!been!contemplating!about!it!years,!years!ago.!!
!
J:!Seen!with!eyes!from!Denmark,!Fair!trade!is!a!trend,!but!its!also!a!label!of!good!
quality.!At!the!end!of!the!day!people!are!not!gonna!buy!something!just!because!
its!Fair!trade!but!because!its!good!quality!and!because!they!like!it.!
!
E:!yes,!of!course,!yes.!But!people!here!are!not!really!conscious!about!quality!and!
traceability!!
Especially!related!to!food,!because!most!consumers!would!hardly!survive!so!they!
would!buy!the!cheapest,!they!would!like!to!stretch!their!peso,!so!its!still!really!a!