Nico Roozen: A founding father

Solidaridad’s honorary president Nico Roozen on lessons learnt from more than 30 years at the helm of certification systems, the disruptive power of new technologies, and why they’re needed to make an impact on the supply chain.

Nico Roozen officially stepped down from his role as Solidaridad's executive director in June. He handed the baton of responsibilities over to Jeroen Douglas to lead the next evolution of the foundation, but far from taking a back seat in the slow lane, Roozen is excited about the changes he can help implement as Solidaridad’s first honorary president.

“If I can make a new contribution to society at the age of 66 rather than playing golf or chess, then why not?” Roozen tells Global Coffee Report. “[Solidaridad has] given me a position in the organisation to initiate new innovations all over the world, so that’s what I’m going to do.”

Initiating fairtrade

“What I think is a characteristic of Solidaridad, for more than 30 years in coffee, is that we have always been an innovative organisation. We initiated fairtrade at a time when there was a high level of reluctance from major Dutch retailers to work within the marketplace and offer fairtrade goods,” Roozen says.

“We had a lot of discussions with those who were roasting and those running so-called third world shops – they didn’t want to work with the main retailers because they were part of the problem, they were part of capitalism. But we broke through in creating a global fairtrade initiative; however, we also saw the limitations of it, regarding corporate and social responsibilities.”

“Market prices are at 92 US cents per pound, while the fairtrade minimum price is 140 US cents per pound, or in real terms 84 US cents per pound – an economic drama for farming families”- Nico Roozen, honorary president, Solidaridad

A larger slice of the cake for farmers

“There are two large elephants in the room: persistent low prices for coffee and a small part of the cake for farmers,” Roozen says. “Markets do not offer a fair share and a fair price for coffee farming communities. [These are] well-known issues, but there’s still no effective action to correct it. Economic, social, and ecological challenges for the sector cannot be solved without offering farmers a return on investment and a living income.”

Roozen says farmer share has further decreased to 6.7%, with less than 10% of aggregated wealth staying in coffee-producing countries. In real terms, coffee prices have fallen two-thirds since the early 1980s and in that time, the real earnings of coffee farmers have halved in spite of their significant investments in quality and productivity.

“When we developed the first fairtrade scheme in 1988 by launching the Max Havelaar logo in the Dutch consumer market – the first fairtrade label for sustainable coffee to offer some protection to low prices with substantial premiums for producers – we guaranteed the coffee producers a minimum price of 120 US cents per pound,” Roozen says.

“Nowadays market prices are at 92 US cents per pound, while the fairtrade minimum price is 140 US cents per pound, or in real terms 84 US cents per pound – an economic drama for farming families.”

Making a difference

Back in 1988, the first fairtrade certificate was developed with no code of conduct for producers, only traders. Ten years later, Roozen, along with friend and now Solidaridad executive director Jeroen Douglas, developed a code of conduct for fairtrade bananas. But this time it was for producers, not traders. Roozen says it was socially and logically ambitious at the time, but a decision that’s made, and is making, a real difference.

“There is now an erosion of criteria for traders and brands, and an eruption of criteria for farmers,” Roozen says. “The code of conduct for producers involves dealing with the issues of production so that it is economically and socially sound, and that they are held accountable for spending the premiums.”

Control-based systems don’t have a future and incentive-based solutions do” – Nico Roozen, honorary president, Solidaridad

 Controls v. incentives

On reflection, Roozen says certifications have been unable to transform the entire market, with some lessons learnt the hard way, including the choice not to fix market premiums, but one thing is certain: “Control-based systems don’t have a future and incentive-based solutions do.”

“We have turned a system that was controlling trade into a mechanism that only controls farms. It is the main lesson I’ve drawn from the evolution of the certification system,” Roozen says.

“A farmer in Brazil once said to me: ‘Nico, we don’t need police. We need doctors. We need structures which support us to innovate. We don’t need structures that audit us and control us.'”

The importance of scale

The other lesson Roozen learnt was that without scale, nothing is relevant. When he started fairtrade, 25 to 30% of consumers said they wanted to pay more for products that were sustainable. But in reality, only a few consumers are making a choice for sustainability. Roozen says there is a difference between what we see as important as citizens and what we buy as consumers.

“Unfortunately the consumer didn’t give us the power to transform the market. At just 25% you can change a market. The tipping point for change is much lower than in parliament where 50% of the votes are required,” Roozen says.

Certified products still the exception 

“It was my vision for [fairtrade and Utz] to be the dominant perception and dominant feature in the market, but in reality they are still the exception. We have to create incentives for farmers. Controlling is expensive and creates negative energy. Incentives reward good decisions, and good practices create continuous growth and developments.”

[The above is extracted from an interview which originally appeared in the November/December 2019 issue of the Global Coffee report.]

>Read more on Solidaridad's work in the coffee supply chain