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Fair Trade and Organizational Innovation in Nepal: Lessons from 25 Years of Growth of the Association of Craft Producers (ACP)

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Abstract

The history of the Association of Craft Producers, a fair trade organization in Nepal, illustrates an important point often ignored during research on development organizations: that each will evolve along unique lines, not easily fitting into standard categories of ‘for-profit’ business, ‘non-profit’ organization, ‘charity’ or ‘development non-governmental organization’ used in the literature. Instead, organizational structures, ideas and cultures are constructed by practice as highly contingent processes and based on diverse logics. We argue against the managerialist idea that such organizations can be viewed simply as variants or ‘hybrids’, and we challenge conventional emphases on organizations as unitary structures or systems within an environment in favour of a more interactive, dynamic perspective in which actors in organizations are seen to change the environments in which they are located. Such an approach also provides support to ideas about ‘positive deviance’ as a method of learning that can potentially avoid formulaic thinking.

Abstract

L’histoire de l’Association des Producteurs Artisans (ACP), une organisation de commerce équitable au Népal, illustre un aspect important – mais souvent ignoré – de la recherche sur les organismes de dévelopement : que chaque organisation évolue de manière unique, et ne se prête donc pas nécessairement à des catégorisations standardisées telles que ‘la société à but non-lucratif’, ‘l’entreprise’, ‘l’oeuvre de bienfaisance’, ou ‘l’ONG’, entre autres. Les structures, les idées, et les cultures de ce genre d’organisation sont construites à travers des pratiques basées sur des logiques diverses et contingentes. Nous argumentons, de ce fait, contre une approche managériale qui considèrerait que de telles organisations ne sont rien d’autre que de simples variantes ou hybrides d’autres organismes. Nous contestons l’idée qu’elles seraient des structures ou des systèmes homogènes qui ne feraient qu’opérer au sein d’un environnement plus large en faveur d’une perspective plus interactive et plus dynamique au sein de laquelle des acteurs auraient le pouvoir de changer leur environnement. Une telle approche met en avant l’idée de la ‘deviance positive’ en tant que méthode d’apprentissage susceptible d’éviter une pensée stéréotypée.

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Notes

  1. See also Biggs (2007, 2008).

  2. See ActionAid and FTGN (2003) for general background on handicrafts in Nepal. We estimate that about 7 per cent of Nepal's handicraft exports are produced by FTGN organizations, valued at approximately NRs180 million. APC is the largest organization in the FTGN.

  3. At the exchange rates in 2006/2007, this was over US$1 million. These are undeflated figures, but still show significant and sustained economic growth. In 2007/2008, sales fell to NRs 75.8 million, from NRs 83.6 million in the previous year with exports declining to 68 from 77 per cent. This was mainly because of a fall in overseas demand.

  4. The ED has received numerous awards in recognition of the social entrepreneurship that she and her colleagues in ACP have demonstrated and encouraged over the years.

  5. ACP frequently finds its designed have been copied without permission, recognizes this as the inevitable outcome of success, and generally wish their imitators well.

  6. See Biggs and Messerschmidt (2005) and Lewis (1998).

  7. For more history of ACP, see Limbu (2002).

  8. The importance of cross-sector expertise is explored in Lewis (2008).

  9. By 2008, there were over 1200 piece rate workers, about 90 salaried ‘in house’ producers and 60 management staff. ACP provides an extensive benefits package for its piece rate workers.

  10. Another producer story concerns a male potter who was trained in ceramics by ACP, and who now also has his own buyers, and also trains other ACP producer groups, and advises ACP on ceramic production and marketing. As the ED remarked ‘now we need him more than he needs us’.

  11. Before 2009 the World Fair Trade Organization (WFTO) was called the International Fair Trade Association (IFAT). ACP has never been directly involved in FCO or FINE, only indirectly as member of WFTO.

  12. The acronym FINE comes from the first letter of FLO, WFTO, Network of European World Shops (NEWS) and European Fair Trade Associations (EFTA).

  13. For a history of fair/alternative trade at the international level and analysis, especially of the rich country end of international value-added chains, see Raynolds and Long (2007).

  14. Rather than being in a hierarchy with WFTO at the centre and AFTF in Asia – the two organizations are ‘equals’ performing different roles.

  15. See Raynolds, Murray and Wilkinson (2007). ACP has consistently improved workers rights and benefits. Barrientos and Smith (2007) argue that this is a frequently neglected aspect of fair trade work.

  16. For example, Korten (1987).

  17. The passages in quotes are taken from ACP's own brochures and advertising materials.

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Acknowledgements

The research on ACP took place over several years. We especially appreciate the work of the staff of ACP who prepared a detailed time line of key events over the history of the organization, which was updated a couple of times, and who read and made comments on earlier drafts. During the research, we reviewed a range of ACP internal documents, and this was accompanied by interviews with staff of ACP, people in producer groups, other members of the Fair Trade Group-Nepal, and members of the wider handcraft industry. We are grateful for all the assistance we received. We also thank Carol Wills, Douglas Murray and Barbara Wilson for reading and commenting on earlier drafts. Finally, we benefited a great deal from the comments of two anonymous referees, and from extremely useful editorial input from Dennis Rodgers. Any remaining errors are ours.

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Biggs, S., Lewis, D. Fair Trade and Organizational Innovation in Nepal: Lessons from 25 Years of Growth of the Association of Craft Producers (ACP). Eur J Dev Res 21, 377–396 (2009). https://doi.org/10.1057/ejdr.2009.11

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