Business

Head of fair-trade non-profit has great faith in marketing

After organizing a fair-trade coffee cooperative in Nicaragua, Paul Rice returned to the United States to push the movement. He now leads Fair Trade USA, which certifies products such as these.
After organizing a fair-trade coffee cooperative in Nicaragua, Paul Rice returned to the United States to push the movement. He now leads Fair Trade USA, which certifies products such as these. MCT

OAKLAND, Calif. — After years of living in the mountains of northern Nicaragua as an agricultural aid worker trying to make life better for the country's poor farmers, Paul Rice woke up and smelled the coffee — specifically, fair-trade coffee.

That was 12 years ago. Today, Rice heads Fair Trade USA, a non-profit based in Oakland, Calif., that is the country's leading certifier of fair-trade products. Such certification helps farmers living in countries with emerging economies receive a fair price for coffee, tea, chocolate, rice and other products they produce instead of selling at the lower market price to a middleman. Fair trade ensures that farmers are provided with a livable wage and premiums that help fund community projects such as schools and clean water systems.

Rice grew up in Texas, the son of a single mother who was a family therapist. A month after graduating from Yale University in 1983, he arrived in Nicaragua, determined to improve farmers' lives. He booked a one-way ticket, even though he did not have a job lined up. It was four years after the Sandinistas overthrew the Somoza regime.

Although his Spanish wasn't that good, it got much better after 1985, when he met the Nicaraguan social worker whom he would later marry.

A few weeks after arriving, Rice found work with a local organization whose mission was to help farmers improve their crop yields through the use of irrigation techniques and pesticides. That led to other jobs with similar groups during the next seven years. Rice said such groups had good intentions but created dependency on aid programs instead of self-reliance among the farmers.

Then he heard about the fair-trade certification movement in Europe.

"We were making a big mistake by ignoring the market, this whole issue of where farmers sell their harvest and what price they get. I'm not saying we should ignore production. I'm just saying it's a big mistake to ignore the market," said Rice, who organized small farmers into Nicaragua's first fair-trade coffee cooperative in 1990.

"I saw people rise out of poverty right in front of me. ... It made me believe that the market was the most powerful tool for change that we could hope to have."

After helping the Nicaraguan cooperative sell coffee to European fair-trade buyers for four years and seeing it grow from 24 members to 3,000, Rice figured it was time to bring the fair-trade model to the United States.

"I had to decide what I wanted to be. Did I want to be that cowboy living in the mountains of Nicaragua, organizing farmers? It was a great life; I was living my dream. ... Or was I going to be the guy who bought fair trade to America?"

He chose the second route and moved to Berkeley, Calif., where he obtained an MBA and worked with cooperatives before he was named to head Fair Trade USA in 1998.

The non-profit collects certification fees from companies that sell fair-trade products in grocery stores such as Whole Foods, Safeway, Costco and other retailers. Certification ensures that pricing, environmental and working condition standards established under fair-trade principles are being met. An independent third party conducts the farm visits while Fair Trade USA does a supply-chain audit.

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