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Since placed as one of the main goals of the Millennium Development Goals (MDGs), poverty has been a highly prioritized issue in the international community and organizations. The first goal of the MDGs is related to poverty reduction, namely to reduce by half the proportion of people living on less than a dollar a day and to reduce by half the proportion of people who suffer from hunger by 2015. Today around 1.2 billion of the developing world's 4.8 billion people still live in extreme poverty on less than US$1 a day (UNDP, 2003). Out of them, some 720 million living in extreme poverty are found in the Asia Pacific Region (ADB, 2004). This means that the governments in the region have a huge task to reduce the number of poor people by some 36 million every year.
However, hitherto various efforts to reduce poverty, either at the international organization or regional levels, have not shown any significant impact as yet. In particular, trade liberalization, expected to provide a major contribution to poverty alleviation despite being the main agenda since 1994 has not led to any significant affects on poverty alleviation (Madeley, 2004; Ravallion, 2004). Some studies even found that trade liberalization has been biased to developed countries (Abbot, 2002). Agricultural subsidies in the rich world total US$ 300 billion; more than Africa's GDP and six times the amount of development aid to poor countries. In 2002, direct support to farmers of countries belonging to the Organization for Economic Co-operation and Development totaled around US$ 235 billion, three quarters of the total OECD support estimate of US$ 318 billion (World Bank, 2003).
Being less competitive in “conventional” biased markets, but with the possibility of taking advantage of poverty becoming one of the most important international issues, the poor may have some potential alternatives, namely, fair trade, geographical indications, and organic farming to escape from poverty. Although these three alternatives are not developed to specifically help the poor, given some supporting conditions, some poor farmers may be able to use these alternatives to rise up out of poverty.
Fair trade is an option that has the potential to help the poor. Fair trade helps exploited producers to escape from a vicious cycle and gives them a way to maintain their traditional lifestyles with dignity. This is because fair trade seeks to change unequal relationships between producers and consumers and to empower producers (Tallontire, 2001). To achieve this, fair trade includes some important principles of fairness, such as, (i) producers receive a fair price - a living wage or for commodities, a stable minimum price; (ii) buyers and producers trade under direct long-term relationships; (iii) producers have access to financial and technical assistance; and (iv) sustainable production techniques are encouraged. The Fair Trade system benefits over 800,000 farmers, mostly poor farmers in Africa and Latin America that are organized into cooperatives and unions in 48 countries (Anonymous, 2004).
Geographical indications (GIs), a form of intellectual property covered by trade-related aspects of the intellectual property rights (TRIPS) agreement, is another market system that can benefit the poor. A GI refers to the use of a region's name by producers from that area in order to protect their reputation or to safeguard the expectations of consumers that have come to associate certain qualities with a product's geographical origin. Under this protection, the poor can benefit from their specific location, production technology, and culture to preserve their product from unfair competition. For example, Jamaican Blue Mountain coffee received a premium of 14.50 dollars per kilo in comparison to benchmark prices of Columbian milds (WTO, 2004). Coffee in Kintamani, Bali, is now in the process of being the first GI product in Indonesia.
Organic farming is a farming system that is sustainable through practices that avoid or largely exclude the use of synthetically compounded fertilizers and pesticides and do not use genetically modified organisms or GMO's. In 2000 some experts saw organic markets, especially in developed countries, entering a boom period. Market analyst Prof. Hamm has forecasted annual growth rates of 20- 40 per cent. While the world's total organic market for 2000 was around US$ 16 billion, it increased to about US$ 19 billion in 2001. Multinational corporations such as McDonalds, Nestle, and Unilever have entered the organic market. However, recent trends seem to indicate that the organic markets were not as large as expected.
Still, the poor have the potential to make use of these three alternatives, but these will probably provide only limited opportunity to achieve the overall targets of the MDGs. How this potential can be realized in the real world will depend on various factors, mainly the availability of effective pro-poor policies, markets access, resources, and skills.
Written by Wayan R. Susila, Staff, UNESCAP-CAPSA, Bogor, Indonesia.
(References available upon request)
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