A Slice of the Business Pie for the Poor and Powerless

Times Staff Writer

In Bangladesh, jute products made by a women’s cooperative are paying for children’s shoes and, for the first time, letting those youngsters go to school.

In Nicaragua, refugees from Guatemala and El Salvador are making painted wood boxes, keeping alive their native arts and at the same time earning money to send home to their families.

In Mozambique, farmers are negotiating for export of their traditional wood carvings--with the assurance that they will not be asked to cater to the American market by whittling spice racks and salt and pepper sets instead of authentic figures and animals.

An Economic Boost


In each instance, artisans in developing countries are being given an economic boost--and an infusion of dignity--by an Indiana-based organization calling itself Friends of the Third World.

Friends, and its network of affiliates, call themselves alternative trading organizations and their mission, as president and administrative coordinator James Goetsch sees it, is to make changes in a system of doing business that “has left some people out,” to find a practical way to “solve the problem of poverty and injustice in a permanent way.”

Under the commercial system of export, Goetsch points out, the people who produce the goods in the Third World get back only about 10% of what the products bring on the international market. Under a system of alternative trading, the producers can expect to see about 50%.

These alternative traders are not out to strike down free enterprise, but they are dedicated to the proposition of giving the poor and powerless of the Third World--and America’s have-nots--the slice of the pie that in mainstream trading goes instead to middlemen.


Guaranteed a Fair Share

What that means is that when the American consumer buys tea from Tanzania, cashews from Africa, wind chimes from The Philippines, potholders from Guatemala or corn dolls from Appalachia through an alternative trader the people who produced those goods are guaranteed a fair share of the profits.

And, equally important in the view of alternative traders, the American consumer gets an education with each purchase--a label explaining economic/social/political conditions in the area of origin.

As Goetsch explained, “Very few people are really helpless” but many in the world are starving because they do not have access to the system. “We’re trying to provide that opening.”


There was a bit of ‘60s deja vu at last weekend’s alternative trading conference at Loyola Marymount University--wire-rimmed glasses, Birkenstock sandals and all. These new-age traders came from Puerto Rico and Massachusetts and Maine and El Paso and Santa Ana and Albuquerque to talk about networking and better marketing strategies and production glitches.

They shared a vegetarian banquet (eating less meat means more grain for food in developing countries) and, in small group discussions, they shared their concerns about things such as how to better sell their products without stooping to crass commercialism, how to obtain capitalization without going to the big banks and how to ensure some kind of size uniformity in clothing imports from the Third World.

As one participant noted, when you’re dealing with imports from these countries, “an extra large shirt could be from small to extra large.”

Should alternative trading organizations go into shopping malls? Should they continue to rely on churches, together with fairs and bazaars, as a primary outlet for the goods they buy from the Third World? For the masses in America today, one participant noted, “their church is the mall.”


Importance of Education

And they agreed on the importance of educating the American consumer to quality imports in the face of competition from quick-buck entrepreneurs who, as one alternative trader put it, “steal designs from Mexico, get them mass-produced in Hong Kong and sell them.”

Sales have been somewhat sluggish for alternative traders. There are language barriers, problems with inferior or uneven quality, late deliveries (a disaster at Christmastime), the reluctance of Third World producers to explore new ideas for the American market, high prices and even pest infestations in shipments.

As marketers, said Angelika Bensch of Fort Wayne, “We’re doing a miserable job.”


But that is not to say that enthusiasm for the alternative trading concept is flagging or that there are not small successes. A financial statement for Friends of the Third World for the fiscal year ending last August showed sales of imported crafts and foods close to $350,000.

That includes mail order and walk-in trade at the shop in Fort Wayne and at seven Friends-affiliated shops, among these Third World Handarts in Orange.

The concept, which started in Europe a decade ago, is slowly catching on here, alternative traders believe. Now they need to get the message out; indeed, a media campaign was one of the discussion topics at this conference.

Third World Motto


But “we don’t consider ourselves in competition with the commercial gift shops in a big way,” Goetsch said. “We’re something like UNICEF. They sell Christmas cards. So does Hallmark.”

Friends of the Third World, a private nonprofit organization, has a motto, borrowed from Elizabeth Seton, the 19th-Century American Roman Catholic leader: “Live Simply So Others May Simply Live.”

Soft-spoken Jim Goetsch and his wife, Marian Waltz, who met on a hunger walk in Detroit in 1972, appear to abide by that motto. As president/administrative coordinator of an organization that depends almost solely on volunteer labor, he receives a stipend for personal expenses, medical insurance and rent-free housing.

Friends is the outgrowth of a students’ anti-hunger movement in Fort Wayne in 1970 and Goetsch, 37, was one of its founders. Today, it operates out of a century-old mansion in downtown Fort Wayne and, last fiscal year, its 13 projects, which include the gift shops, a printing cooperative with job training, Whole World Books, the Union of Third World Shoppes and alternative food marketing reportedly grossed $500,000.


One goal is to return half of the net income from food and crafts sales to the producers. In the commercial world, Goetsch noted, the exporter might mark such goods up 400% but none of that markup is realized by the people who turn out the products. The commercial gift shops, he said, “may buy an item for 50 cents and sell it for $3. We may buy it for 75 cents and sell it for $2.”

Distinctive Design

Goetsch, who was wearing a blue and white cotton shirt made in Nigeria, toyed with a cross around his neck, a distinctive design that, he explained, was by a craftsman in Milwaukee who fashions the crosses from horseshoe iron. Then he added, “But this person isn’t poor so we don’t sell these in our shop.”

One of the continuing problems encountered by the Fort Wayne shop, opened in 1973, and its affiliates is to bridge the gap between Third World craftspersons (80% of whom are women) and Western consumerism and the expectations of a high-tech society.


Goetsch told of receiving a shipment of vests from Peru, all of which were too small for even a child. Future such problems were averted when Friends sent the vests back with a sample pattern.

The producers with whom alternative traders deal are small and often, Goetsch said, “we are the first export customer.” They are not in the business of organizing Third World co-ops--rather, by word of mouth, the producers find them. Several times a week, Goetsch said, he receives a letter from basket makers or others in a developing country.

There are criteria established by Friends. “We’re concerned with the producer in the same sense the commercial world is concerned with profit,” Goetsch said. “They must be low income. We prefer that they be cooperatively organized. And we want to buy from producers who are interested in their community” and will return some of the proceeds to a community project.

He pointed, for example, to the Bangladesh women’s cooperative where the women meet together to make their jute products and also bring their children, thus creating a child-care facility. “Normally, women there aren’t allowed to work outside of the home,” he said, but they get around it by providing their own child care.” Still, he noted, “Very often they have to get permission from their husbands to do it.”


It is a small way of effecting social change, he said--"These women are not going to become revolutionaries and take up arms but they are going to be able to manage money.” And they are funneling some of their profits into a health-care project.

Ripe for Expansion

Forty countries, including the United States, and 50 to 60 producers are represented in the Fort Wayne shop, including nine countries exporting food products, a category Goetsch wants to expand. “There are a lot more farmers than there are craftspeople in the Third World,” he said. “Sixty million of them grow coffee.”

Coffee from Nicaragua is marketed by alternative traders who get around the U.S. trade embargo by having the producers ship their coffee beans to The Netherlands for processing before shipment to this country. Goetsch points out that this is not an original idea, that a number of large U.S. companies continue trade with Nicaragua through a third country.


But he insists that Friends is not making a political statement, rather “our purpose in trading with Nicaragua is to try to show that people can attempt to solve problems in a peaceful way. As long as we know poor people are receiving benefits, we’ll work with Leftist or Rightist governments. (In the latter category, for example, is Uganda).”

(Alternative traders point out that 20 million people in the world earn their living from coffee, many of them making only $400 a year while the big roasters reap huge profits. Friends’ coffee project, though just a drop in the cup in the world’s leading coffee importing marketing (about 50 tons of beans out of a total of 1 million tons), adds up to about $220,000 a year gross and 40% of the net is returned to the growers).

Friends of the Third World will probably be selling its first American food product, wild rice hand-harvested from natural stands by the White Earth Chippewa Indians in Minnesota. These native producers face stiff competition from big food processors that in the last 20 years have been paddy-harvesting the rice (in California, among other places) to cater to the American gourmet market.

Recently, the dipping dollar has created new problems, forcing Friends to increase prices on coffee and crafts. Another problem is the strict new quotas on import of textiles, to take effect July 1. Mexico is expected to be one of the exporters hardest hit but others are Taiwan and Singapore. Said Goetsch, “Our poor disorganized producers are now going to have to go to the U.S. embassies and get a quota portion. We’ll have to teach them how.”


Mario Carota came to the conference to exhibit clothing made by members of the Federacion de Cooperativas Cristianas, which he and his wife, Estelle, established in Toluca, Mexico two years ago.

Carota, a Canadian citizen, formerly lived in Santa Cruz County where about 25 years ago he befriended some of the braceros or guest workers from Mexico. The Mexicans, in turn, invited the Carotas to their country and, Carota said, “We went down to see what the family could do to work with the poor. That’s how we got hooked.”

When the Carotas reached their “senior citizen days,” Carota, now 65, said, “we thought, ‘Why don’t we go back down to Mexico”’ and lend a hand. “I’m quite worried,” he said, “about the violence going on between the rich and the poor.”

Today they live in Toluca, where, with two of their 19 children (six are their biological children and 13 are adopted, among these several from Mexico), they run the cooperative whose member co-ops are making clothing and furniture, weaving wool and baskets and operating a corn mill and a log-cutting operation.


“We’ve created about 100 new jobs,” Carota said, in a country where unemployment is at about 40% (20 million Mexicans, many of them young, are jobless) and where migration to the cities in the futile hope of finding work has broken up families and deprived rural families of needed labor.

‘Christian Co-op’

The Carotas are Roman Catholics and, he emphasized, theirs is a “Christian co-op,” with prayers said at every meeting. He speaks in spiritual tones of “the great hunger of the poor to work together as brothers.” But he speaks in a very pragmatic fashion of the revolving fund fed by friends on both sides of the border that makes it possible to give these co-ops start-up funding. Payments from sale of their California property pay the Carotas’ own bills.

Carota shook his head and said, “Things are so tough in Mexico.” He had come to the conference to make contacts, in hopes of establishing new alternative trading markets for his cooperative’s workers.


Raj Ramaiya, who was born in Zanzibar, worked as a computer programmer in San Francisco and now lives in Stockton, had come to tell people about REAP, the Rural Economic Alternatives Project to aid small farmers. (Archbishop Roger Mahony was one of the early sponsors, he pointed out).

In the San Joaquin Valley, Ramaiya said, “Family farms are going under. We’re trying to create more small family farms (two to five acres). These are mostly ethnic people who grow things that 10 years ago didn’t exist in supermarkets” such as cilantro, baby corn, lemon grass and hot pepper leaves, what Ramaiya likes to call “post-sprout” food favorites.

REAP, which started in 1979 and serves San Joaquin, Contra Costa and Sacramento Counties, has established a farmers’ market and a farmers’ co-op and helps small farmers cope with such realities as credit, rising costs of seed and fuel and loss of prime lands to development. One of its concerns is assistance to Southeast Asian refugees who are not always welcomed as competition.

Alternative Marketplace


Paul Freundlich had come to the conference in his role as director of Co-op America, a Washington-based nonprofit membership association dedicated to building an alternative marketplace. Its catalogue of mostly domestic products includes Amish-style work pants with suspenders, books on tofu cookery, herbal first-aid kits and hammocks.

Co-op America, now four years old, has 350 organization members, 25,000 individual members and a gross revenue of about $8 million annually to its producers, Freundlich said.