Fair-trade and Transport

Fair-trade and transportation go hand in hand and after researching Fairtrade for another subject this quarter I find it hard to think Fairtrade is really "fair."

Fair-trade is policy or agreement in which poor or developing countries receive a “fair” price for their goods and/or services. (There is currently no “official” definition)

What it does though is hinder the growth of the local transport companies. now companies like Starbucks or Lipton go into the country and provide their own transportation to ensure the farmer received their "fair" price.

I do think we need to ensure that a fair price is paid to the farmer but we also have to stimulate growth in the industries that would have supported that farmer.

The Buckminster Fuller Challenge

The Buckminster Fuller Challenge

Each year a distinguished jury will award a $100,000 prize to support the development and implementation of a strategy that has significant potential to solve humanity’s most pressing problems.

Check out a couple of these ideas:

The Barefoot College
http://challenge.bfi.org/application_summary/237

Cycle for Health
http://challenge.bfi.org/application_summary/418

How One Woman Has Improved the Quality of Her Coffee and Her Life

In this video, the Gates Foundation introduces us to Athanasie Musabyimana, a Rwandan woman who has overcome extraordinary obstacles. Check out the video.

Gates Foundation Video

SCMS and how they are helping with antiretroviral therapy

Funded by the President’s Emergency Plan for AIDS Relief (PEPFAR), SCMS brings together 13 private sector, nongovernmental and faith-based organizations that are among the most trusted names in supply chain management and international public health and development.

Check out SCMS's website

Analyzation of using the supply chain for Medice and Agriculture

I worked on this over the summer as I explored the different transport models in Africa.

Objective: evaluate the potential for vaccines (and medical supplies) and agricultural products to share the same supply chain.

Issues to Be Explored

Evaluate the status quo:

· In a given area, map out how agriculture and related goods, such as seed, fertilizer, tools, move between farmers and markets or ultimate buyers.

o What normally moves between farms and markets (both directions)?

o What are the cost, quality, time, and information / reporting requirements of moving these goods?

o What comprise the segments and functions of the supply chain?

o Where are the information asymmetries in the supply chain and markets?

o Who captures what value in the supply chain?

§ Farmers

§ Traders

§ Pure transporters

§ Large buyers and exporters

o Where are the inefficiencies or gaps in the supply chain?

· In the same area, identify rural health centers and map out how they are supplied with vaccines and other medical supplies.

o What is the mix of public health centers and NGO or FBO health centers?

o What medical commodities move between national and regional stores and rural health centers?

o What are the cost, quality, time, and information / reporting requirements for these medical commodities?

o For each, are there defined processes, whether push or pull, for supplying rural health centers or is the system ad hoc and opportunistic?

o Where are the inefficiencies or gaps in the supply chain?

· Identify and evaluate the options for moving vaccines and other medical supplies

o Identify and analyze the challenges facing consolidation of medical supplies and agricultural goods.

o Evaluate the potential role and development of community-based LTL (less than truck load) entrepreneurs based on the SABMiller distribution model.

o Evaluate the potential of using VillageReach’s MIS system of vaccine delivery verification for fair trade authentication.

Comparison of Transport in USA vs Africa

Video on transport around the world

Have you ever wondered what transportation and logistics is like around the world? Please check out this video I made looking at transport around the world.

http://www.youtube.com/watch?v=x--Gt8FU2CM

Please check out ColaLife and the work they are doing by trying to leverage Coke's transport system in Africa to deliver medicine.

ColaLife is a campaign to get Coca-Cola to open up its distribution channels in developing countries to save lives, especially children’s lives, by carrying much needed ’social products’ such as oral rehydration salts and high-dose vitamin A tablets. For the latest on the campaign. ColaLife is an independent and purely voluntary movement backed by thousands of supporters on its Facebook Group. www.colalife.org

Here is a great video on what they are trying to do.

http://www.youtube.com/watch?v=wK0jWIF6O8s

The Logistics of Fair Trade

Here is a great article on the logistics of fair trade.

http://www.transfairusa.org/pdfs/wrk_croptocup.pdf

The four different models of transport in Africa

Here is a research project that I completed during my internship this summer. It details the different models of transport currently being utilized in Sub-Saharan Africa.

A Brief Description of Transportation Models in Sub-Saharan Africa

After an analysis of the transportation system in sub-Saharan Africa I found that there are an average of four different models being utilized. The models may differ in each county but in general the components to each model seem to be similar. Furthermore, the models are generically defined and one or more of the models may share similar attributes with other models.

Corporate Model: (ADM, Cargill)

Multi-national agriculture companies looking to transport goods out of a developing country purchase assets in this model. The model is one where the corporation enters the country and purchases or leases its own farms and/or transportation system. The control of these assets through the entire system flow allows the multi-national full control of entire process, thus becoming more efficient.

Corporate - Non-Asset Based Model (Starbucks, Hersey)

Multi-national product companies looking to transport a specific commodity out of the country may establish this model. In this model the transportation system is not owned by the multi-national, instead a contract is negotiated with the exporter and farmer to ensure that is fair trade. The transportation system is leveraged to meet the needs of the multi-national. The system is less efficient but allows for community and economic development with-in country. It may be challenging to follow the flow of goods and money through this process flow.

Commercial and COOP Model

Local farmers leverage a combination of their resources to allow for better purchasing power and selling power in this model. With the combination of their resources the farming coop has the ability pay less per transport move to move their goods to the capital. The farmers must still negotiate with the transport driver but have more leverage due to the combined resources of the coop. The system is somewhat efficient but still leaves the farmers at the mercy of the transport companies. The farming coop aspires to purchase own transport vehicle in the future in this model.

Trader Based Model

A local famer is at the mercy of the exporter and the transport system in this model. This system flow is in reverse of the previous models. The exporter is contacted by a multi-national and signs a contract for $X to secure Y Kg of a commodity. The exporter then requisitions a trader to go out and start acquiring the commodity. The trader from the city contracts with smaller traders in a district for the commodity. The district trader then may contract with rural traders to acquire the commodity. Money changes hands through each step of the process. The rural trader goes in search of a rural famer growing the commodity and offers $X to take the load to the city. The farmer does not have an option to negotiate the price since he does not know when another truck may be coming. The risk to the farmer is loosing his entire crop if he cannot get it to the market.

Life at the Last Mile

Here is a great video that shows life at the last mile in Mozambique.

http://villagereach.net/photos-videos/video-gallery/

Introduction

Summer Intership

I had an internship this summer at a company called VillageReach here in Seattle, Wa. The company specializes in last mile delivery of health care vaccines to rural health clinics in Northern Mozambique. They have also set up a LP Gas system that keeps the vaccines at the right temperatures and they have found a market to sell the gas to residential customers which is improving the air quality (they were burning charcoal previously). By selling the LP Gas to residential customers the company has reduced the countries upper respiratory problems and created a social business

I was brought on to look at developing a transportation system that can provide consistent reliable delivery of health care products to rural areas. There is an obvious problem that has been documented in most world reports with the inconsistency of the deliveries of vaccines. Currently the big logistics companies provide the one time delivery of the product to a regional distribution center or provincial capital though the costs are higher then most NGO's (Non-profits) can afford.

We wanted to create a transportation system or possible partner with a large company to provide jobs to local people to do these delivery's and look at ways for them to take ownership of the program in the future.

So of the areas I looked into were:

How are vaccines currently being delivered to rural Africa?

What are the challenges of delivering health care to rural Africa?

Why are the vaccines not being delivered on a consistent basis?

Is there a need to provide this service?

After 4-5 months of research we found that transport is one of the number one problems in Africa and it is overlooked to often.

For additional info on transport check out these sites:

http://www.worldbank.org/

http://www.jsi.com/JSIInternet/

http://www.psi.org/

Intro

I spent the summer developing transport solutions in the developing countries. From health care to corporations there is much work to be done and what is the most sustainable way to help these countries grow. I hope to explore these topics and share that experience with you.