Turning the supply chain pyramid upside down

Pacific Growers Export Partnership
MEDIA RELEASE
Saturday 14 May 2011

Turning the supply chain pyramid upside down
Pacific Growers Export Partnership launches website on World Fair Trade Day

Today the Pacific Growers Export Partnership (PGEP) launched their website http://pacificgrowers.net to celebrate World Fair Trade Day.
Bringing together growers from the South Pacific including Vanuatu, Papua New Guinea, Solomon Islands, Fiji and Bouganville, the PGEP is an innovative initiative aimed at developing a supply network from Pacific countries to the international market with transparency, sustainability and fair trade as their guiding principles.
John Saki, PGEP network facilitator from the Solomon Islands said, “PGEP is excited to be launching our website today and be a part of the many celebrations happening internationally for World Fair Trade Day.”
“We are a co-creative collaborative partnership in the Pacific trading in cocoa, copra, coconut, cacao, local food crops and carbon.”
“To talk about Fair Trade means keeping the Growers at the top of the supply chain pyramid. Providing a real chance to alleviate poverty in the South Pacific and allowing local communities to strive towards sustainable development, economies and livelihoods.”
The PGEP partnership is open to any company that wants to trade commodities from the Pacific Islands; provided they share these goals and accept the basic principles of the PGEP.
Developed by African Pacific, an ethical trading and supply chain management company based in Australia, and FairMatch Support, an organisation based in The Netherlands, the PGEP's mission as stated on their website aims to:
'Link 15,000 growers in the Pacific Region into the international market by developing commercial trading platforms and building alliances that ignite action across the Pacific Region in which all partners are committed to each others success.'
Andreas Lombardozzi from African Pacific and PGEP partner said, “Operating under a Charter of Engagement which outlines the Fair Trade principles, African Pacific and all PGEP partners aim to measurably improve livelihoods of island communities across the Pacific Island Nations it operates in.”
“At the core is an Organic Economy model which turns the traditional supply chain model upside down, the Growers, who are the principle asset holders in the supply chain are at the top of the supply chain.”

“This is Fair Trade for a Fair Go!”
You can visit the Pacific Growers Export Partnership website at: http://pacificgrowers.net

BACKGROUNDER:
THE PACIFIC GROWERS EXPORT PARTNERSHIP
Introduction
The Pacific Export Growers Partnership (PGEP) is an innovative initiative aimed at developing a fair trade supply network from the Pacific Islands to the international market. The initiative was developed by African Pacific, an ethical trading and supply chain management company based in Australia, and FairMatch Support, an organization based in The Netherlands with a strong track record in the development and support of innovative sustainable value chains from developing countries to the European market. Pacific co-founders John Saki (Guadalcanal Origin Trade) from the Solomon Islands, Sakiasi Veitogavi (CETEL/Bula Organics) from Fiji, Pius Mimpi (MRCS) from PNG and Ursula Rakova from Bougainville. The first years implementation phase of the PGEP is currently funded by ICCO a Dutch inter-church organisation for development cooperation which focuses on access to basic social services, fair economic development and promotion of peace and democracy.

What is the PGEP?
PGEP is a transparent and sustainable network of companies and other organizations that work in partnership towards the common and shared goal of delivering positive development outcomes to Pacific Island producers using fair and transparent international supply chains. The partnership is open to any company that wants to trade commodities from the Pacific Islands; provided they share these goals and accept the basic principles of the PGEP.

Vision
To provide an alternative market structure to the existing exploitative practices through transparent and sustainable partnerships between the growers and the Traders of the Pacific Region

Mission
PGEP links 15 000 growers in the Pacific Region into the international market by developing commercial trading platforms and building alliances that ignite action across the Pacific Region in which all partners are committed to each others success.
The PGEP is already a functional trading platform. On average 20% of the FOB price is spent on in country administrative and logistic‘s expenses, with 80% of the value being paid directly to growers. The aim of the PGEP is to be a self sustaining trading network by 2012, provided funding can be found to continue to support the initiative and the capacity of the PGEP members.
There are two components to the PGEP – an upstream and downstream component. The upstream component is production, processing and export of Pacific commodities within the Pacific Islands (initially coconut oil and cocoa, later carbon credits and others). Production is either done by individual growers or by growers organized in groups. Some of these groups already exist – others have to be developed. Under the PGEP, producers (or groups) sell their produce to local business centres which carry out primary processing tasks, such as pressing of virgin coconut oil and fermenting and drying of cocoa. The processed product is then be exported by a licensed exporter, who may also be the business centre.
The downstream part of the PGEP connects Pacific Island producers to the world market and a transparent business support infrastructure. Training, business support, regular market information and knowledge to producers and producer groups is provided, enabling producers to play a more strategic role, take on a stronger negotiating position and make informed decisions within this challenging business environment. An open source information system- either web-based or mobile phone based - is anticipated to play a key role in this process.
This information system is used to exchange information on prices, orders, volume, best practices, etc allowing growers to validate information they are receiving (e.g. price quotations) and allowing for monitoring of the actual behaviour of actors in the supply network. Where needed, local business centres can develop local solutions for linking growers to the information system.
Value-adding through the marketing of ’Pacific Story” brands as well as organic and free trade certification are being developed. Discussions are already well underway with the Free Trade Association of Australia and New Zealand regarding certification and cooperative approaches. The PGEP Information system allows producers to validate whether the price offered is fair and provide the possibility to bargain collectively (locally, nationally, regionally) through the system. As information becomes increasingly available, greater efficiencies in the supply chain are also expected and producers’ capacity to use the system to their advantage will be built.
The programme also includes the establishment of a “PGEP” Foundation fund whereby each link in the downstream supply chain is encouraged to pay 2% of its revenue from PGEP sales to a fund to be used for social infrastructure projects in growers’ communities.
In the longer term, it is anticipated that PGEP could be used for other Pacific Island commodities.
The PGEP phased approach
1. Assessment and planning phase (current 12 month phase): The objective of the assessment and planning phase is to build the foundation for the implementation of the PGEP. This includes country specific analysis of trade bottlenecks and solutions to overcome them; a conceptual design of PGEP Information system as well as for the PGEP and; the development of the implementation phase and identification of potential donors.
2. Implementation phase: During this phase, it is anticipated that the focus will be on capacity building of growers (especially in business skills and use of the PGEP information system), development of grower groups, set-up of local information sharing mechanism, and selection and/or set-up of a local processor or exporter. At a central level, the PGEP information system will be developed and rolled-out including training of users.
3. Support phase: After the implementation phase, it is anticipated that supply chains should be able to function adequately but there may be need for some support (information system, development of new products) and the monitoring of development outcomes.

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