Producer Services Plan

Network of Asia and Pacific Producers (NAPP)3307, Lippo Centre, 89 Queensway, Hong Kong

273, Thomson Road, #04-01, Novena Gardens, Singapore- 307644

2016 Fairtrade in AsiaProducer Services Operating Plan

• Introduction

• Executive Summaries

• Continental Assessment: Resourcing of Core Producer Services and Future Ambitions for Scale

Contents

NAPP PROFILE The NAPP Map

3

20 countries

Half the world

Current Fairtrade

Potential for Fairtrade!?

4

IMPACT: FAIRTRADE MINIMUM PRICE (1/3 Parameter) Asia Pacific Overview

SPOs:• Fairtrade Minimum Prices (FMP) vis-à-vis prevalent market rates (at farm gate) • Volumes of Trade when FMP > prevalent market rates

HLs:• Fairtrade Minimum Wages vis-à-vis prevalent market rates (local) • Move towards “living wages” in a concerted strategy

5

IMPACT: FAIRTRADE PREMIUM (2/3 Parameter) Asia Pacific Overview

Take-away:• The reported Fairtrade Premium revenues to producers in Asia and Pacific grew marginally by only 2.7% from 2013 levels i.e. from 10.5

million to 10.8 million Euros • The growth was marginal within all producer set ups. Global premium receipts have grown by 13% from 2013 levels i.e. from 95 million Euros

(approx.) accruing to 1.5 million farmers and workers to 108 million Euros (approx.) accruing to 1.6 million farmers and workers• FT premium per producer organization: 57,830 Euros (Only looking at 187 POs as per MEL)• FT Premium per farmer/worker is 40.41 Euros p.a.• FT premium per worker is 15 Euros and FT premium per farmer is 56 Euros• With marginal increase in FT premium for Asia Pacific, is there merit in expansion of producer organizations?• Is FT premium the only way we can see impact of FT? What about Minimum Price and Knowledge?

Source: MEL Data 2014

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IMPACT: KNOWLEDGE & EMPLOWMENT (3/3 Parameters)Asia Pacific Overview

Following Section:• As we are working towards a measure of monetizing the “impact” of the work on Training and various programmes

• NAPP assumed responsibility for Producer Services and Relations from 1st January 2016, adding this to its already existing producer networking and representation role. NAPP will directly lead delivery of producer services in Asia, whilst Fairtrade ANZ will continue to lead delivery of producer services in the Pacific under service agreement to NAPP.

• In planning 2016 core producer services for Asia, NAPP has integrated system-wide needs and expectations: producers, markets, thematic & product experts and globally agreed member Key Performance Indicators.

• From this holistic perspective, an ideal plan and associated costs has been developed, together with an adjusted plan reflecting actual resources available. Prioritisation is guided by Fairtrade's global strategy, regional priorities and system wide KPIs for which NAPP is responsible for delivering. The impact of this resource gap is identified and assessed to help inform future resource allocations across Fairtrade. This core plan is complimented by rationale and steps to extend producer services work in the region to achieve impact at scale.

• The integrated Asia producer services plan is presented here to facilitate:

o Joined up working across Asia as well as with the international Fairtrade movement ; NAPP will invite Fairtrade members quarterly to assess progress and recommend changes to the plan to keep it current and relevant.

o Clear explanation for external partners to better understand our work in Asia, providing clarity and confidence in our work to secure complimentary partnerships and investment

Introduction: Context

Introduction: Important planning notes

• This integrated regional plan provides good progress towards system cohesion by facilitating improved joined up working across Asia, and between Asia and global colleagues

• This plan also provides a stronger platform for increasing individual accountability by ensuring mutual dependencies are clarified and addressed, and being transparent about deliverables

• The plan does not yet consistently objectify deliverables and provide accurate assessment of resources required to delivery. Work in 2016 to address this weakness includes:

o Consciously working more closely with international colleagues throughout the year to improve detail and specifity of requirements to meet global system needs and expectations

o Implementing a stronger system of internal review and performance management to enable the team to more accurately reflect on and forecast links between the work plan and resources to deliver

o Implementing a systematic performance review with MEL and international colleagues to develop insights and understanding of how producer services must evolve to deliver against current and future needs

• As a result, there are areas of the plan that reflect gaps, uncertainty and ambiguity. By being open and honest about these shortcomings, NAPP is building foundations for improvement and calls on stakeholder support in this endeavour

Introduction: Objective of the 2016 plan

Goals

• Maximise Fairtrade’s value to existing certified producers• Scale Fairtrade’s relevance to new groups

Approach

• Integrated planning and closer cooperation with the Fairtrade movement to increase certified Fairtrade sales• Better evaluation and communication of impact for increased credibility and influence• Develop producer/ market engagement programmes for major Asian commodities (consistent with Fairtrade’s

Theory of Change) in order to attract investment and scale relevance in a way that is complimentary to, but not limited by, existing Fairtrade certified markets

Measures of Success

• Growth (absolute and unit basis) of certified Fairtrade sales• Reduction in non-compliances in audits; producer feedback on quality and quantity of services received• Increased Fairtrade system investment in producer services in Asia and Pacific• Investment in innovative new producer/ market engagement programmes

Context: NAPP Organisation – organogramCEO

CFO+

Legal

Accounts

Admin

COO

Principal [India+]

Assoc. Principal, NE India

+Myanmar, Bangladesh,

Nepal

Sr. Associate, Supply Chain

Manager

Sr. Associate, North India

Sr. Associate, South India

Associate, South India [& NN Coordinator]

Principal [SL+]

Sr. Associate Pak.,

Sr. Associate Central Asia

Consultant, SL

Sr. Associate, SL

Associate, SL

Principal [China+]

Sr. Associate [China]

Principal [SEA]

Sr. Associate [Supply Chain Manager. SEA]

Sr. Associate [Vietnam]

Sr. Associate [Thailand]

Associate [Indonesia]

Lead - National Networks

Lead - Product Networks

PSR RM [Pacific] subcontracted to

FANZ

EA to CEO CMO {Market Linkage] MEL / Research Communications Partnerships

Note: This shaded area of the organogram depicts team members working directly with producers delivering support services

Executive summaries

The PSR team structure for India plus

Fairtrade presentation name | Date 12

Rakesh Supkar (COO NAPP)

Subhra Prakash Tudu

– Assoc. Principal

NE (Tea) + BD and Nepal

Sureel Singh – Sr AssociateSupply Chain

Support + Textile program + Rice

Suvechha Adhikari

– Sr AssociateRisk and Social Compliance (NE

Tea) + Textile program

Nalini Sampat – Sr AssociateKarnataka +

Textile program

Rohini Chandrasekaran

- Associate South (Tea,

Coffee, Spices, Textile)

Kuldeep S Chauhan

– Sr AssociateNorth and

Central India (Cotton & Textile)

Raju Ganapathy (Principal)

Executive Summary: India+ PlanGovernance, Networks & Partnerships• Support to national networks through identification of issues,

link support with implementation of programs• Support NAPP board members on a limited, need basis• Emphasis on building regional delivery partnerships

Thematic Generic• Staff trained on social compliance:

particular focus on “mainstreaming gender” in day to day delivery

• Responding to child labour and workers rights issues (key regional risks)

• Climate change programme particularly for coffee and cotton

• Significant effort designing and actively fund raising for programs as key means to scale regional relevance (in stagnant FT sales situation).

Textiles• FT principles training for 20 registered

traders with focus on workers rights; • Scope expanded to include module on

new standards requirements• Contingency for support to new

operators to become certified

Cotton• Focus on 3 POs that have social compliance

‘high risk’. All support on organisation strengthening and thematic support for child labour and gender

• Emphasis on CP to SPO transition• Focus on impact studies and producer profiles• Work on sustainable wage• Cotton network strengthenedTea• Work in North East focused on Workers’ rights,

child Labour and gender: • Resources inadequate for (brand) risk mitigation• Impact study undertaken. Lessons learnt, shared

and applied (industry credibility)• Emphasis on ‘Train the Trainer’ to scale up

support with very limited resources available

Coffee• All SPOs training on organisation strengthening,

identifying priority components of Coffee Development Plan. Plan initiated, funds shortfall

• COSP undertaken to reflect regional realities• Specific support to capitalize opportunities in

emerging Asia FT markets• Emphasis on assurance / compliance risks in

specific PO(s) due to rapid expansion

Sugar• SPOs support on new standards requirements• On-ground support for impact research

Fresh Fruit & Veg• Scaling up of mango producers and establish new supply

chain for domestic India Fairtrade market

Rice• Emphasis of support on CP to SPO

Production quality enhancement • Inclusion of minor crops (rotation) in

standards to leverage certification cost

Cotton

Tea

Coffee

Sugar

Fresh Furit & Veg

Rice

TextilesOther

Themes Generic

Management

Governance & NetworksAdvocacy & Partnerships

Other• Herbs, spices and nuts (>10 POs)• Scope opportunity for FT carbon credits

The PSR team structure for Sri Lanka, Pakistan and Central Asia



Sumedha Karunatillake (Principal)

Felix Wijesinghe

– Sr Consultant,Sri Lanka

Iresha Sanjeewanie

– Sr Associate, Sri

LankaSPO

Arutselvan Arumugam – Associate,

Sri LankaHL prducers

Aziz Rasulov – Sr AssociateCentral Asia

Shakir H Malik - Sr

Associate Pakistan/Iran

Executive Summary: Sri Lanka, Pakistan & Central AsiaGovernance, Networks & Partnerships• Support Pakistan, Central Asia and Sri

Lanka national platforms on good governance

• Management focus on regional partnerships

Thematic Generic• Mainstream gender work in all support.• Capture SPO best practice in modules

Sports Balls• 7 HL groups in Pakistan with over 6000

workers and >E150,000 premium• Support focused on management

understanding of FT, premium committee, health and safety and training of FT officers.

Herbs and Spices• Iran 1 SPO with high sales (>E100k premium),

with support work focused on organisational strengthening and premium use/ accountability

• Sri Lanka 6 SPOs support focused on leveraging access to technical services to improve profitability/ sales in face of low FT sales

Fresh Fruit and Veg• 3 SPOs in Uzbekistan support on pest

management, climate adaptation and gender.• 4 SPOs in Sri Lanka and 1 SPO in Tajikistan

support focused on management strengthening and Internal Control Systems.

• Contingency for certification advisory services for 5 new applicants (Sri Lanka and Uzbekistan)

Flowers and Plants• 3 HL gardens in Sri Lanka receiving basic support

with emphasis on relationship building.• Numbers of individuals low (<1000) and sales

limited but possible future country so support maintained to test this: promote to NFOs

Coconut• 4 SPOs in Sri Lanka with low numbers of

individuals and sales, but focus support on organisational development and value addition in response to increased NFO interest in category

Cotton• 3 SPOs in region (Tajikistan and Kergistan) and 1 applicant

in Pakistan: total sales currently very limited• Support work on organisational strengthening, addressing

child labour and climate change mitigation

Dried Fruit and Nuts• Mountain Fruits, Pakistan, key system

priority: support focused on standards compliance, premium use and transition to SPO

• Basic support services to 5 other SPOs in Sri Lanka, Tajikistan and Kergistan.

Tea

Herbs and Spices

Fresh Fruit and Veg

Flowers and Plants

CoconutCottonDried Fruit and NutsSports Balls

Other

Thematic General

Management

Governance and Networks

Advocacy and Part-nerships

Tea• Majority work on 32 tea estates; basic support to maintain

relationships. Sales barriers need to be addressed• Limited work with 4 SPOs on management and networking• Climate programmes and impact reports to establish USP

for tea in region to address lack of sales.

Other• Rice and cocoa in Sri Lanka (SOFA)• Honey in Uzbekistan, Tajikistan and

Kergistan

The PSR team structure for SE Asia + China



Erwin Novianto (Principal – SE Asia)

Hagung Hendrawan

– Sr Associate,

Supplu Chain Support, SE

Asia

Hung Tran – Sr

Associate, Vietnam

TBD – Associate,

Indonesia

Chen Fye Tham

– Sr AssociateThailand

Jun Zhao - Sr

Associate China

Executive Summary: South East Asia and China planGovernance, Networks & Partnerships• Strengthening of national networks in order to increase participation in representation, decision making

and governance• Identifying partnership in the region for supporting programs

Fresh and Processed Fruit• Capacity building program for better

quality and premium use focused in Vietnam, Thailand

• Build bridges to NFO for greater market access (fruit appearance)

• Reviewing standard to reflect sub regional reality

Coffee• Most significant product in the region. Focus on

keeping strength (Indonesia and Vietnam)• Support targeting management, premium use and

social compliance (gender, children)• Strengthening the role of the Coffee Network to

support better advocacy and market access• Greater emphasis on build producer/ traders linkages

and relationships to liberate market opportunities • Market development for coffee variety from the

region (Java Coffee, Instant coffee)• Build regional “Coffee Programme” and attract

external investment and scale Fairtrade work and impact (decoupled from certified sales)

Cocoa• Core work focused on supporting continued

certification of producers in Vietnam • Building certification in Indonesia• Link impact on gender, living income to secured

sales• Scoping and assessing market opportunity for

investment in a regional cocoa plan to enable impact at scale beyond current certified sales limitations

Tea• Key origin of China, Vietnam• Training on productivity, organic farming to improve quality

and point of difference for regional tea producers • Re-strategize working with markets (FMOs, Japan, ANZ) to

develop regional market linkages for Fairtrade tea

Banana• Scoping work on developing traders interest for FT

certified Fairtrade banana from the region; support from National Fairtrade Organisation colleagues.

• Supporting producers to get Fairtrade certification where opportunities identified.

Rice• Consolidate supply in Thailand

(most significant); focus on standard compliance issues

• Market access for Cambodia, Vietnam

• Standards related and contingency support new origins for mass market (cheaper) rice

Coconut• Increase certified coconut producers• Link to markets

Coffee

Cocoa

Banana

Tea

RiceCoconut

Fresh & Processed Fruit

Nuts, Herbs & Spices

Other

Thematic Generic

Management

Governance & NetworksAdvocacy & PartnershipsOther

• Limited work on sugar & nuts; no contingency for shrimp potential

Executive Summary: NAPP Central Support Services planFunction Key Workstreams Targeted Results

Monitoring, Evaluation and LearningHarveen Kour(1 role in NAPP)

• Monitoring and synthesis of system and external learning (audits, research, reports)

• Sharing and analysing findings and learning with producer support team to inform work approach and priorities

• Specific impact research on India and sugar• Specific evaluation focus on SPO (Indonesia and India), Tea (India and Sri

Lanka) and Household Surveys

• Effective and credible capture and analysis of impact information

• Lessons from impact analysis is used to influence plans and approach of Fairtrade’s work to maximise our impact

• NAPP is integrated into an effective and efficient MEL global network

PartnershipsMeenakshi Gairola(1 role in NAPP)

• Collaborate with the regional support teams and Fairtrade International to package programmatic priorities, and promote this to secure investment.

• Work with regional support teams to scope, develop and finalise partnership agreements to compliment/ leverage Fairtrade work.

• Prioritised and clear programme proposals that secure investment for scaling up of producer services work in Asia.

• Fairtrade is able to leverage our inputs with other partners.

CommunicationsBijal (PT)(1 role in NAPP)

• Internal communications material to promote lesson learning and cohesion as a widely disbursed Asia team.

• External communications to build understanding and awareness of Fairtrade’s work and impact in Asia.

• External communications that proactively and reactively respond to key risks.

• Well functioning and informed team internally• External understanding and confidence in the work of

NAPP leading to increased sales and partnership opportunities

National Networks (1 role in NAPP - Kuldeep S Chauhan)Product Networks(1 role in NAPP – Mariam Thomas)

• National networks focused on countries with sufficient critical mass of producers and actual/ potential sales: India, Sri Lanka, Thailand, Vietnam and China.

• Product networks focused on cotton, tea, sugar and rice.

• National networks enable effective identification of priority issues for governance and operations and act as nucleus for delivery of advocacy priorities

• Product networks enabling peer to peer support, forum for identifying category issues and solutions, and advocacy for market orientated barriers

Markets Function/ LinkageSenthil Nathan(1 role in NAPP)

• Alignment within Fairtrade services on markets (NFOs, FMOs)• Work with New Markets in Asia• Work on opportunistic basis on creating licensing opportunities within Asia

• Better coordinated, “global, settled system”• Supply Chain linkage and market access for producers• Market making

Core Services

The plans presented reflect ideal and adjusted work (to align work with available resources) to deliver producer support services necessary for continuity of certified sales projected in the Fairtrade Strategy 2016-20. The resourcing gaps assessed are:

The short fall (in Euros) in core producer support funds compromises effective management of regional risks and to deliver non-sales related benefits, eroding Fairtrade’s relevance to producers in Asia in light of low levels of certified sales.

IMPLICATIONS FOR FUTURE SERVICE DELIVERY: Future Ambition to Compliment Core Services with Programmatic Services Decoupled from Certified Sales. Even if this resourcing gap for core services is filled, projected incremental growth of certified sales in Asia will sustain relatively limited regional impact. To achieve impact at scale, thereby securing Fairtrade’s relevance and credibility in the region, requires a complimentary focus on programmatic work and investment in this work that is consistent with Fairtrade’s theory of change, but decoupled from certified sales. Key programmatic areas to be explored and developed in 2016 include coffee, cocoa and rice development plans in South East Asia, and Gender, Workers Rights & Climate in cotton and tea in Central Asia and India.

HR Ideal Days HR Available Days HR Gap Days HR Gap Cost Finance Ideal Finance Available Finance Gap Total Resourcing GapIndia Plus 1,756 1,020 736 147,200 134,600 97,600 37,000 184,200

SE Asia & China 2,074 1,335 739 147,800 240,000 117,600 122,400 270,200

Sri Lanka Plus 1,821 1,199 622 124,400 183,300 177,600 5,700 130,100 Central Off. Support 1,320 1,320 0 0 200,000** 0 200,000 200,000

TOTALS 5,651 3,554 2,097 419,400 557,900 392,800 365,100 784,500

Executive Summary: Core services resource gap implication

Executive Summary: Implementing and improving the plan

Internal NAPP Performance Review Management

The producer services team will quarterly report progress against delivery of the plan, links between planned activities and resources, and how the activities are delivering the intended impact outcomes. This analysis will enable NAPP to:

• Hold individuals to account for their delivery and team work, and so developing a high performing team• Be accountable to the system for its KPIs, and provide the evidence and objectivity necessary to refine the services delivered

to achieve targeted development outcomes. This is vitally important as NAPP manage a cultural change from “certification advisory” to “impact orientated” producer services, and connect the various producer support functions effectively under “one roof” following integration of Producer Services and Relations into NAPP from 1st January 2016. This will not be an overnight process of change!

• Systematically accumulate evidence based knowledge to support informed system wide planning and resourcing decisions, and increase credibility to secure external investment and partnership commitments.

NAPP Review with International ColleaguesNAPP will invite Fairtrade colleagues internationally to participate in an open format review of delivery against plans to ensure:• New information from global colleagues can be assimilated, and plans adjusted accordingly• Operational opportunities or challenges with global colleagues can be identified and immediately addressed so

interdependencies remain clear and well managed• Enhance system wide understanding of regional opportunities as context to the global planning and resourcing process

Summary Asia Plan resources: ideal vs adjusted resources & implications

Summary of Ideal vs. Available Resources and Gap (Core Certification)

The summary below provides summary of the gap between available resources and ideal resources to deliver a core set of producer support services necessary for continuity of certified sales projected in the Fairtrade Strategy 2016-20. This resourcing gap does not include investment required to scale Fairtrade’s relevance in Asia to consumers and producers: this is complementary work beyond core services is covered in the following slide.

Summary Implications of Resourcing Gap

Contact time with producer organisations and contracting of specialist skills has been scaled back. The weakened relationships and provision of training arising when set in a context of low regional Fairtrade sales undermines Fairtrade’s relevance and influence with producers. The cumulative result is likely to be:• Reduced ability to define and manage systemic risks, compromising market confidence and leading to continued low sales• An erosion of producer confidence in Fairtrade to deliver impact, with knock on effects of relevance to companies and

consumers

HR Ideal Days HR Available Days HR Gap Days HR Gap Cost Finance Ideal Finance Available Finance Gap Total Resourcing GapIndia Plus 2,181 1,240 941 188,200 134,600 97,600 37,000 225,200

SE Asia & China 2,074 1,335 739 147,800 240,000 117,600 122,400 270,200 Sri Lanka Plus 1,821 1,199 622 124,400 183,300 177,600 5,700 130,100

Central Services Support 1,320 1,320 0 0 200,000** 0 200,000 200,000TOTALS 6,076 3,774 2,312 460,400 557,900 392,800 365,100 825,500

** 200k Central Services budget deficit needs to be defined tested – working assumption for now


Future Scope and Approach to Producer Services in Asia – Emphasis on Programmes

The current allocation of Fairtrade resources for producer support and emerging Fairtrade Marketing Organisations in Asia reflects relative existing importance, and not future potential.

Whilst impact for the producer individuals currently benefiting is important, in terms of absolute numbers in the continent the breadth and depth of impact is currently negligible. Incremental growth in Fairtrade certification (particularly if this is in existing supply chains) will not enable Fairtrade to deliver it’s vision of organised farmers and workers benefiting from trade in any significant numbers.

To scale impact will require:• Defining and promoting a set of producer service programmes that attract the investment of companies and

governments, delivering on mutually important issues of farmer organisation, gender equality, child labour, workers rights and climate adaptation. These programmes will need to be decoupled from certified sales to achieve impact at scale, but must be aligned with Fairtrade’s theory of change.

• Investment in local Fairtrade markets, reflecting Asia as both a continent with great need (producers) and fast growing GDP per capita (consumers).

Therefore, in addition to shoring up core certification producer services, during 2016 NAPP will also focus on building programmes that have the potential to deliver impact at scale, and securing investment for these.


Potential Programmatic Areas to Deliver Impact at Scale in Asia and Next Steps

Particular areas of opportunity that require further assessment include:

1. Organisation of farmers in Coffee, Cocoa and Rice in South East Asia2. Workers Rights, Child Labour and Climate Adaptation in Tea & Cotton in India and Central Asia

NAPP will work internally with National Fairtrade Organisations, Global Product Managers and Thematic Advisors and externally with companies and governments to package a set of programmes (applying Fairtrade’s Programmatic Approach) for investment by governments, businesses and donors. NAPP’s Chief Operating Officer will lead development of Programmes, and NAPP Central Services Team will lead on secure investment in these programmes.

By June 2016, NAPP aim to have formulated a draft set of programmes. By Q3 2016 these will be finalised and by Q4 2016 NAPP will target secured funding for one programme, for delivery in 2017 (realistically allowing settling in of the producer services team into NAPP during 2016).

End of Presentation

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