Aid through trade

Press, 7 October 1980, Page 22

Aid through trade

By

KARREN BEANLAND

* Trade Aid (N.Z.) Inc., "started' in a Christchurch backyard in 1972, when a group of people gathered lo consider what they could do to help trade in developing countries.

Since then the organisation, which has its national office and warehouse ■in Wilsons Road. Opawa, Jias grown until last year ■it sold $360,000 worth of handcrafts and tea “through its "Third World” -shops. Now it deals with 90 producing groups in 30 developing countries in Asia, Africa, South America, and the Pacific. j The chairman of Trade Aid (Mr A. R. Cottrell) said the organisation was set up with the idea of helping groups who were ■trying to help themselves. The organisation provided a form of aid, but it aimed to teach groups in developing countries how to find markets in Western countries such as New Zealand.

"It is all very well to send an agricultural expert to somewhere like Western Samoa if you do not buy the produce in re-

turn,” he said. The group also aims to promote fairer trade bei tween the developing countries and New Zealand, and to show that there are injustices in New Zealand’s present trading links. It argues that the present unfair trading relations are a ’cause of poverty in developing countries. ’ ’ Mr Cottrell said the organisation works by establishing contacts with a Suitable producer group. It •gets a sample of the goods, and looks at their ,viability on the New Zea-, land market.. “ If the products are not ■Suitable for the market here, Mr Cottrell said the group will suggest im--provements to the producers. When they are sure pf a market here, an order ■is placed with the producers. '

•J. Trade Aid deals only <with the importing of Joods into New Zealand. hey are sold through the ■Third World shops, which jre organised by voluntary ■labour. / There are now 21 Third -World shops throughout ■?New Zealand,- manned by jan estimated 1200 volunteers. All Trade Aid’s Tnoney goes into buying vgoods from the producer ‘groups. The shops, which" about $2OOO for "stock plus the cost of . setting up premises are completely funded by money •raised in the community, sh 'Trade Aid had a $13,000

in to help the existing producer groups. Christchurch has two Third World Shops. One, now sited in the Shades Arcade was the first such shop to be set up in New Zealand. The other is on Riccarton Road. Mrs Gaye Sansom,, one of the organisers of the Shades Arcade shop, said the shop is different fr«m other Third World shops throughout New Zealand because it was set up with help from Corso. Unlike the others, it did not heed funds from the community to buy stock and find premises. The shop was set up in Barbados Street in 1972, in rooms downstairs from the former Trade Aid warehouse. It was opened because people kept coming to the warehouse to buy goods which could only be sold through a retail outlet.

The shop was put out of business by a fire in 1978, and the group decided it was time to find a new home. It had to move to brand new premises because it

could not afford to pay for the goodwill in an existing shop. Although costs were kept down as far as (possible by using recycled building" materials and voluntary labour, the move cost the shop $2OOO, which was met by raising a loan. Corso gave $4300 worth of stock in the form of a loan. In the last few years, the shop has built up its turnover from about $4OOO a year to $52,000. Mrs Sansom says the Riccarton shop has "a turnover of about $30,000.

The Shades shop, whicn does 25 per cent of its trade during Christmas, should have a $60,000 turn-over by now. but it has felt the pinch of the tight economic climate. The shop « run by a team of about ’45 volunteers. At one stage it employed a full-time assistant, but this was. stopped to save costs.

Mrs Sansom says some of the Third World shops around the country have 100 volunteers, or even more. But the Shades shop found it better to have a smaller team. Because they each work ■ more often the voiuhteeis get to know the products better and can explain the aims of Trade Aid to their customers.

She says the volunteers make excellent, shop assistants because they

are interested in w.hat they sell. An unexpected advantage has also come from the shop, says ’ Mrs Sansom. Many of the volunteers are solo parents, and their work in the shop gives them confidence and experience to take on a job. Seven of the volunteers went on to take permanent jobs in other shops after working in the Shades shop last year. Despite its $52,000 turnover last year the Shades shop made only $lOOO profit. Mrs Sansom says it will be at least four years before it can repay its loans. This is because the shop operates with just enough mark-up on ' goods to cover its running costs. Any profit is used to build up the stock. . . Mark-up varies depending on the goods. “If the producer is in desperate need then we will mark those goods down to sell them, and we try to recoup that on merchandise ■which is reasonably priced, plentiful and popular,” she said.

When the shop has repaid its loans, any surplus funds will be fed back into Trade Aid to start more overseas projects.

The shop has extended its clientel since it moved to its new site. It is popular because it has exotic goods that are not available elsewhere. Volunteers man stall's at fairs and other functions to create interest in the goods. Mrs Sansom says it is better to be face to "face with people, because they are suspicious if the shops start to advertise.

. Last year, the Shades shop did a pilot promotion of jute, and this has been followed up around the country recently. One successful Trade Aid venture was the setting up of a caravan based in Rangiora, which is taken to country towns, fairs and shows. It sold nearly $5OOO worth of goods in 1979. •Mrs Sansom says she became interested in Trade Aid after living for several years in the Philippines "and Kenya. “I have been in those places and there is real poverty, and there is no end to . what we can do,” she said. She says there are similar shops. overseas but they do not try to educate the public as the shops here do. ’ “We want to tell the New Zealand people about the need for fair trade; that a poor im cannot .

tighten his belt as much as we can; that a poor man has to be paid promptly otherwise he cannot pay for more materials.”

“We are promoting to the Third World the advantages of trading instead of our just supporting them through financial gifts,” she said.

Mrs Sansom said a real partnership relationsip was developing between the Third World shops and producers. A factory producing jute products in Bangladesh is dependent on Trade Aid for its big orders each year but' the jute products are the shops’ best selling items, so the shops depend on the jute.

The producers are encouraged to venture into commercial markets once they have started trading throbgh Trade Aid. But Mrs Sansom says there are problems. The jute company took two large orders from Australian firms. They were worth $lB,OOO, but the producers ' were nearly crippled becaur? the companies still had not paid their bills nine months later.

Another difficulty is that Trade Aid can almost drive itself out of business. One group in Nuie Island made popular bas-ket-ware. But because it was popular, the producers decided to take on commercial orders and Trade Aid was forced to find new goods to sell. Licencing controls also cause difficulties. In one case, Tibetan refugees living in India make material for bags. Because the ready-made bags cannot be brought into New Zealand, the material is imported and the bags are assembled in the Canter bury Sheltered Workshops. The shops sell tea from Sri Lanka, jute products, table linen, bed spreads, carved wood ware, shoulder bags, mats, sandals, and ornaments. Mr Peter Elvy, managing director of Trade Aid says the organisation receives about five request l for support each month Many of these have to b< refused because the organ isation does ; not hav< enough’ funds.To help expand itassistance, Trade Aid ha: launched an appeal t< raise $70,000 to open linkwith producer groups in Western Samoa. If the money can be raised over the next three years, the organisation will enter into a partnership arrangement with producers to market such goods as spices and dried bananas in New Zealand,