POVERTY: Fair-trade coffee producers often end up poorer

May 14, 2011
Lawrence Solomon is founder of Green Beanery, which runs a roastery and coffee shop in Toronto as well as selling coffee online. Green Beanery is not a member of the fair-trade associations described.




Beawiharta/Reuters

Coffee is one of our guilty pleasures, and not only because of the calories that can be packed into a double latte. Many of us feel guilty that our pleasure is coming at the expense of the Third World coffee farmer, so much so that we gladly pay more for “fair-trade” coffee, which certifies that farmers receive more revenue for their crop.
Saturday, on World Fair Trade Day, we have something else to feel guilty about. That fair-trade cup of coffee we savour may not only fail to ease the lot of poor farmers, it may actually help to impoverish them, according to a study out recently from Germany’s University of Hohenheim.
The study, which followed hundreds of Nicaraguan coffee farmers over a decade, concluded that farmers producing for the fair-trade market “are more often found below the absolute poverty line than conventional producers.
“Over a period of 10 years, our analysis shows that organic and organic-fair trade farmers have become poorer relative to conventional producers.”
These findings do not surprise me. I speak as someone who has had contact with various Third World producers in my capacity as president of Green Beanery, a company I founded seven years ago to raise funds for Energy Probe Research Foundation, a federal charity that I manage. Green Beanery sells more varieties of coffee, including fair trade and organic coffees, than any other company in Canada, giving me occasion to witness the nature of the fair-trade business, and hear first hand of its impact on small producers that supply us.
The fair-trade business is filled with contradictions.
For starters, it discriminates against the very poorest of the world’s coffee farmers, most of whom are African, by requiring them to pay high certification fees. These fees — one of the factors that the German study cites as contributing to the farmers’ impoverishment — are especially perverse, given that the majority of Third World farmers are not only too poor to pay the certification fees, they’re also too poor to pay for the fertilizers and the pesticides that would disqualify coffee as certified organic.
Their coffee is organic by default, but because the farmers can’t provide the fees that certification agencies demand to fly down and check on their operations, the farmers lose out on the premium prices that can be fetched by certified coffee.
To add to the perversity, it’s an open secret that the certification process is lax and almost impossible to police, making it little more than a high-priced honour system. Although the certification associations have done their best to tighten flaws in the system, farmers and middlemen who want to get around the system inevitably do, bagging unearned profits. Those who remain scrupulous and follow the onerous and costly regulations — another source of inefficiency the German study notes in its analysis — lose out.
The study, published in the journal Ecological Economics, recommends that policy “move from certification schemes to investments in the farm and business management skills of producers” — in other words, phase out the certification fees.
Most merchants of certified coffees are aware of these contradictions, but most won’t be aware of other problems in the certification business. For Third World farmers to qualify as fair-trade producers, and thus obtain higher prices for their coffee, farmers must join co-operatives. In some Third World societies, farmers readily accept the compromises of communal enterprise. In others, they balk. In patriarchal African societies, for example, the small coffee farm is the family business, its management a source of pride to the male head of the household. Joining a co-operative, and being told when and what and how to plant entails loss of dignity.
The contradictions are acknowledged even by many fair-trade merchants, who often refer instead to anecdotal reports of less quantifiable benefits such as better health care or schooling in a village or even, most tangentially, improved habitat for birds or wildlife.
The contradictions extend to consumers of coffee in the West. Several years ago, I received a call from a church in Kingston, inquiring whether Green Beanery could supply it with freshly roasted fair-trade coffee on a weekly basis.
Along the way, the church officer mentioned that the parishioners wanted to do what they could to help poor farmers in the Third World. I replied that I’d be happy to supply the church, but I also advised him that fair-trade coffee would not help the poorest of farmers — these smallholders are actually hurt when Western consumers forsake them for coffee produced by better-off farmers who can afford the certification fees.
I also mentioned that various coffees produced by small farmers in some of the neediest parts of Africa would taste superb while costing the church less, allowing it to spend the difference on some other worthwhile cause.
After a long pause, the church official replied something like: “I still think the parishioners would feel better knowing that they were drinking fair-trade coffee.”
Some believe that certified coffee is superior in some way. It is not. The small-scale farms whose local ecologies produce distinctive, niche coffee beans can’t operate on a scale that would justify official certification. As the German study notes, “Certified coffees have distinct production and marketing systems with different associated costs than the conventional system.”
Neither is certified coffee different at all. In fact, at Green Beanery we have received bags of coffee, some labelled fair trade, some not, grown on the very same farm and identical in every respect. The fair-trade certified farmer himself can’t tell which beans will be sold as fair trade and which not — that decision is made by the higher-ups.
Because the fair-trade associations are intent on keeping the price of fair-trade coffee up, they limit the supply of coffee that can be labelled as certified. To the certified farmer’s chagrin, most of his fair-trade certified crop could end up being sold as uncertified conventional coffee.
And in this well-intentioned price-fixing game, the fair-trade farmer is the pawn and the joke is on the customer.
http://opinion.financialpost.com/2011/05/14/lawrence-solomon-fair-trade-coffee-producers-often-end-up-poorer/

MALNUTRITION: Experts say 53.5 mln suffer from hunger in L. America, Caribbean

Editor: Xiong Tong : 2011-05-06

LIMA, May 5 (Xinhua) -- A total of 53.5 million people in Latin America and the Caribbean suffer from hunger or malnutrition, experts said at an international forum here Thursday.
Juan Garcia, coordinator of the 5th work-group meeting of the Latin American and Caribbean Initiative Without Hunger, said the figure has not increased since 1990.
Experts and officials from 13 countries gathered to discuss the challenges facing regional food security and advances that have been made, hoping to make cooperative efforts to eradicate hunger and malnutrition by the year 2025.
Garcia said people affected most across the continent are still those living in rural areas as well as African descendants and indigenous people who suffer from "exclusion and inequality."
The main cause of undernutrition is not lack of food-production capacity, but access to food, Garcia said.
Six countries, Brazil, Ecuador, Venezuela, Guatemala, Honduras and Nicaragua, have approved food security laws with nine more in the process of doing so. The laws are considered as a way to ensure that local agricultural products are primarily used to feed the countries' own populations and not used for export.
http://news.xinhuanet.com/english2010/health/2011-05/06/c_13861779.htm

POVERTY: Central America: Boosting Small Enterprise to Fight Poverty

Danilo Valladares : May 06, 2011

Small and medium-sized companies in Central America are the targets of foreign development aid programmes aimed at fighting the region's high poverty levels.
One of the initiatives is the Access Programme for Rural Associations of Micro-, Small and Medium-sized Enterprises in Central America, implemented by the Guatemalan Exporters Association (AGEXPORT) and financed by the International Fund for Agricultural Development (IFAD), a specialised United Nations agency.
'We are mainly seeking to generate employment, and through that, to secure access to food and nutrition security and improve people's quality of life,' the programme's director, Iván Buitrón, told IPS.
The initiative, which got underway in March at a total cost of three million dollars, will provide training to more than 80,000 rural entrepreneurs in Honduras, El Salvador, Nicaragua and Guatemala over the next three years.
When asked about the programme's aims in the region, Buitrón said, 'One is to strengthen capacities in business, administration, accounting, costs, sales and delivery.'
Other goals are 'to support organisational development in production and productivity, and ensure that products reach the standards of quality and volume demanded by the markets and follow traceability requirements.'
Another focus, the AGEXPORT official said, is disseminating 'knowledge, to facilitate access to international fairs to learn about successful initiatives and the importance of meeting safety standards and green production standards.'
Working together is fundamental to helping small and medium enterprises (SMEs) take off. 'It's essential for the state to invest in infrastructure and in stocking up for production, for the private sector to contribute to the technical aspects of market intelligence, and for both to complement each other in public-private alliances,' he added.
The programme thus seeks to reduce poverty by boosting incomes in Honduras, El Salvador, Nicaragua and Guatemala, which are classified by the World Bank as four of the world's 56 lower middle income countries - between 976 and 3,855 dollars in GNI per capita.
For example, 47 percent of Nicaragua's 5.7 million people live on two dollars a day or less, according to the country's National Development Information Institute, as do half of Guatemala's 14 million people, according to United Nations figures.
Despite the high poverty levels, Central America has potential. 'There are many opportunities, and there is demand for products from this region, but what are lacking are policies of support and incentives for speeding up access to markets,' Buitrón said.
The needs of SMEs are clear. 'We have a problem with intermediaries, because they set the prices, and since demand is low, we have to accept them, even if we end up actually losing money in the end,' Alberto Ortiz, a craftsman from the village of Samayac in the southern Guatemalan province of Suchitepéquez, told IPS.
Ortiz, who makes leather belts and bags, finds it hard to overcome the barriers standing in the way of selling his products. 'We have tried to set up an association, but we've had problems, and the government institutions haven't given us a hand,' he complained.
He has no doubt that the IFAD-financed training programme will be a great opportunity for developing small businesses, 'principally for selling our products,' he said.
Lina Martínez, manager of the Garifuna-owned company Wabagari Distribution that makes cassava-based ethnic products in Honduras, under the Casabe O'Big Mama brand name, told IPS that SMEs 'lack the capital and productive and technological capacity to generate volume.'
Martínez, whose company makes 'casabe', an unleavened flatbread made from cassava flour, says 'soft credits' are needed to meet these needs. 'It's important to focus on products with better packaging, and to provide loans with soft interest rates. That would be an excellent alternative,' she said.
Her company sells its products to Wal-Mart, through the U.S. hypermarket chain's 'Una Mano para Crecer' (A Hand to Grow) supplier development programme.
But there are risks when it comes to how aid to SMEs is implemented.
'The support has to have flexibility that provides maneuvering room to allow businesses to respond in a proactive manner to the real situation they encounter,' Yasmin Martínez, with the Chamber of Commerce and Industry of El Salvador, told IPS.
'But these programmes sometimes come with so many limitations that the money ends up in the hands of consultants who tried, but were unable,' to help get SMEs off the ground, she said.
Yasmin Martínez believes the gap in technology and training and a lack of innovation are the main problems faced by SMEs in El Salvador, not to mention organised crime, which through extortion 'suffocates our businesses,' she added.
SMEs are vital to the economy in El Salvador and the rest of the countries in the region.
In El Salvador, 99.6 percent of all businesses are SMEs, which number more than 174,000 in total and account for 65.5 percent of all jobs, generating nearly 488,000 direct jobs, according to the Chamber of Commerce and Industry.
Ingrid Figueroa with the Central American Integration System's (SICA) Centre for the Promotion of Micro and Small Enterprise in Central America told IPS that fomenting small-scale business initiatives, improving access to financing, and strengthening financial education are major challenges that must be addressed in the region.
http://www.globalissues.org/news/2011/05/06/9544

POVERTY: The charity War on Want was formed 60 years ago. But its assertion that all poverty is political regularly brings it into conflict with the authorities

 Posted by: John Hilary 14 February 2011




War On Want: Marking 60 years of fighting global poverty. Photograph: Mike Russell/War On Want



Sixty years ago, on 12 February 1951, the Manchester Guardian carried a letter from Victor Gollancz calling for people to join him in an urgent campaign against world poverty and militarism. Britain was at that time fighting an unwinnable war in Korea, and Gollancz asked all those who agreed with his call for a negotiated settlement to end the conflict to send him a postcard marked with the single word "yes".
The letter provoked a massive response. Within a month, Gollancz had received more than 10,000 postcards, and War on Want was born. The future prime minister Harold Wilson, then an ambitious Labour MP, was tasked with drawing up a plan for world development, which was published the following June. The report cited the yawning gap between the world's rich and poor as "the supreme challenge of the next 50 years", and called for a popular movement to address that challenge.
Even at this early point in its history, War on Want affirmed that development is first and foremost a political issue. Harold Wilson's report had stressed that the fight against poverty should be seen not as "an exercise in condescending charity from the rich to the poor" but as a campaign against injustice. When Wilson himself was elected prime minister in 1964, he immediately established Britain's first Ministry of Overseas Development as a key part of his government, with a former War on Want trustee, Barbara Castle, as minister in charge.
War on Want's conviction that all poverty is political was strengthened by the famine that swept across the Sahel in 1973. This was the first "televised" African disaster, and the British public responded generously to the joint appeal from the Disasters Emergency Committee (DEC). War on Want had been part of the DEC, but became increasingly unhappy with a simplistic response to such disasters. In 1974 it carried out a detailed analysis of the causes of the famine, which found that it was caused by profound social and economic changes over decades of colonial and neo-colonial domination, not by famine. As a result, War on Want turned away from aid delivery and instead backed a five-year political programme to address inequitable land distribution and the lack of employment opportunities.
War on Want's overtly political stance has brought the organisation into regular conflict with the authorities, as in 1971, when War on Want came out in support of the national liberation struggle in Bangladesh. When the Charity Commission complained that a War on Want advertisement raising awareness of the plight of the Bangladeshi people "had crossed the borderline into the political sphere", War on Want fought back, publicising the case and challenging the Commission's judgment. It was deluged with telegrams of support and funding to cover legal costs.
War on Want was equally forthright in its support for the Nicaraguan people under the Sandinista government, which had introduced a body of progressive reforms to address the high levels of poverty inherited from the Somoza dictatorship. Yet when War on Want launched a "Nicaragua must survive" campaign to defend the country against US aggression in 1985, the organisation again became a target of the political right. Fresh complaints were made to the Charity Commission, which censured the organisation both for its support to the Nicaraguan people and for its active engagement with the anti-apartheid struggle in South Africa.
Today War on Want continues its work in partnership with some of the most innovative political and social movements around the world. This includes landless people's movements in Brazil and Mozambique, women's rights groups in Colombia and Honduras, trade unions in Bangladesh and Sri Lanka, as well as liberation forces in Palestine, Western Sahara and Iraq. War on Want runs hard-hitting campaigns against corporate and government targets alike, and is the only major British charity prepared to call for the immediate withdrawal of Nato troops in order to end the slaughter in Afghanistan.
This political approach still brings the organisation into conflict with the authorities. Zionist groups have made repeated complaints to the Charity Commission over War on Want's vocal support for the boycott, divestment and sanctions movement in Palestine, but War on Want has successfully fought off all such attacks. Most recently, War on Want has been cited to the Charity Commission by the Tory MP Matthew Hancock over the organisation's support for direct action by UK Uncut activists against tax dodging by companies..
Once again, War on Want is unrepentant. We believe that the fight for justice requires us to challenge the root causes of poverty, not its symptoms. That means contesting power through political action, not repeating endless calls for charity and aid. As we are witnessing today in Egypt, Tunisia and many other countries, millions of activists around the world still put their lives on the line on a daily basis to defend their rights. The least we can do is stand in solidarity with them.

http://www.guardian.co.uk/global-development/poverty-matters/2011/feb/14/war-on-want-60-year-struggle

POVERTY: This time, rising agricultural prices mean windfalls for some in 2011

 January 13, 2011: Steve Wiggins

In 2008 developing countries, and poor people within them, were hit hard by the price spike in the international cereals market. Once again food prices are moving up, not that far short of the levels seen three years ago, so does this mean another bout of hardship? Some think so. Last Thursday The Guardian ran with the headline “World food prices enter 'danger territory' to reach record high”.

Is this right? Not quite: there’s a difference this time.
It is not just cereals prices, nor just food prices, that are rising, but almost all agricultural prices — including those of the main tropical exports: cocoa, coffee and tea; cotton; palm oil; sugar; and rubber. Most low income countries, leaving aside the few with minerals and oil, depend heavily on these for their export earnings. Often much of the production comes from small farmers. Higher prices mean windfall gains for them, gains that are likely to be spent on local goods and services, with strong multipliers in additional jobs and incomes for others on low incomes.

On the other hand, most of these countries are net importers of cereals and will suffer from higher prices on these items.
So where will the balance between extra costs and windfall gains fall?

Let’s consider five countries: Burkina Faso; Ghana; Indonesia; Kenya; and Nicaragua; then see the likely impact through changes in the value of their trade in ten of the most commonly traded items — maize, rice, wheat; palm oil; tea, coffee, cocoa; sugar; cotton, and rubber. The calculation is simply to compare recent volumes of imports and exports priced at November 2010 levels, compared to the average prices for 1999 to 2008.
The results, see Figures A to C, are instructive. All five countries get a large boost to their export revenues — by around 20% in two cases, by 40% in another two, and by more than 100% in Burkina Faso — this last thanks to being so heavily dependent on cotton, the price of which has risen dramatically over the last six months.




On the downside, see Figure B, import costs rise; but in all cases by less than the export windfall. Increased costs of cereals, and in some cases sugar, palm oil account for these increases.



The net effect is thus a considerable injection to the economy, see Figure C: in four cases worth more than 1.5% of GDP with Burkina showing a 3% gain from changing agricultural prices.
http://blogs.odi.org.uk/blogs/main/archive/2011/01/13/food_prices_windfalls_2011.aspx

Fighting Poverty Can Save Energy, Nicaragua Project Shows

Marianne Lavelle: National Geographic News: November 25, 2010
In two small villages on Nicaragua’s Mosquito Coast, a project to improve electricity service had a remarkable side benefit—household energy use actually dropped nearly 30 percent. When efficient compact-fluorescent (CFL) lightbulbs were added to the mix, energy savings surpassed 40 percent.
The effort cut costs and brought longer hours of daily electricity service to the people of Orinoco and Punta Marshall, while demonstrating how improving energy access to poor people around the world can go hand-in-hand with reducing fossil fuel emissions, say the authors of a new study.
It shows that you can meet development objectives for the poor and climate objectives for all of us at the same time,” said Daniel Kammen, chief technical specialist for renewable energy and energy efficiency at the World Bank, and co-author of an analysis published Thursday in the weekly journal Science.
The Energy Poverty Challenge
The study set out to demonstrate a method for measuring both the climate and financial benefits of making investments that improve delivery of reliable, affordable energy for poor communities. Mobilizing such investment is crucial, with 1.5 billion people around the world living without electricity. Another 1 billion people have unreliable electricity, and nearly half the global population relies on unhealthy and polluting wood, charcoal, and dung stoves for cooking.
The United Nations said in a report co-written with the International Energy Agency earlier this fall that its goals for fighting extreme poverty will fall short unless nations also work to bring electricity and modern, safe cooking technology to the “energy-poor” people around the world.

  The village of Sandy Bay, about 30 miles (48 kilometers) away from Orinoco, is on the Mosquito Coast, where many homes have no electricity or rely on costly diesel generation. Photograph by M. Timothy O'Keefe, Alamy

But short-term costs often trump potential long-term benefits when governments and institutions consider energy improvement investments. For example, because of the low up-front capital costs and the ease of obtaining fuel supply, diesel generation is often the technology of choice in poor rural areas in the developing world. The study authors say that makers of energy policy who choose diesel don’t give sufficient consideration to the volatility of oil prices, and the resulting expensive generation costs.
That was certainly the case in the villages of Orinoco and Punta Marshall near the Caribbean Sea, where 172 homes, six churches, two health clinics, two schools, and a carpentry shop relied on a government-run diesel “microgrid.” The researchers don’t know how much the Nicaraguan government was paying for diesel, but they estimated the “marginal” cost of electricity on the system, the cost to provide each additional kilowatt-hour, based on average diesel prices at that time in Managua, was 54 cents per kilowatt-hour, more than five times the estimated cost for electricity on Nicaragua’s national grid.
Households did not have meters to measure how much power they used, but paid flat tariffs that differed house-to-house—the price reckoned by the government electric company based on assessments of how many appliances seemed to be in each home. This approach is “quite common” in the developing world, said Christian Casillas, of the Renewable and Appropriate Energy Laboratory at the University of California, Berkeley, co-author of the analysis in Science. “Rural electricity providers are often more concerned about the additional capital cost of installing meters, and are not aware of, or are indifferent to, the long-term savings that can result from consumer response to more accurate price signals, which we quantify in the study,” he said.
The energy improvements in Orinoco and Punta Marshall were made beginning in the summer of 2009, in a partnership between the Nicaraguan government and the nonprofit group, blueEnergy. Soon after the simple installation of conventional electricity meters in the homes, at a cost the study authors estimated at about $4,350, household energy use dropped about 28 percent. The pattern that the researchers observed—the greatest savings occurred in daylight hours—suggested that residents had taken steps such as turning off lights during the day. The resulting savings of an estimated 5,625 gallons (21,291 liters) of diesel fuel annually translated to a more than $22,000 reduction in fuel costs over the course of a year (based on $1.06 per liter diesel fuel). And, the study authors calculated, carbon emissions were reduced by 57 tons, with cost savings of $386 per ton.
A second step was to distribute 330 high-efficiency compact-fluorescent (CFL) lightbulbs to the communities, with each household given the opportunity to exchange up to two of their incandescent bulbs for CFLs. Representatives of the government energy agency and blueEnergy visited each household to explain that CFLs consume 25 percent of the electricity of incandescents while providing the same level of lighting and lasting much longer. They also explained that the bulbs need to be disposed of by returning them to the government agency, due to the small amount of mercury in each CFL. The cost of the program, including labor, was estimated by the researchers to be about $1,030. The energy load on the system fell by 50 kilowatt-hours per day, or a 17 percent drop on top of the savings due to the meter installations. That reduced diesel fuel needs by about 2,460 gallons (9,310 liters) per year, translating to a 25-ton reduction in carbon emissions, at a cost savings of $374 per ton.
Nicaraguan energy authorities used the fuel savings to extend the hours of electricity service to the communities by two hours each day, for a total of 12 hours. And 37 percent of the households saw lower electricity bills; for the poorest households, costs did not fall with their drop in energy use because the regressive tariff structure required that the smallest consumers pay a fixed rate, the researchers noted.
Renewable Energy Opportunity
The researchers underscored the even greater potential to reduce carbon emissions in the community, now that the electricity load has been slashed. They calculated that downsizing the diesel fuel electricity generator could save a further $5,760 per year (or $147 per ton of carbon reduced). And adding renewable energy to the system would also be a net benefit: Replacing a portion of diesel fuel generation with biogas, produced locally through anaerobic digestion of animal dung and agricultural residues, could save $4,012 per year ($271 per ton of carbon reduced), and installation of a 10-kilowatt wind turbine could save about $7,767 per year ($34 per ton of carbon reduction.)
The only emissions-reducing improvement the researchers considered that would actually cost money was adding a 10-kilowatt solar photovoltaic installation to the system; the cost would be $9,501 annualized, or $322 per ton of carbon reduced. But with savings of more than $1,600 per ton possible for all of the other energy improvement measures the researchers catalogued, as well as likelihood that diesel fuel will cost more in the future, a solar system for further cutting carbon emissions could begin to look affordable to authorities managing the system.
It’s an important finding for countries such as Nicaragua, Central America's largest nation, and and among its poorest. A 2007 World Bank report said that although Nicaragua has great potential for renewable energy at a competitive price, the majority of its electricity generation is from petroleum.
“This is really a prescription to think about energy systems holistically,” said Kammen. “It was hard to do that in the past. It does require data, which can lead you to some really important observations.”
The analytical method outlined in the paper is “very helpful for certain contexts, particularly for looking at how increasing energy efficiency can help support energy access," says Richenda Van Leeuwen, senior director on energy and climate for the the United Nations Foundation, a nonprofit that supports the work of the UN. She said she especially sees potential for the approach to be adapted for addressing the global problem of primitive cookstoves. Inefficient wood and waste stoves, used by 3 billion people around the world, create black carbon particulate emissions, a large contributor to climate change, and have a devastating impact on health—especially for women and children.
“There is really room for more research in this area for both traditional cooking and kerosene-based lighting, which both emit smoke,” Van Leeuwen said. “You could begin to monetize the savings of fewer trips to clinics, and fewer treatments for acute pneumonia and other respiratory illnesses that are common among people breathing in cookstove smoke day in and day out.”
Van Leeuwen said the approach is among those being weighed by the new public-private partnership, the Global Alliance for Clean Cookstoves, launched earlier this fall by the UN Foundation in conjunction with the governments of the United States, Germany, Norway and Peru; the United Nations; global energy company Shell* and its Shell Foundation; investment bank Morgan Stanley; and the nonprofit SNV-Netherlands Development Organization.
The type of analysis that Casillas and Kammen did, called a “marginal cost abatement curve,” has been done before to show the benefits of energy efficiency for the developed world—with the most notable example in climate change literature a 2007 study by the consulting firm McKinsey and Company. But Kammen said his new study underscores the importance of doing a similar analysis for the world’s poor, who can spend more than 30 percent of their income on energy services. In wealthy countries, only 2 to 3 percent of Gross Domestic Product is spent on energy. “Because energy services are often expensive,” said Kammen, “finding ways to provide them more efficiently benefits the poor more than the rich.”

* This report is produced as part of National Geographic’s Great Energy Challenge initiative, sponsored by Shell. National Geographic maintains autonomy over content.

Poverty: The poor live in a complex world of competing and unmet basic needs

Jonathan Lewis
September 7, 2010
The poor live in a complex world of competing and unmet basic needs. It is a world of few choices, and many hardships.
Macro statistics abound, but what are the defining elements of poverty on the ground? What does "ending poverty" mean at the so-called bottom of the economic pyramid (BoP)? What are the implications when the poor are sliced and diced into ever narrower customer market segments (or policy silos)? Does anyone really talk, let alone listen, to the poor?
Does a poor person with no money for medicine need a public health system or a job? Is a struggling subsistence farmer a victim of global trade barriers or does he lack the financing to buy a manual water pump? The lines blur.
The blurring is what VisionSpring is bringing into focus.
In the Third World, if you can't see well, you can't work well. For lack of a $5 pair of glasses which an American can buy in any retail pharmacy, a poor person in the developing world is stopped from sewing, cutting hair, reading a sign about safe sex, sorting seeds to plant -- virtually any productive work.
In Nicaragua, Dionicio Torrez-Hernandez, a father of seven with blurry vision, inefficiently inspected his shrimp harvest with a handheld magnifying glass. After his neighbor, a young woman (one of 6,200 individuals, mostly women, selling VisionSpring glasses), sold him a pair of low cost reading glasses, his on-the-job productivity has doubled.

VisionSpring: Dionicio & Lisseth's Story from elizabeth kaplan on Vimeo.
The two over-arching lessons from VisionSpring are (a) a targeted, low-cost tool, in this case a simple pair of eyeglasses, can leverage massive opportunity for individuals in the developing world and (b) the social change organizations worth backing are hybrid models which focus on multi-disciplinary solutions.
Dr. Jordan Kassalow, an Opportunity Collaboration Delegate, captures the idea:
"This is not just charity, although the intention is charitable; it is a nonprofit organization. The mission is to improve people's lives through better vision and economic empowerment. It's not a health organization as much as it is an economic development organization. We use the health product to help economic development along."
VisionSpring, itself a nonprofit, needs charitable donations, but deploys a self-supporting franchise business model around the world to distribute and sell glasses. Local, self-sustaining jobs are created while eyeglass customers keep the delivery system responsive to local needs. Optical health and personal quality of life improves while economic life extends.
The organizational model is a blurry hybrid, but the vision is clear and compelling.
http://www.huffingtonpost.com/jonathan-lewis/eyeballtoeyeball-with-hyb_b_706535.html

POVERTY: India, microcredit abounds

Yadamari, India
When Gajendra and his wife Marigamala want a loan, they are spoiled for choice in this village six hours from Bangalore.
Five microfinance institutions offering small loans to the poor have set up shop here in the past five years, and at least two smaller unregistered ones offer money as well. The couple has taken loans from four of them, totaling 50,000 rupees ($1,000). With private microcredit lenders, unlike a bank or savings group, says Gajendra, “you just need a ration card and a photograph.”


Never has credit been so easy for some in the villages of Andhra Pradesh. The southern Indian state is at the epicenter of a decade-long boom in microfinance lending, a system of small loans so successful in aiding the poor that its pioneer, Muhammad Yunus, won the Nobel Peace Prize in 2006. That boom has intensified in India in recent years, transforming a largely nonprofit sector into a destination for private equity investors drawn by high returns and resilience despite recession.
Microfinance institutions (MFIs) watched their loan portfolio in India jump from $252 million to $2.5 billion between 2005 and 2009, according to data compiled by Sa-Dhan, an umbrella group for the sector. Last year alone the number of borrowers jumped 59 percent to more than 22 million people, and loan portfolio grew 56 percent. When including government-supported microcredit programs, the sector overall grew to more than 70 million borrowers and a $7.5 billion market.
But the spectacular growth and the rush of private capital into private MFIs – microfinance comprised 40 percent of equity deals in India last year – have some experts worried about a subprimelike bubble. The expansion has been too large, too fast, and too geographically concentrated, critics say, pointing to incidents of mass default in pockets of the country.


“Once irrational exuberance takes hold, it is difficult to puncture it until it is punctured,” says Sanjay Sinha, managing director of Micro-Credit Ratings International Limited in New Delhi, referring to the subprime housing crisis that triggered the US recession. A March report from the Consultative Group to Assist the Poor (CGAP) found private equity valuations for Indian microfinance were six times book value, and three times the global median. Excess capital flows were driving overvaluation, the report said.
Last year, overheated microfinance markets led to repayment crises in Bosnia, Nicaragua, Morocco, and Pakistan, Mr. Sinha notes, which forced some MFIs to close shop. “There is a global exuberance about microfinance – a flood of money without the infrastructure to distribute that money.”
A vast microfinance market
With an estimated 400 million people lacking access to formal banking services, according to the central bank, India is considered one of the world's largest microfinance markets. By providing small loans at interest rates lower than moneylenders’, though higher than banks, microfinance enables the poor to access credit to make larger purchases or set up enterprises.
http://www.csmonitor.com/World/Asia-South-Central/2010/0630/In-India-warnings-of-a-microfinance-bubble

POVERTY: Microcredit in Guatemala

GUATEMALA CITY, Jun 21, 2010 (IPS) - Rosenda Gómez, a 53-year-old mother of five, knows all about challenges. To overcome them, she started a modest sausage business in Guatemala, and thanks to her leadership skills and training and other support she received, she is now an example of the economic empowerment of women.Sixteen years ago she began to make homemade sausages in her village, Laguna Ocubilá, to sell in the nearby city of Huehuetenango, the capital of the northwestern province of the same name. But her business was a micro-enterprise that allowed her family to just barely scrape by -- until things changed radically three years ago, when the Centros de Servicios para los Emprendimientos de las Mujeres (CSEM) came to her village. CSEM, a network of centres providing technical and financial services for women entrepreneurs, is sponsored by the United Nations Development Fund for Women (UNIFEM) in association with Guatemalan institutions. "We began to receive support, in the form of credit, training to improve our products, and promotion of our chicken and pork sausages in markets and fairs -- none of which we had before," Gómez told IPS. With that boost, Gómez, who only went to school up to third grade, managed to increase production from five to 50 kgs of sausages a week, and demand continues to grow. She also received support to set up a meat processing centre, along with other women backed by the CSEM, which changed the life of her family and her business. Her three youngest children, between the ages of 13 and 15, still live with Gómez and her husband, a truck driver, while the other two have already given them seven grandchildren, she says proudly. Her achievement is even more impressive given the limited economic independence of women in this impoverished Central American country. Men represent 65 percent of the economically active population, and women only 35 percent, according to the government's national survey on employment and income. Social organisations point to the vicious circle of poverty, lack of education and lack of health care suffered by so many in this country of 14.3 million people, where the poverty rate is slightly higher for women (51.5 percent) than for men (48.4 percent), according to the 2006 national survey on living conditions. The CSEM is now supporting 3,273 women in seven services centres that began to be established in 2006 in the country's poorest provinces. Seven others operate in El Salvador, Honduras and Nicaragua. "We learned how to draw up a business plan, market our products and estimate production costs," Sonia Paz, the head of the Asociación de Mujeres Olopenses women's association in the eastern province of Chiquimula, where one of the CSEM centres operates, told IPS. Paz forms part of a group of 36 women who make and sell handicrafts like bags and keychains using fibre from the maguey, or agave, plant. "Thanks to support from the CSEM, we have improved the quality of our products and we have registered with the tax office," said Paz. Rita Cassisi, UNIFEM coordinator in Guatemala, told IPS that the CSEM helps women set up businesses by offering loans, organisational training, assistance in improving products, marketing techniques and other support. "One of the vacuums that we have seen is women's access to financing, which is why the programme is focused on a strategy of economic empowerment at the local, national and regional levels," she explained. At the local level, the CSEM centres work with economic development agencies and public and private lending institutions; at the national level they work with universities, the Economy Ministry, the Presidential Secretariat of Women, and women's groups; and in Central America as a region they work with organisations and agencies that support women. According to Cassisi, the CSEM's beneficiaries "are at the base of the business pyramid; they are women who set up micro-enterprises and micro-businesses, which help move the economy." Like any effort, the CSEM has run into hurdles. Gilda Rivera, head of the CSEM in the western province of San Marcos, told IPS a that although they opened their doors in April 2009, things are moving slowly. "The problem is that we don't have funds to invest, and we have around 80 women waiting for our support," she said. In Rivera's view, too many requisites are set for approval of projects in some cases, which slows down the process, while many women are waiting for training and loans in order to upgrade their businesses and increase production. According to the third regional report on the labour market in Central America and the Dominican Republic produced by the International Labour Organisation (ILO) and the Central American Integration System (SICA), 73 percent of women in the labour force in Guatemala work in the informal economy. Iris Alvarado at the non-governmental Centro de Investigación, Capacitación y Apoyo a la Mujer (CICAM - Centre for Women's Research, Training and Support), told IPS that Guatemala faces serious challenges in terms of gender equity, above and beyond women's economic independence. The country's high levels of gender violence and limited access to education and health, especially in rural areas, must be addressed in the attempt to combat gender inequalities and to provide equal opportunities and living conditions for girls and women, Alvarado said.
http://ipsnews.net/news.asp?idnews=51893

POVERTY: Microcredit problems in India

Savita Ramesh Rathore stands at the door of her dimly lit workshop in Mumbai's Dharavi slum, filled floor to ceiling with bundles of old clothes, and talks about the cost of her son's wedding last year. "Jewels, clothes, food, the town hall," says Rathore, 50, who makes towels from discarded clothes. She borrowed 30,000 rupees ($647) from moneylenders charging 60 percent interest and took additional loans from friends. Three months ago she got a 10,000-rupee loan from urban lender Hindusthan Microfinance at an interest rate of just over 20 percent to repay some of that debt.
Rathore is one of 25 million Indians who have taken so-called microfinance loans, often without adequate documentation or collateral, according to research firm Micro-Credit Ratings International. As Hyderabad-based SKS Microfinance plans to become the first microlender in the country to go public, an industry credited with helping alleviate poverty is suddenly provoking comparisons to subprime lenders in the U.S.
"Globally, microfinance is showing characteristics of the Western financial markets before the collapse," says Sanjay Sinha, managing director at Micro-Credit Ratings in Gurgaon. "In the U.S., homeowners were given loans at 120 percent of the value of their properties. In rural India, people are being lent to at 150 percent of the value of their enterprises."
Microfinance firms make loans in poor areas largely shut off from traditional banking services. The past two years have been marked by surging defaults in some countries. Microfinance markets in Nicaragua, Morocco, and Pakistan have seen default levels climb to more than 10 percent, the threshold that marks a "serious repayment crisis," according to a February report from policy and research firm Consultative Group to Assist the Poor.
India, where more than 600 million people live on less than $1.50 a day, is the world's largest microfinance market. Most microfinance loans in India range from 5,000 to 20,000 rupees ($108 to $431), with interest rates ranging from 18 percent to 33 percent. Although Indian microfinance firms have reported bad-loan ratios of about 2.5 percent on average, levels may be higher because some lenders roll over loans to struggling borrowers to avoid defaults, says Micro-Credit's Sinha.
Microfinance lending in India may surge by about 40 percent annually over the next few years, says Sinha. SKS, betting the potential for growth will attract investors, is seeking regulatory approval for an initial public offering. Basix Group, which focuses on poor households in rural areas and provides loans averaging about 3,000 rupees, may sell shares in an IPO next year, says Chairman Vijay Mahajan. Others are likely to follow. Until now, microfinance companies have relied on loans and grants from banks, insurers, and foundations for funding, he says.
Micro-Credit's Sinha worries that growth in the microfinance market is masking an erosion of lending standards that may spark rising defaults. India doesn't have a nationwide system for tracking borrowers' credit histories, making it hard for lenders to check whether clients have multiple loans. "There is significant investor interest in microfinance companies' public issues, but it's being driven by irrational exuberance," says Sinha.
Rural lending can be particularly tricky. "If there's a bad monsoon and the farmers lose their crops, our money can go along with it that year," says Amit Kalokhe, a loan officer at Mumbai-based Hindusthan Microfinance. The firm tries to reduce risk by lending to groups of people rather than to individuals, founder Anil Jadhav says. "That way if one person defaults, others can pay the amount," he says. The 10,000-rupee advance to towel maker Rathore in Mumbai was part of a loan to a group of women, according to the company.
Rathore is already mulling how to finance another major outlay: her 19-year-old daughter's wedding. "Once my present loans are paid off, I know there will be more," she says, looking past the open sewage drains near the two-room home she shares with four family members. "The cycle doesn't end."
The bottom line: Rushing to cash in on a growing market, India's microlenders may be handing out money to borrowers who can't afford to repay it.
http://www.businessweek.com/magazine/content/10_26/b4184050319788.htm

Cuban Aid in Africa with GRISELESF

The Management Group of Cuba´s Pharmaceutical Biological Laboratories (LABIOFAM) has expanded the control of malaria in Africa, where this disease kills two million people every year, according to an announcement made in this capital by Doctor José Antonio Fraga.

Cuba has cooperated with the medicament to eradicate malaria.
Fraga, the head of that institution, told ACN that Angola, Ghana, Gambia, Senegal, Tanzania, Equatorial Guinea and the People´s Republic of the Congo are among countries with which Cuba has cooperated with the medicament to eradicate that disease. The island also cooperates in this regard with Nicaragua, Brazil, and other South American states.
Cuba has transferred the medicament´s technology to several nations and today it´s producing it in China and Argentina, and will soon open factories in another six countries, pointed out Fraga.
He underlined that the medicament developed by LABIOFAM -called GRISELESF- is showing favorable results in the African continent, and added that contracts with various nations and the participation of Cuban specialists with national products are increasing.
http://www.escambray.cu/Eng/cuba/malaria100413519