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I'm delighted to be here today.
Over the last ten years, Abantu has helped thousands of African
people and communities, particularly women, to build a better life - a
life out of poverty for themselves and their families - by providing
them with the training, skilling and resources they need.
We in Government are your partners in this agenda.
We know we can't have security around the world without prosperity
around the world.
So it's a pleasure to have the opportunity to speak to you this
morning.
When I was first appointed Secretary of State for Trade and Industry
and Minister for Women, I was asked by a Chief Executive of one of our
leading companies what trade and industry had to do with women! With
women making up half the population, almost half the workforce and being
responsible for more than half all consumer decisions, it should have
been obvious.
We believe in equality as a matter of principle. But we also know
that, in a world of increasing competition, economic success and
equality go hand in hand.
Because still, the face of poverty and disease, malnutrition and death
around the world is the face of a woman and her children.
1.2 billion people in the world are without adequate food, water,
healthcare or education. 7 out of 10 are women.
42 million people in the world have HIV/AIDS. 6 out of 10 are women.
And women are the fastest growing group of sufferers.
More than half a million women die in pregnancy and childbirth every
year. Half - in Sub-Saharan Africa.
The only way of tackling this issue is by spreading prosperity.
That's what I saw in India - with ICICI bank providing help for low
caste women. Teaching basic finances and providing finance for
micro-businesses.
In Bangladesh - with the Grameen bank and the Government are helping
women in Bangladeshi villages set up new enterprises.
In Nong Ta Kai village in north-east Thailand. Years ago, the women
there worked in rice fields, their only hope of escape from poverty to
flee to the city, vulnerable to exploitation and to prostitution. Now,
they have come together to create their own silk-weaving co-operative.
They used to live in old wooden shacks-some that were still there.
Today, they are used for storage. Now they live in modern two-storey
houses that those women have paid for with their own money from their
own work.
Today I want to talk about how, working in partnership, in the really
strong coalition we're now developing, between Government, business,
consumers and NGOs, we have the opportunity to give everyone a chance to
contribute to and benefit from rising world prosperity.
At the moment, not every does have the chance.
Take what's happening with sugar in Mozambique. It costs us twice as
much to make sugar here in the EU as it does in Mozambique.
Yet, because of our subsidies on sugar exports and the barriers to
imports of cheaper sugar to the EU, Mozambique's industry employs half
the number of people it should - in a country where 75% of the rural
population live in abject poverty generates $150 million less than it
should - in a country the EU is giving $136 million a year to in aid.
So we are giving with one hand and taking away with the other.
In the US, cotton producers received nearly $4 billion in assistance
in 2001/02. This is more than the entire GDP of Benin - a country where
the cotton industry, now in crisis, accounts for 85% of exports and 20%
of total income.
We have an opportunity to tackle agricultural subsidies now within
the EU as we review the CAP. And, with the mid-Round WTO Ministerial
Conference in Cancun less than 100 days away, we and our EU partners
need to make some bold decisions. To place EU agriculture on a longer
term more sustainable course and open up our rich markets so that
producers in poor countries can share the benefits.
We know that liberalisation can be a force for good. That trade can
be the best route from poverty.
But we can't preach liberalisation abroad if we practice
protectionism at home. Our protectionism is distorting markets
throughout the world.
Agriculture makes up over 20% of GDP in Sub Saharan Africa as a
whole, and 40% or more in a number of countries there. Yet we in the
developed world are giving them no chance to compete because of the huge
subsidies we give to our own farmers - $106 billion from the EU in 2001,
$95 billion from the US. $59 billion from Japan.
Together those sums equal over 80% of the entire GDP of Sub Saharan
Africa.
1.2 billion people in our world live on less than $1 a day. Yet we
pay our dairy cows in Europe twice that amount under the CAP.
But there is more we can do to help as well - particularly at a
grassroots level.
Like Abantu does. For example, with your workshop for Coffee and
Sugar Cane cooperative societies in Kenya, giving knowledge and skills -
in agriculture, financial management and project management.
Coffee prices hit a 30 year low last year.
Coffee provides a livelihood for 25 million coffee farming families
around the world. In many situations, current prices are so low that
these farmers aren't even covering production costs.
Coffee is one of the most valuable primary commodities in world
trade. In many years, 2nd only to oil as a source of foreign exchange to
developing countries.
And Africa has fared worse than most. Between 1970 and 2001, world
coffee exports rose from 53m to 90m bags but African exports fell from
17m to 13m.bags.
And within Africa Burundi, Ethopia and Uganda are doing particularly
badly because of their heavy reliance on coffee production to generate
export earnings.
Falling volumes and prices mean less money to buy essential imports.
Africa's coffee exports in 2000 could pay for only 37% of the volume of
imports that they could buy in 1970.
There are many theories for the slump in coffee prices. The one we
hear most often is how Vietnam - which ten years ago had no presence in
the world coffee market - is today the second biggest exporter in the
world.
You can't blame Vietnam - they're trading themselves out of poverty.
Yes the market is in oversupply - but we will not get to the right
solutions by allocating blame.
Some NGOs, like Oxfam with their Coffee Rescue Plan, have done a huge
amount of work to draw the plight of coffee farmers to the attention of
the world. Calls to make the International Coffee Organisation's (ICO)
quality standards work better to help poor farmers shift into
alternative livelihoods definitely merit serious consideration.
However you will not be surprised to hear that that I do not believe
that introducing a system of quotas is the right response to the crisis.
We must be realistic. We live in a highly competitive world
characterised by rapid developments in technology, communications and
logistics. Consumer tastes and expectations are also changing and we
need to adapt to these.
The root of the coffee crisis is oversupply and, barring a dramatic
expansion in consumption, this situation is likely to persist for some
time to come.
For some producers, diversification out of coffee will, ultimately,
be the only realistic option.
Having said that, we need to look much more closely at improving the
market power of commodity producers. If farmers were in a stronger
position they could capture an increasing proportion of the value of
their crops.
To tackle this, I set up an Industry - Government Working Group to
explore ways of deepening and strengthening the relationship in
commodities, including coffee, between producers and the industry.
The report of the working group will be out in July. But I can share
some of the preliminary findings with you today.
It's clear that many commodity producers are disadvantaged by having
to operate on an individual basis. For example, their inability to
aggregate their produce with other producers makes them less attractive
to potential buyers on account of the higher transaction costs involved.
They are also likely to be less able to negotiate fairer deals with
other market intermediaries on account of their weak bargaining
position. Even where they do belong to farmers associations or other
membership or group-based arrangements, these may be weak, with their
potential undermined by a lack of requisite technical and organisational
skills, including the ability to exercise proper collective action over
the management of the group's financial affairs.
Let me give a simple example. At the moment, some producers are
selling just one or two bags of unprocessed coffee beans as and when
they are picked,. They have to take the price offered at that time -
however low it might be - because they don't have access to appropriate
washing or drying facilities; or because they don't have access to
appropriate knowledge or facilities to store them properly.
I can announce today that DTI and DFID are looking to explore the
feasibility of setting up a pilot scheme - working in partnership with
the industry and potential suppliers in a developing country - to help
empower their participating farmers by facilitating enhanced access to
the requisite tools and skills needed to operate in an increasingly
competitive global marketplace.
We need to work out the details and we need to get as much buy-in as
possible from our industry partners. But the working group has fostered
a good working relationship.
For example, Starbucks have said that they want to work with us to
support the production of high quality arabica coffee as part of this
pilot.
So as you can see, we can and will make a difference. Working in
partnership.
With producers working together. So that farmers aren't selling one
or two bags of unprocessed coffee beans as and when they are picked -
but instead are co-operatively producing a hundred bags of beans that
have been washed and dried. And, with somewhere to store beans, they are
able to make commercial decisions about exactly when to sell their
produce. So they also get better information about price movements so
that if the price is too low today - wait until tomorrow.
You can do this if you have the safety of working together. An
individual farmer, living from hand to mouth, would never have such a
luxury.
There are simple yet effective measures that could make a huge
difference.
Let's think where this might all lead. Access to financial and other
important services, including price risk insurance and other risk
mitigation products offered by commercial providers become much less of
an obstacle where farmers are members of reputable, well-managed
producer organisations. Organisations that have demonstrated the
capacity of working together collectively, innovating and adapting to
changing market conditions.
Oxfam's report shows that a farmer in Uganda might get 14 cents for a
kilogram of green beans, assuming they did no processing. The price of
green coffee arriving at the exporter's in Kampala is 26 cents - almost
double the price paid to the farmer for his unprocessed beans. And when
the coffee is finally loaded onto a ship its price typically rises to 45
cents - more than three times the price paid to the original farmer.
I'm not suggesting that farmers can capture all of this increase - but
they could capture a substantial chunk of it - if they were organised
better.
Earlier, I talked about the power of trade in alleviating poverty. At
the same time, I acknowledged the challenges facing many developing
country producers and others who are linked, directly or indirectly, to
the international trade in agricultural commodities.
We're exploring a range of practical ways to make sure the benefits
from participation in this trade reach those who most deserve it. I know
we need to think more strategically - beyond a narrow focus on
traditional export commodities. That is why diversification, in both a
household and national context, is so important,
We've earmarked £4.3 million as a contribution to the Second Account
of the Common Fund for Commodities (CFC). The Common Fund for
Commodities has an important role to play in actively promoting
diversification as the basis for expanding trade opportunities for
farmers.
A globalisation that only works for the minority of people in a
minority of countries is bound to fail - and deserves to.
If you give people a chance in life (and it doesn't matter whether
it's an African Caribbean living in London, a Bangladeshi living in
London, a group of women weaving silk in Thailand or a family of coffee
producers in Africa), they'll take it.
Our role is NOT to try and isolate African producers from market
forces. But it IS to help them to strengthen their position in the
market, or if necessary help to facilitate their participation in other
markets.
We need to help producers operate more effectively in their
organisations. Help them improve their bargaining power. Ensure they can
access information, and ensure they are able to use useful market
instruments like price insurance where appropriate.
Thank you.
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