Tuesday, April 12, 2011

Fair trade in an unfair place…

What exactly does ‘fair trade’ mean? I understand the principal that a worker who produces a product should get a fair wage rather than being exploited by his employer or by the distributer. But when you are living in a foreign place, trying to figure out what things are supposed to cost and attempting not to get taken advantage of, the lines get a little grey sometimes….

We have noticed that items which are hand-made with local materials are often dramatically cheap. One day a young boy came to our door selling some hand-made mats and baskets made of palm fibers. We did not really need anything, but decided to inquire about the price of the basket. “500 francs”, he said (about 50 cents). “500 francs??”, we questioned, surprised but wanting to verify that we had heard correctly. “Ok, 400.” he said quickly. “No, 500 is a good price. We’ll buy it.” This basket perhaps took one day, perhaps 2 to make? Is that a fair price? The price is determined partly by what people are willing to pay, and apparently the local demand has set the price at 500 francs.


In another case, the woman in the picture below is a widow who lives with the family of her adult son. She does not want to be a financial burden to them, so she makes brooms out of palm branch fibers and sells them. In the picture below I am holding one of her brooms while she works on stripping the palm branches. Brooms like this are ubiquitous in Kananga, and the standard price is 100 francs (10 cents). This woman is able to make 2 brooms per day if she works all day. The profit she makes is not enough to buy food for one person, let alone support a family. It gives her a small amount that can supplement the income of her son, and perhaps is a good job for an older widow. But how is it that the people making these brooms are willing to accept 100 francs as the purchase price??


On the other hand, sometimes we feel ‘taken in’ by what seem like exorbitantly high prices. We might be told that a small statue is $30, or a woven piece of material $25. We realize that there is a culture of bargaining here…people rarely buy anything without negotiating the price with the seller. So, sellers tend to start a bit high, and with foreigners they might even notch their price up again just to see what they can get. We have artists or distributers of art come to our door frequently. We do want to enjoy locally made crafts and support these artisans, but we also want to do it at a reasonable cost. We bargain with them, and hope that they will not agree to a price that is not reasonable. Our goal is to find that ‘sweet spot’, where they make some profit and feel validated, and we feel we have paid a fair price for the product.

The concept of a ‘fair price’ is tricky, though. A few weeks ago, an elder in the church came to show us his hand-carved figurines made of coconut shell. We were impressed, and decided to buy a village scene. He said his starting price was $20 for the set, but he would negotiate. We decided to answer with $10, figuring that we would settle somewhere in the middle. But he just looked a little disappointed, shrugged his shoulders, and said “Sure. If you think that is a good price, $10.” We hurriedly decided to give him $12 for the set, and tried to assess in our conversation if that price was really OK. Sometimes I just want to throw up my hands and say “I just want to know the truth! What is the price?? What is a fair price?” As Americans, we place a high value on truth and fairness. I hate the feeling that I am being treated unfairly, or that I am treating someone else unfairly. We are not trying to get such a good price that the producers do not make a profit—we just want to know what the right price is!

The economic environment does play a part. Average wages in Congo, in real terms, are only a fraction of what they were before independence. A qualified medical doctor in Kananga earns about $150 per month. An unskilled day-laborer earns only $1 or $2 per day. Even salaried workers have little money to spend, which keeps the profit margins very low for farmers and producers of local goods. So, if the woman making brooms charges enough to make a ‘living wage’, would it make sense if she earned as much as a doctor? That is how a market environment works, for better or for worse. Only those people who have no other options of earning an income are willing to make brooms, and they thus have little bargaining power to push up the price. It’s true—life is not fair.

How do we determine reasonable prices to pay for things? How can we positively influence the livelihoods of these crafts-people and producers, while honoring the culture environment here? We are open to suggestions and comments!

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