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Mexican Startup Goes Beyond Fair Trade

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Leadership & Transparency
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Editor's Note: This post originally appeared on Unreasonable.is

By Cayte Bosler

The hype of fair trade products and the promise of their goodwill careened when the majority of U.S. people polled in favor of “renegotiating” the model trade agreement. The charge of pitiful labor conditions, poor wages and unfair trade agreements is a convoluted problem laid at the doorstep of NAFTA, now nearing its 23rd year with a more than questionable track record. But Semina Boni Terra doesn’t prioritize competition in the hostile trade environment between Mexico and U.S. corporations.

Montse Castro, founder of the Mexican startup, re-imagined the agriculture business model as fair trade in practice, not promise—on a national level—to curb food poverty and preserve cultural and economic integrity in rural Mexico.

“We work hand-in-hand with small-farm producers located in the state of Morelos, Mexico, cultivating Chia Seeds, developing synergies with government entities and the experimental agricultural fields of the Faculty of Agriculture of the Autonomous University of the State of Morelos (UAEM),” explains Castro who works with 20 farmers and has increased each farmer’s profits by 20 percent since 2012. “It’s a joint venture,” otherwise known as an agglomeration economy, “where the farmers benefit from technical training and assessment, input, generating aggregated value and commercialization of their products.” Semina invests between 45 to 55 percent of total costs. This brings stability to fluctuating economic and social factors governing trade. If environmental factors, for example, affect the crops, farmers lose less.

When farmers cluster together, cost of production declines significantly. Even with competing brands in agriculture, there are advantages because the cluster attracts more suppliers and customers than a single farm could achieve alone.

“Our brand is sold as individual packages but we continue to sell directly to businesses,” says Castro. “Organic crops are reaching a better price in the market, between 20 to 40 percent more than conventional crops. We are trying some options to transform chia seed and Amaranth to ready to eat and ready to drink, we want to develop healthy convenience food.”

In Mexico, 20 million people live in food poverty, 25 percent of the population do not have access to basic food and one out of five children suffer from malnutrition. International fair trade corridors do little to ensure security during economic fluctuations and offer almost no structural support such as access to new technology and education on best practices. Numerous investigative reports find practices ripe with exploitation. The cycle deepens: US companies do little to enforce social responsibility guidelines that call for basic worker protections such as fair pay practices. As a result, many Mexican farmers migrate north to the US for better wages.

“Since I started studying sociology I realized the problems that my country has been dragging for a long time ago, but nobody proposes a change,” says Castro of her motivation. “After analyzing the current situation of the Mexican fields, and the chronic degenerative illnesses that commonly affect Mexican people, I decided that the needed course was clear, and understood that food is an essential resource for the survival and progression of human beings, and I would have to focus on the production of it. This allows a significant impact on society; just as the phrase says: we are what we eat.”

Not all of Mexico’s agriculture problems can be blamed on NAFTA. Even in a more direct supply chain with just oversight, higher prices than conventional foods for fair trade, organic options can be a difficult sell.

“It’s hard to maintain brokers’ loyalty because their driver is price, which means their are not able to pay an extra price for social impact,” says Castro. “We decided to start selling in a business to consumer channel.” Their online store offers individuals healthier, socially responsible options. Without the organizational help of Semina Boni Terra, these rural farmers likely wouldn’t reach such a diverse market or achieve brand recognition.

“In Mexico 24 million people are living in rural areas and 65 percent of them are in a poverty situation,” explains Castro. “Agricultural activities are undervalued and they’re no longer profitable.”

“I wanted to design a innovative and social impact solution to rescue the Mexican countryside and all the people who is living there. This is why we build bridges between Mexican farmers and consumers through fair trade and production along with the distribution of rich, nutritious, and natural foods. The chia seed is our main crop because we care and respect the natural biodiversity of the country.” Of future needs, Castro says more investment in technology and infrastructure to make labor more efficient is priority.

As reported by the New York Times, after promising to renegotiate Nafta, the Obama administration pushed the Trans-Pacific Partnership back in 2013. The Pacific pact, which is a regional Nafta-style trade agreement, grants even greater privileges to transnational corporations and stands to exacerbate problems for Mexico and other developing countries.

We can stop holding our breath for international fair trade agreements to act as the white knight the world once hoped for. Fortunately for rural Mexico, Semina Boni Terra’s solution is local empowerment. NAFTA and distant governments can be taken out of the equation, and our fingers can point towards supporting them directly, not at bad policy. Check out their store here.

Image credit: Semina Boni Terra

Cayte is an Unreasonable correspondent. She collects stories and lessons from and for entrepreneurs dedicated to solving the world's most pressing problems. She writes on a variety of subjects including science, technology, international development, the environment and travel.

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