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El Cerrito man helps coffee farmers blossom

San Francisco Chronicle

El Cerrito resident Paul Rice stands at the edge of a dirt road, overlooking the volcanic peaks and adobe homes of this small Nicaraguan town near the border with Honduras.

“Twenty years ago, on this road – at this time of day, at this time of year – I would be worrying right now. You wouldn’t want to be here,” Rice said.

Rice arrived in Nicaragua in 1983 at a time when the U.S.-sponsored Contra war (1981-1988) was raging against the leftist government of the National Sandinista Liberation Front. A 23-year-old college graduate, he came to study land reform and cooperative organizations in the northern city of Chinandega.

On a visit to the coffee-growing hills above San Lucas, Rice cultivated what would later become the American fair trade movement. Founded in 1998 in a converted warehouse in downtown Oakland, TransFair USA began as a bare-bones operation with an unusual premise – put more money in the pockets of farmers in the developing world by persuading consumers thousands of miles away to pay a premium in the name of social justice. Modeled after organic produce and dolphin-safe tuna, Rice started the organization with the stark black and white label that told shoppers their coffee came from farmers who received a “fair price.”

‘The real Juan Valdez’

Ten years later, Rice and his family spend every July in Nicaragua, visiting family and friends and working on fair trade issues.

In San Lucas, Rice huddled with Santiago Rivera, a 67-year-old cooperative coffee farmer he calls “the real Juan Valdez,” referring to the fictitious coffee grower and advertising spokesman for Colombian coffee. Until the Sandinista Revolution in 1979, Rivera worked on a private coffee plantation making less than 50 cents a day. When the new government acquired the farm, Rivera and some 20 other farmers were given the land to work collectively. TransFair says it has generated some $110 million in extra income for small coffee farmers like Rivera.

“The great thing about fair trade is that when the market price would fall, we’d have the guarantee of a decent price,” Rivera said. “When it’d go up, we’d get more. The great thing is the stability.”

Before Nicaragua, Rice alternated between study and field work.

An adventure

As an undergraduate at Yale, he studied economics and political science. He spent a summer studying in China, then took a year off to work as a copy editor at the Beijing Review, a weekly news and current affairs magazine, He devoted weekends to working in rice fields and making spare tractor parts at the Red Star Commune, a large community-owned farm, outside the capital.

“It was an incredible working-class adventure for me,” he said.

After China, Rice returned to Yale with a new focus on agricultural economics and land reform. Two years later, he went south to Nicaragua to work for a Jesuit-run institute in the country’s capital, Managua, researching land reform, food policy and the cooperative movement.

In 1985, he took a job managing a project funded by the French government in the northern hills. The area was the center of the civil war – a place where his economic development projects in schools, roads and machinery were often destroyed by the Contras within months of being built.

Rice also became disenchanted with international aid agencies and their approach to development, which he says focuses on production rather than market forces and fostering independence.

A third economic path

“It taught me that foreign aid is as much a part of the problem as it is part of the solution,” he said.

In 1990, Rice helped found a coffee export cooperative called PRODECOOP where former enemies – Contras and Sandinistas – worked side by side. What began with 24 people and 10 sacks of coffee grew to some 3,000 families within three years.

But Rice wasn’t satisfied. With the Sandinista Revolution on the wane, he sought a third path between the staunch free market ideals of Ronald Reagan and the socialism of the outgoing Sandinistas. A Dutch friend then told him about a “strange idea” called fair trade that was just beginning to catch on in the Netherlands.

Hooked on the idea, Rice left Nicaragua to earn an MBA at UC Berkeley, taking his Nicaraguan wife, Marisol Aguilar, and his young son, Emiliano, with him. In an Oakland warehouse, he started a certification and labeling organization for fair trade goods.

After years of fundraising, TransFair USA was born in 1998.

Back in San Lucas, Rice and Rivera discussed last year’s coffee crop while Rivera’s wife, daughters and granddaughters shucked beans. The Rivera home is like many throughout rural Nicaragua: a few rooms built of adobe and stick, with uneven electricity, a clay tile roof, a smoky wood stove, beans and corn planted in the yard, and a faded picture of the Virgin Mary on the wall.

But Rivera credits fair trade with allowing his family such small luxuries as a concrete floor and school supplies for his three daughters. In a country with a per capita income of $2,800 – the second-lowest in the Western Hemisphere after Haiti – Rivera can earn as much as $3,000 annually for his share of his cooperative’s annual fair trade coffee crop. Other coffee farmers average between $500 and $1,000 annually, according to San Francisco’s Global Exchange.

“Now we sell to a lot of different buyers all over the world, but the guy who brought fair trade to Nicaragua,” said Rivera, pointing to Rice, “was this guy right here.”

TransFair USA

TransFair USA is an Oakland-based organization that certifies products as fair trade. Importers and retailers are asked to pay a premium price to farmers and farmworkers who are committed to growing and producing goods in accordance with standards that guarantee worker rights and environmental sustainability.

Since its beginnings in the northern hills of Nicaragua, TransFair USA has gone from an obscure consumer movement to the U.S. mainstream.

In 2007, fair trade coffee reached sales of $837 million of the $13.5 billion U.S. coffee speciality market, according to TransFair USA. Fair trade coffee is also the fastest growing segment of the annual $44 billion coffee industry, according to Packaged Facts, a market research company.

Today, shoppers can buy fair trade coffee beans from Latin America, Asia and Africa at Wal-Mart and Costco and fill their cups with fair trade coffee at Starbucks, Peet’s and Dunkin’ Donuts.

In the past 10 years, the Oakland nonprofit also has branched out to certify flowers, chocolates, fresh fruits, rice, sugar and other products. Last year, domestic sales of fair trade certified products reached an estimated $1 billion.

– Freda Moon

E-mail Freda Moon at foreign@sfchronicle.com.

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