Fishers, Fair Trade, and finding middle ground

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Fishers, Fair Trade, and finding middle ground Megan Bailey a,∗ , Simon Bush b , Peter Oosterveer b , Laksmi Larastiti b a b

Marine Affairs Program, Dalhousie University, 1355 Oxford St., Halifax, NS B3H4R2, Canada Environmental Policy Group, Wageningen University, Hollandseweg 1, Wageningen, 6700 KN, Netherlands

a r t i c l e

i n f o

Article history: Received 15 May 2015 Received in revised form 27 November 2015 Accepted 30 November 2015 Available online xxx Keywords: Fair Trade Certification Patron–client Middlemen Value chains Small-scale fisheries

a b s t r a c t The goal of Fair Trade certification is to contribute to sustainable development by offering trading conditions that are transparent and equitable. One important condition is improved market access and strengthened producer organizations. In regions like Southeast Asia this goal can be hard to achieve in value chains where local middlemen play a central role in not only trading fish, but also providing fishers with access to capital, infrastructure and essential services. Despite these contributions, Fair Trade principles presume that middlemen adversely control market benefits that should accrue to primary producers. The social and economic contributions of middlemen, and the potentially dependent relationship fishers have with them, is therefore a controversial issue if Fair Trade fish is going to be marketed as a product capable of improving fisher livelihoods. In this paper, we explore the role of middlemen in the first ever Fair Trade USA fishery: handline-caught yellowfin tuna from Molucca in Indonesia. Interviews with fishers, middlemen, the local processor and those involved in Fair Trade implementation were conducted and analzed to understand changes to the organization of the value chain and of the community by defining how middlemen contribute to the assets and capabilities of fishers. The results indicate that middlemen contribute but also control the full range of assets required to enable fishers to fulfill their value chain functions. Introduction of Fair Trade has facilitated a rapid reorganization of value chain structure in the fishery with notable impacts on fisher perceptions of the resource and the market. However, it remains unclear what this value chain reorganization means for community structure. The opportunities and challenges for Fair Trade USA fish to be an empowering force depend heavily on fisher-middlemen dynamics being adequately considered. © 2015 Elsevier B.V. All rights reserved.

1. Introduction Seafood consumer awareness campaigns and eco-labels attempt to harness the power of the market to encourage consumption decisions more aligned with sustainability goals, and in doing so promote improved production practices (Jacquet et al., 2010a). There is evidence for their successful role in shifting purchasing decisions and in helping seafood producers improve practices (Gutiérrez et al., 2012; Agnew et al., 2013). But there is also evidence that they are limited in reaching a critical mass (Bush et al., 2013a), providing legitimate policy outcomes (Christian et al., 2013; Jacquet et al., 2010b; Konefal, 2012) and ultimately effecting change to resource health (Froese and Proelss, 2012; Jacquet et al., 2010a). Perhaps most notably, leading eco-labels like the Marine Stewardship Council (MSC), have also been criticized for their failure to develop social sustainability criteria and the weak

∗ Corresponding author. E-mail address: [email protected] (M. Bailey).

inclusion of developing country fisheries due to its payment structure and data intensive assessment criteria (Gulbrandsen, 2012; Ponte, 2012). Calls for inclusion of social standards and improved engagement of developing country fisheries have continued largely because of they contribute 54% of the global seafood trade by value and more than 60% by volume (FAO, 2014). Various approaches for improving the inclusion of small scale developing country fisheries have been developed. One prominent example are fishery improvement projects (FIPs), which are seen as a way to offer market access for fisheries that are guided through a set of stepwise improvements that are most commonly aimed at complying to standards like the those of the MSC. While less than 10% of the 200 MSC certified fisheries come from developing countries (MSC, 2014), developing countries account for about half of all registered FIPs (Sampson et al., 2015). But while their potential impact on fishery sustainability in developing countries is potentially large, their effectiveness in really incentivizing sustainability gains has been questioned (Sampson et al., 2015). Another emerging strategy to include small-scale producers is the introduction of Fair Trade cer-

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tification. After a decision by Fair Trade International to not engage with fisheries (because of the complexity of the trade, lack of branding, and risk of entering into a sector dominated by the MSC, Auld, 2014), Fair Trade USA developed a fisheries standard (not recognized by Fair Trade International) certified the Moluccan yellowfin tuna handline fishery in Indonesia in 2014. Fair Trade certification supports social sustainability, encourages environmental protection, and attempts to redress power imbalances in international trade and global value chains between traders and processors in the global North and producers in the global South (Bacon, 2005; Goodman, 2004; Nicholls and Opal, 2005). For developing world fishers, such producer empowerment is a notable challenge given the existence of middlemen, known by a variety of names throughout Southeast Asia (e.g., punggawa, tengkulak, mee kha or cassas). These actors play key roles in the value chain and often control access to fisheries and markets. As identified by various scholars (Amarasinghe, 1989; Bush and Oosterveer, 2007; Bush, 2004; Crona and Bodin, 2010; Kusumawati et al., 2013; Pauwelussen, 2015; Platteau and Abraham, 1987; Ruddle, 2011), middlemen are tied to credit and social welfare in communities that are geographically isolated, as well as politically and economically marginalized. Empowering fishing communities through Fair Trade therefore appears to be inevitably tied to addressing the role and function of these middlemen, and the norms and arrangements that enable them to control fisheries and trade. In value chain terms, Fair Trade is a strategy of upgrading that aims to reposition and empower producers vis-a-vis conventional trade relations in at least two ways. First, by creating more tangible links between producers and markets (Riisgaard et al., 2010), and second, by improving the ability of developing country producers to achieve higher economic returns (Gibbon et al., 2008). By creating direct links between producers and markets and by improving functional capabilities beyond production, upgrading can enable producers to realize higher benefits from trade by excluding the middlemen (Mitchell and Coles, 2011). However, while these middlemen exhibit rent seeking behavior from their profitable position within the chain, they also play an important facilitative role in fishing and trade, which questions whether they can simply be removed from the value chain (Amarasinghe, 1989; Bush and Oosterveer, 2007; Kusumawati et al., 2013). If the Fair Trade model is to empower small-scale fishers in regions such as Southeast Asia, not only should the rent seeking behavior of these middlemen be removed, but the capabilities and assets that they provide in fishing communities should be accounted for at the same time. In this paper, we explore the extent to which the Fair Trade strategy of by-passing middlemen from the fishery value chain actually empowers small-scale fishers in the Molucca handline tuna fishery. Using an assets and capabilities framework, we analyze what will be lost to fishers if these middlemen are excluded. In doing so, we contribute to a wider understanding of the social relations of production and trade in small-scale developing world fisheries, and provide key insights for the future development of Fair Trade certification as it relates to sustainable fisheries.

2. Functional upgrading, assets and capabilities Fishers are often identified as particularly vulnerable actors in global value chains, because while they provide an essential role in the chain, they may be locked in a position where they are unable to independently make decisions regarding their own welfare (Becx and Eenhoorn, 2009). This type of inequality in value chain governance can have a strong influence on the economic development of poor people (Nissanke and Thorbecke, 2006). New opportunities to redress an inequitable distribution of power and financial benefits

in favor of disadvantaged groups such as small-scale fishers may open up via shifts in value chain based governance arrangements such as certification. In this paper we use the concept of value chain upgrading, defined as capturing more value in the chain by balancing a range of economic, environmental, and social benefits and risks (Humphrey and Schmitz, 2000), to identify and understand the conditions under which such opportunities can be realized. 2.1. Fair Trade as a functional upgrading mechanism Functional upgrading refers to one type of upgrading that involves a chain actor (such as a fisher), adopting additional functions that might reduce their overall vulnerability and/or enable the capture of a greater proportion of value generated in one or more segments of a specific chain (Ponte and Ewert, 2009; Riisgaard et al., 2010). One functional upgrading strategy that Fair Trade attempts to facilitate is the establishment of direct market access for smallholders by increasing their skills and knowledge and strengthening their organization. In some cases, the adoption of such new functions might lead to the redundancy and therefore exclusion of chain intermediaries such as middlemen (Mitchell and Coles, 2011). Building on the wider literature on functional upgrading (Renard, 2005; Khiem et al., 2010; Fischer and Quaim 2012), the exclusion of intermediaries is seen as desirable because they are considered to take advantage of the weaker position smallholders have in accessing credit, key inputs and ultimately markets. Functional upgrading is concerned with two fundamental themes: identifying sources of producer capabilities, and promoting the economic and social development of small-scale producers (Lee and Gereffi, 2015; Ponte and Ewert, 2009). Fair Trade certification can be considered an example of a functional upgrading mechanism aimed at addressing these concerns. Introduced as a product label for coffee in 1988 by the Dutch Max Havelaar Foundation, Fair Trade sought to differentiate products according to particular guidelines on producer price and smallholders’ organization from conventional coffee (Oosterveer and Sonnenfeld, 2012). It has since expanded to include a wide range of products, reaching over D 5.5 billion in sales by 2011, up from D 217 million in 2001 (Fair Trade International, 2014, 2011). In some value chains, middlemen are being eliminated. In their place, financial, technical and organizational capacities are built that allow for distributing a social premium to be used for community development and related environmental purposes. Organized groups of producers are certified against the Fair Trade standard by an independent certification and verification agency. When certified, these producers are allowed to trade their products to importing organizations that sell them under the Fair Trade label. Long-term partnerships with importing country buyers contribute to stability and security for producers giving them the opportunity to make investments in the future of their enterprise and of their family and local community. The only recent inclusion of seafood can be explained by the nature of the resource and organization of production. First, fish are captured at sea, often in open access conditions. Thus, fishing behavior is often unobservable for outsiders, making it hard to control and verify whether fishers actually perform according to specific standards. Second, the tight linkages between financing, technology and marketing complicate improvements to producer empowerment based on market demand alone. Third, as a fresh product, seafood needs rapid processing and sale meaning that attention to details, such as those included in certification standards, can be difficult as the extra time needed to meet Chain of Custody requirements may compete with maintaining product quality. Fourth, all of these above-mentioned complexities may differ substantially for each species, gear type, and place of origin, making the setting of generic standards for seafood particularly problematic. And finally, redefining the social organization of fish-

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ing communities may require a considerable time investment given the common existence of strong social and cultural norms. Despite these challenges, Fair Trade USA developed a standard independently of Fair Trade International and assessed a smallscale yellowfin tuna fishery in Molucca in 2014. The standard aims to strengthen the position of the fishers within the value chain by requiring them to reorganize harvest and post-harvest activities, and in doing so take on functions that create economies of scale and increase benefits through improved bargaining power. By setting key principles of empowerment and social responsibility Fair Trade USA operationalizes the involvement of local producers through the formation of associations that can provide a forum for training and capacity building (Table 1). Under Fair Trade USA, fishers are awarded a social price premium from each transaction (called the Fair Trade premium). With increased information and market access in addition to a price premium, Fair Trade USA expects to contribute to improved economic conditions of local producers. By complying with the Fair Trade USA Capture Fisheries Standard, fishers are entering into a form of functional upgrading. That is, they are required to reorganize the social relations of production and trade in a given community, by taking on functions beyond production, such as trade, transport and even credit provision. Conceptually this offers new insights into upgrading. The literature focuses predominantly on the role of lead firms in coordinating and facilitating upgrading of other value chain actors (Gereffi et al., 2005). In many cases upgrading is seen as a rational choice—as matching the goals and requirements of producers and lead firms in order to ensure efficiency in future transactions. Less attention has however been given to the capabilities that producers require in order to take on new functions, nor to the local conditions which allow producers to develop these capabilities. To analyze these we draw on the capabilities approach within the sustainable livelihoods literature. 2.2. Capabilities, assets and upgrading Sen’s capabilities approach to development focuses on the ability of individuals or groups to fulfill the functions necessary to reach economic and social goals (Sen, 1985). The ‘functions’ that Sen refers to include a wider range of roles and practices, that enable economic and social activities to be undertaken, and in doing so improve wellbeing by expanding the potential for self-determination (Sen, 1985). However, he also argues that developing the capabilities required to fulfill these functions is dependent on a dialectic relationship with an individual’s or group’s endowment of assets; referring explicitly to things that communities and households own, control or access (Bebbington, 1999; Emery and Flora, 2006; Moser, 1998). Assets are not only resources or capitals in and of themselves, but they also provide the capability to act (Bebbington, 1999). The extent to which these assets are accessible determines whether capabilities can be developed, and the degree of access to these assets is, in turn, partially determined by capabilities. The composition of capabilities and assets required to reproduce the functions necessary for coping with and recovering from environmental, social and economic vulnerabilities has been developed further in one of the more established bodies of livelihoods literature (Chambers and Conway, 1992, p. 6). Here assets, or ‘capitals’, are generally grouped under five categories: physical, human, social, natural and financial (Allison and Ellis, 2001; Ellis, 2000). Physical assets refer to infrastructure and public goods; human assets include skills and knowledge; social assets reflect norms, networks and relations that facilitate social organization and access to information; natural assets refer to the natural resource stock upon which production is based; and financial assets refer to actual or accessible income, savings and credit (see Table 2 for detail).

3

Together these asset groups provide a snapshot of how an individual or group, such as a fisher or a fishing community, builds a livelihood. But perhaps more importantly it also enables us to analyze how policy instruments such as Fair Trade certification (Scoones, 2009) influence the means by which these livelihoods can be improved. We apply this capabilities framework to analyze whether the application of the Fair Trade standard in a small scale developing world fishery strengthens the capability to upgrade fishers’ position in the global value chain for tuna. We examine how existing value chain relations, centered around the role of middlemen within these communities, are by-passed and altered under Fair Trade certification. Given that middlemen play a key role in aggregating fish to sell to downstream actors, and often control local financial systems (Ruddle, 2011), they are problematized by Fair Trade as rent seeking actors who keep fishers poor by controlling their endowment of assets and therefore limiting their capability to acquire new (value chain) functions (Nicholls and Opal, 2005; Nussbaum, 2003). We therefore focus on what assets middlemen contribute to the Molucca tuna hand-line fishers and fishing community, and the extent to which the intervention of Fair Trade replicates or alters access to these assets. Clarifying this will contribute to our understanding of the contested role of middlemen in seafood value chains and the prospects for functional upgrading through Fair Trade.

3. Materials/methods A first round of interviews and ethnographic observation were conducted in Central Molucca villages and in Bali between January and May 2014. This initial study provided a baseline before Fair Trade certification. Interviewees were selected through purposive sampling based on the point of entry for value chain analysis (i.e., in this case, fishers, middlemen and processors) as elaborated on by Kaplinsky and Morris (2001). Value chain interviewees included fishers, middlemen, the local processor and the international processor (market partner) who is also the Fair Trade certificate holder. Staff from the implementation partner and from Fair Trade USA were also interviewed in what Raworth et al. (2012) refer to as a ‘conversational style’. Two of the authors returned to the field in January 2015, after the certification had been awarded. Due to the risk of interview fatigue in the villages, as noted by the implementation partner, focus group discussions with the implementation partner were instead held over a weeklong period. During this visit the local processor and market partner were also interviewed again. Table 2 outlines the different actors and sample sizes used in this analysis. In total over the three different field visits, sixty individual interviews took place. The interviews for fishers included thirty-seven out of the ninety-six total fishers involved in the fisher associations, while three out of a total of four middlemen were interviewed in 2014. The 2015 focus group meeting for the implementation partner included six individuals, which were all field staff working full time on Fair Trade implementation, as well as supporting field and office staff, thereby involving everyone who has worked, or currently works, with the Fair Trade fishery. Interviews with middlemen and fishers took place in Indonesia, with the help of a translator when led by MB and/or SB, or directly in Indonesian when led by LL. Questions focused on four different categories or topics, but not all topics were asked of all interviewees: (1) General activities and organization of the tuna fishery and value chain (e.g., the role of different actors, flows of fish, daily/monthly fishing activities); (2) Relationships between different value chain actors (e.g., the importance of the relationship, positive, negative or neutral value of the relationship); (3) Knowledge about the value chain and global tuna markets (including where the tuna goes when it leaves the village and Indonesia); and (4) Contributions of mid-

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4 Table 1 Objectives of the Fair Trade USA capture fisheries standard. Objective

Description

Empowerment

Supports fishers to develop skills necessary to effectively negotiate with those who have an influence on the buying, processing, and marketing of their products. This is done through the process of organizing a Fisher Association, electing a Fair Trade Committee, creating a Fair Trade Premium Plan, and making decisions on how to spend the Fair Trade Premium

Economic development

Aims to increase income of fishers by ensuring a transparent and stable trading relationship with buyer(s) and by requiring payment of a Fair Trade Premium on every product sale. The Standard establishes wage requirements for workers employed by the registered fishers and the certificate holder in order to increase their income

Social responsibility

Protects the human rights of those involved in the fishery. For fishers and their employees, health and safety measures are established in order to avoid work-related injuries. Fishers are encouraged to use the Fair Trade Premium to provide greater access to, or improved quality of, healthcare and education

Environmental stewardship

Fishers must adopt responsible fishing practices and protect biodiversity, including through data collection and monitoring, recognizing that small-scale fisheries often face challenges with data availability and management. A goal of the Capture Fisheries program is to have fisheries improve over time and eventually reach a level of environmental sustainability consistent with Marine Stewardship Council certification. In addition, the certificate holder and Fisher Association(s) work with government agencies and other stakeholders to jointly improve fishery management

Adapted from Fair Trade USA (2014).

Table 2 Actors interviewed in this study, with interviewer noted (MB = Megan Bailey, SB = Simon Bush, LL = Laksmi Larastiti). Time period

Technique

Actors

Number of subjects

Conducted by

January–February 2014

Interview

Middlemen Fishers Local processor Certificate holder: implementation partner Certificate holder: market partner

3 6 1 2 2

MB, SB

March–May 2014

Interview

Fair Trade USA employee Fishers Middlemen Certificate holder: implementation partner Local processor

1 37 3 2 1

LL

January 2015

Interview

Local processor Certificate holder: market partner Certificate holder: implementation partner

1 1 6

MB

Focus group

dlemen to fisher livelihoods (e.g., contributions by middlemen to the financial, physical, human, social and natural capitals of the community), and asked about ways in which middlemen helped or hindered the capabilities of fishers. Ethnographic observations also occurred during field visits, where processes of negotiation and community meetings were observed.

4. Results The results are presented in three parts. First, we provide a description of the local chain dynamics in the Molucca tuna handline fishery. Second, we analyze the contribution and control of fisher assets by middlemen before the Fair Trade intervention. Third, we analyze how the intervention of Fair Trade certification has led to a reorganization of the social relations of production and trade in the fishery and explore the potential consequences of these changes on fisher assets and capabilities.

4.1. Local value chain dynamics The Molucca tuna fishery is dominated by artisanal fishers using small vessels of about 8 m in length (1–2 gross tons capacity) harvesting fish with handline. Fishing activities are located out of several small communities, but the initial Fair Trade USA value chains are organized around two main landing sites: Assilulu and North Buru Island. Daily catch is 0–3 fish per fisher, with seasonality and weather identified by fishers as having the biggest influence on fisheries production.

In Molucca, adult tuna are brought on board the vessel, cleaned, dressed and loined at sea (heads and tails cut off, gutted, and cut into four pieces), and stored in a cold box. This practice of loining at sea is due to the small size of the fishing vessels, where a whole fish may take up too much room. When the fishing day is over, the fishers and their catch return to the landing site associated with their middleman,1 around whom much of the fishing activity is organized. Fishers and middlemen are bound to each other by social conditions and cultural norms. These middlemen hold an important position in the value chain through their role in facilitating production, assisting in financing, controlling flows of commodities, and moving raw product from fishers to processors. Fishers are paid US $3.70–4.00 per kilogram of tuna landed, but did mention during interviews that the price changes daily, and is not openly communicated to fishers by the middlemen. During interviews, however, middlemen claimed that they would disclose market information if fishers asked, but noted that they rarely get questioned by fishers about prices. At the middleman’s landing facility, called a mini-plant, the fish are lightly processed, which in some cases just means rinsed and bagged, and in other cases, the loins are cleaned of bones, skin, and brown meat, rinsed and bagged. All loins are also graded, which is the practice of selectively distinguishing good and poor quality harvest based on color, firmness and texture of the meat. Grades

1 In Molucca, these middlemen are specifically referred to as suppliers, but to reduce confusion, we maintain use of the term middlemen throughout the paper.

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Fig. 1. Molucca yellowfin tuna value chain actors and product flow. Fair Trade actors are bold and in italics.

A through C will continue on through the FT value chain. Anything under grade C will be redirected to the local market. Middlemen occupy the second node in the value chain, as a sort of aggregator, amassing product from different fishers and getting fish from the villages to the processor in Ambon (Fig. 1), where the loins are cleaned, packaged, and flash frozen for export. The frozen tuna loins are shipped to Vietnam where, at a processing/trading facility, they are cut into steaks and packaged as either “Fair Trade Certified Ahi Tuna Steaks” if they originate from the Fair Trade line, or otherwise simply as ahi tuna. From Vietnam, the products are exported to the US market. Because of the low expected volume of raw material, conservatively estimated at less than 100–150 t of cleaned product per year, only Safeway stores in the United States currently sell the Fair Trade USA product. 4.2. Role of middlemen before Fair Trade Middlemen, in general, contributed directly and indirectly to each of the five asset categories as reported in Table 3. Interviews demonstrated, however, that there was considerable variation in the way in which middlemen contributed to livelihoods of fishers by controlling the endowment of assets. Similarly there was variation in the extent to which these middlemen were included in, and had influence on, the Fair Trade process. Given that such variation is found within a fishery, variation between fisheries about the role of middlemen is likely to be large. Perhaps the most direct means of middleman control is over the endowment of financial assets. Because of the small amount of tuna caught per fisher, and the distance to the processing company, middlemen explained that fishers are unable to create and maintain a relationship with the processor. Middlemen therefore facilitate access to this actor, and in doing, argue that they support logistics such as ice and transport, as well as enable market information and ultimately a flow of income for fishers. They also control the endowment of financial assets through what are termed quasi-credit relations (Platteau and Abraham, 1987). According to the implementation partner, credit is provided at the start of each season and also provided throughout the fishing season to cover unforeseen costs. In contrast to loans from community members, which can cost up to 20% per month in interest, middlemen offer interest free loans, with no time requirement for repayment, and often include some form of loan forgiveness depending on the fishing. Finances are provided, but fishers have little to no insight into how much debt they have accumulated. This may result in an outcome seen elsewhere, where finances become a means of ‘clientelism’ (Acciaioli, 2000) within these communities that severely limits any form of empowerment or self-determination. Middlemen also directly provide physical assets for fishers, including fisheries-related equipment and supplies, as well as community-based infrastructure. The provision of fishery related equipment is an extension of the quasi-credit relations (Platteau and Abraham, 1987), and in this case some middlemen let fishers use their boats and engines, while maintaining ownership, while

others allow fishers to slowly pay off the boat and engine, and hence to become boat owners at some point in the future. There is some amount of tension around these relationships because, as the implementation partner explained, for the duration that a fisher is borrowing the boat from a middleman he remains indebted and therefore bonded to that middleman, who also provides other necessary equipment such as life jackets, ice, Styrofoam boxes, knives, and plastic bags. One middleman himself admitted that these contract-free financial and technological loans are a form of control used to “prevent the fishermen from selling his fish to other middlemen”. The provision of community physical assets includes examples such as building of a new mosque through the help of a middleman who contributed 0.2% of monthly sales over several years, and in another case, one middleman donated material (sand, paint) for mosque repairs, provided fuel for materials shopping, and encouraged his fishers to take days off from fishing to provide labor for the repairs. An endowment of natural assets in fisheries relates to the status of the resource itself. Middlemen may influence the natural assets, the fish stocks and their status, in three ways. First, by reacting to the demand from the market they facilitate access and exploitation of that resource (decreasing it). Second, and more positively, they influence the information available to fishers, for example by encouraging fishers to only catch adult tuna and to avoid juvenile catch and the catch of non-target endangered, threatened and protected species (ETPs)—both of which are key issues in tuna fisheries in Indonesia and the Western Pacific (Bailey et al., 2012; Bush et al., 2013b). Third, because they have a higher community standing than fishers do, they are more able to engage with the government on sustainability conversations related to tuna fishing. The implementation partner has witnessed middlemen in Molucca representing their fishers and promoting handline fisheries as a sustainable fishing method to the government. In doing so, they fulfill a spokesperson role against the use of fish aggregating devices (FADs) by purse seiners, which are perceived to have a disproportionately high amount of non-target catch compared to other fishing methods (Bailey et al., 2012). Middlemen contribute directly and indirectly to the endowment of human assets. Directly, by facilitating informal training of fishing and post-harvest handling practices for their fishers. High grade tuna, based on the quality of the tuna meat, commands the highest price and is exported. If poor fishing techniques and post-harvest handling are employed, there is a high likelihood of lower graded fish (grade B to grade D) and although lower grade fish can still be exported, it is worth less for fishers. According to the local processor in Ambon, the right practices can ensure their supply of the best quality fish is met, and fishers can receive a higher price for every kilogram of tuna that they land. In the past two years, the local processor has noticed a decrease in the supply of high quality tuna to his plant, which he attributes to poor weather, while fishers we interviewed attributed this to competition by foreign fishing vessels operating legally and illegally in Indonesian waters. According to one fisherman, he used to be able to fish as often as three to four

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Table 3 Asset categories and some examples provided to interviewees. Asset

Responses of interviewees

Financial Physical Human Social Natural

Income, interest free loans, risk mitigation Mosque repairs, labor, paint, sand, boats, gear, engines, ice, plastic Training/knowledge for fish handling, uniforms for school, medicine, rice, search and rescue Provide networking and houses function as sort of community centre, help family members of fishers Encourage adult catch, support anti-FADs campaign

times a day, but presently one trip a day may still yield no catch. This declining catch rate may mean that it is more important than ever for fishers to concentrate on the quality of their catch, rather than the quantity. Middlemen contribute indirectly to human capacity of the community by fulfilling social welfare functions. For example, they contribute to school uniforms for the families of fishers, help to distribute medicine to fisher families, and provide rice at times (or provide loans for these items). According to the implementation partner, middlemen have also, at times, given immediate loans for fishers to pay for hospital visits or school fees for their children. Middlemen also offer financial and physical aid for search and rescue operations in the event of missing fishers. Again reflecting the patronage networks they create around them (Adhuri et al., 2015), these wider services are a responsibility the middlemen take, whereby they contribute to community wellbeing. Interviews revealed that the contribution of the middlemen to the endowment of social assets, such as the organization of production and trade, is one of their most important but also controversial functions. Middlemen are often key social actors in the community, creating social ties between fishing families and offering physical space for community members to meet, and as interviews with the implementation partner revealed, the middleman’s house may serve as a kind of community and cultural center. These strong links can be important in times of crisis, as observed by the implementation partner when one middleman arranged responses on behalf of the fishers when authorities confiscated boats and equipment. However, their control over the endowment of social capital through such activities can also be detrimental to fishers. All of the lending, debt forgiveness and risk mitigation means fishers face a continuous risk of marginalization. Additionally, the implementation partners have observed middlemen exploiting their relationships with fishers for political gain, which was also witnessed during interviews in March–May 2014. This exploitation does not happen symmetrically with all fishers, but rather some middlemen strategically choose and support fishers that can best be used to reach particular goals. We witnessed that these relationships were abandoned in times without relevant political dynamics.

4.3. Reorganization under the Fair Trade USA intervention At the onset of the Fair Trade USA assessment, three middlemen in Assilulu and one on an adjacent smaller island (Buru) were engaged in the program. Fig. 2 summarizes the situation prior to certification. We observed during the field study in early 2014 that there was little cooperation between middleman-fisher units, but high levels of cooperation, communication and organization within units. For Fair Trade, however, fishers should be more or less selforganizing in fisher associations. In the Molucca fishery, the only way to create such associations has been through the alreadyestablished middleman units (Fig. 2). According to the Fair Trade implementation partner, despite the middleman no longer having direct control over how fishers are organized, they remain integral to the formation of these fisher associations. The four associations in the initial certification linked together by the two Fair Trade committees in Assilulu (Ambon) and Buru represented 96 fishers

and communicate directly with the certificate holder. During the initial round of fieldwork, it was the so-called ‘market access partner’ that was the identified as responsible for connecting fishers with downstream markets. However, upon return to the field in 2015, the name had changed to certificate holder, which is now made up of two entities. The first entity is the market partner, who buys certified product and is responsible for upholding values in its relations with upstream value chain actors. The second entity is the implementation partner, who is responsible for on-the-ground implementation and facilitation of the entire process, including supporting the various actors to meet their responsibilities. Each of these actors and actor groups—fishers, fisher associations, Fair Trade committee and certificate holder—have different responsibilities, as negotiated under the registration agreement between the certificate holder and the fishers (Table 4). These responsibilities can be related to the concept of capabilities in the sustainable livelihoods framework in that they are roles and actions that fishers are expected to deliver in the context of Fair Trade. A long process of negotiations and meetings took place between January and August 2014 with fishers, middlemen and the implementation partner discussing the formation of the associations, committees and developing the documentation on roles and responsibilities. Interestingly, we observed no specific roles or responsibilities laid out for middlemen in the Agreement (Table 4). So while they have an obvious role in the value chain, they have no explicit roles in the Fair Trade USA scheme. When asked about the absence of middlemen in most documentation, the certificate holder recognized the importance of these actors, but stressed that they do not actually receive any price premium from Fair Trade, and in fact, have no formal change in their economic practices under certification. The premium passes directly from the certificate holder to the Fair Trade committee, thus truly bypassing the middlemen. The fisher associations then make recommendations to the Fair Trade committee about how they would like their premium used. A risk assessment was conducted for each mini-plant, however, and necessary improvements required of middlemen facilities were noted in documents provided by the implementation partner, such as repairing stairs for safety, strengthening the foundation, creating small roads for distribution, and in one instance relocating to an area less prone to flooding. The only place where middlemen are referenced in the Agreement is the requirement to have a written statement about fishers’ responsibilities when it comes to loan repayments, as negotiated in the registration agreement with the certificate holder (Point 13). Indeed, according to the implementation partner, auditors identified the lack of documentation between fishers and middlemen as a point of vulnerability. While best practices would likely include having a contract between each fisher and middleman, the implementation partner sees this as unfeasible and so the fisher association serves as the legal body to formalize agreements. The contracts contain information about the ownership of machines and boats, loans and repayments, and are facilitated by the implementation partner. Fishers stated that, while not implicitly part of the fisher associations, middlemen still have the power to steer meetings, and often

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Fig. 2. Evolution of value chain and social structure under Fair Trade USA for the Molucca yellowfin tuna fishery.

communicate directly with the implementation partner about Fair Trade concerns or issues. Having followed this process from early 2014 to early 2015, it is clear that gaining the trust and cooperation of middlemen has been essential to implement the standard, which is in part attributed to the painstaking efforts of the implementation partner to be transparent about the goals and clarifying that certification is not meant to weaken the role of middlemen. However, middlemen currently benefit from the very things that the Fair Trade standard tries to correct, so a weakening, or at the very least, a change in the role of middlemen seems unavoidable. In fact a strong implementation partner that is capable of wading through the complexities of social organization, power relations, and the Fair Trade intervention may be one of the more important pieces of the intervention puzzle. Despite the key role of middlemen in fishers’ livelihood in Molucca, certification has already led to some changes in this relationship. Prior to certification, not one of the interviewed fishers knew where their fish was destined. This attitude has already changed with the Fair Trade committee receiving their first Fair Trade premium check in January 2015. According to the implementation partner, fishers have begun talking about the fairness of the premium, now knowing that the fish is destined for the US market, and discussing ways to best spend it. The fisher association in Buru, for example, has discussed starting a cooperative without the influence of the middleman, where fishers can access bait and

tackle, and perhaps take on processing duties of cleaning the loins. Whether or not fishers can perform these middlemen roles does not seem to have been explicitly considered, but raises the issue of how easily financial assets gained through the Fair Trade premium can be turned into value chain capabilities. The implementation partner has also observed that fishers in Buru have developed a sense of resource ownership since discussions around Fair Trade begun. In the past when the fishery shut down for the season in Assilulu, the Buru middleman had encouraged fishers to move over to Buru to increase his supply. Prior to certification, this was a non-issue. However, the implementation partner reported that Buru fishers have now staked a claim to the physical fish in the sea, arguing that part of the Fair Trade premium Assilulu villages would be getting should in fact accrue to them, even if it’s an Assilulu fisher who lands the fish. This caused initial conflict between the Buru middleman and his Buru fishers, with the middleman threatening to cancel the entire Fair Trade intervention if the Assilulu fishers were not given permission to fish. The threat proved empty, however, and the Assilulu fishers have agreed to pay 20% of their premium to the Buru fishers. Thus, the Buru middleman still gets his fish, both villages benefit from the fishery, and Buru fishers have been empowered to bargain and fight for what they now consider to be their resource rights. From discussions with the Buru middleman, the implementation partner senses that he recognizes that while Fair Trade may weaken some of his control,

Table 4 Actors and responsibilities under Fair Trade USA scheme. Summary text is from Registration Agreement, developed and implemented by the implementation partner. Actor

Responsibilities

Fishers (F)

Participate in, and follow rules of, FA and FTC; make effort to strengthen knowledge and capacity; willingly contribute socio-economic data; engage in environmentally safe method of fishing; understand environmental aspects of FT standard; never engage in child labor; ensure crew safety; support implementation of traceability; uphold catch share agreements

Fisher associations (FA)

Represent fishers; help fishers remain independent (non-partisan); implement standard; liaise between CH and F; conduct informal education; improve human resources; mobilize activities for benefit of future generations; support activities to increase capacity of F; keep detailed information; report all vessels; keep data on vessel size/GT, and guarantee vessels are licensed

Fair trade Committee (FTC)

Maintain system of democracy; develop cooperation between fishing groups; increase quality of living for F; establish board of decision-making; Remain independent and non-partisan; liaise between CH and FAs; use informal education to guarantee safety; support activities to improve human resources; keep database of each fisher and vessel size/GT, and guarantee all vessels are licensed

Certificate holder (market partner and implementation partner) (CH)

Ensure FT premiums (FTP) are applied to new contracts; ensure FTP is paid to FTC (and is directly traceable); source all FT product and sell to market; promote environmentally safe method of fishing; support efforts to ensure other actors have information about FT concept; ensure traceability; grant access of information to interested F; ensure catch share agreements are upheld; ensure safety at sea; no payments between CH and F; support F to ensure loans between F and middlemen are upheld; Develop annual sourcing plan

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the advantages to the community and to his operation in the short term outweigh this potential cost. 5. Discussion Functional upgrading through Fair Trade is aimed at eliminating the role of intermediaries in the global value chain and strengthening the position of smallholders by supporting them to organize themselves and create direct relationships with processors and traders. Arguments have been made both for the exclusion of middlemen in promoting small-scale producer empowerment (Mitchell and Coles, 2011) and for a better appreciation of their importance in providing financial and social support (Bush and Oosterveer, 2007; Kusumawati et al., 2013; Ruddle, 2011). In this paper, we have investigated these two claims with specific reference to an evolving dynamic in the world’s first and only Fair Trade USA certified fishery and conclude that these arguments are, in fact, two sides of the same coin. Our results suggest that middlemen in Molucca have a large role in providing inputs into the fishery, getting fish to the market, and organizing the community. They also provide a central source of support in times of need. But they may also contribute to an environment of ignorance and dependence. While these results are only based on one fishery, we can ask what this contested role of middlemen means for fishers and functional upgrading specifically, and for Fair Trade certification more generally? 5.1. Contested role of the middleman in functional upgrading This study has found that in the case of the first and only Fair Trade certified fishery, middlemen contribute to the assets of fishers, and perhaps in ways that the Fair Trade premium alone cannot immediately replace, for example by providing search and rescue support, and advocacy for fishers at the government level. The functional upgrading argument may need to better nuance the assumption that middlemen are ‘disposable’ actors. Echoing the findings of Taylor (2005), the question that ultimately emerges is to what extent assets and capabilities can be delivered through a market-oriented tool like Fair Trade certification, instead of through community actors like middlemen. Observations from this first Fair Trade intervention show that it has in fact facilitated a rapid change in how the value chain is organized by removing middlemen as the central actor around whom the fishery is organized. What this value chain reorganization will mean to social relations in the community has yet to be fully realized. The capabilities and assets framework can help to provide a snapshot to assess under which conditions poor people benefit from trends in global value chain governance, such as functional upgrading. Yet in systems with strong patron–client relations, this would require those implementing Fair Trade to: (1) Compensate fishers for the current material contributions that middlemen make; and/or (2) allow for fishers to acquire the capability to take on the value chain activities that middlemen currently perform and fulfill the responsibilities required of them for compliance in the Fair Trade standard. Before Fair Trade the functions of fishers and middlemen in the Molucca handline fishery were distinct, reproduced by the social relations of production controlled by the middlemen. Under these conditions, fishers could only upgrade through the accumulation of enough financial capital to by-pass the quasi-credit relations under which they were subjected to by middlemen. In contrast, the Fair Trade Premium allows a wider group of fishers to accumulate enough financial capital to secure fisheries-related physical assets such as equipment and gear independent of middlemen. In doing so Fair Trade provides fishers with the capabilities to reproduce those assets.

Our results also show that the fishers association enabled fishers to gain control over the endowment of key assets that were previously in the hands of middlemen. Fishers have become more likely to develop not only individual but what have been referred to as collective capabilities (Stewart, 2005) that enable them to upgrade their position in the value chain. It is also foreseeable that collective capabilities will influence the adaptability of the communities to social and/or environmental change (Crona and Bodin, 2010). However, there may also be trade-offs between these individual and collective capabilities. For example, increasing the value of tuna to the individual through these associations may come at the cost of investing in communal capabilities that may reduce the overall risk and vulnerability of the community. Over the long term it is yet to be seen whether the fisher associations can replicate the same risk reduction functions that middlemen were able to provide, such as diversifying the employment opportunities of fishers in times of low fish abundance. If so, then does value chain upgrading through Fair Trade threaten these risk mitigation roles that middlemen play? 5.2. The future for Fair Trade Fair Trade is argued to offer a certification approach that can include social issues and be accessible to developing country fisheries where other certification schemes have failed. As such, Fair Trade may appear attractive for those in export seafood markets seeking a response to the growing list of acute social issues in fisheries, including theft, slavery and violence (Couper et al., 2015). But many of these social issues are not poorly addressed because they are unimportant, but because they remain off-shore and largely invisible to regulators, and involve social relations that are embedded in (often predatory) local cultural norms and practices (see Béné and Merten, 2008; Hauck, 2011). At best, Fair Trade might be able to successfully redress these norms and practices. However, at worst, the imposition of very westernized views that assumes away the importance of local social relations in the context of global market-based governance arrangements may in fact undermine fisher empowerment. In negotiating these norms and practices, and in doing so upscaling Fair Trade as a fisheries certification solution, we argue the generalizability of patron–client relationships, the lack of organizational strength among fishers and the credibility of the implementation partner need to be addressed. There are many studies characterizing the dynamics of patron–client relationships (Acciaioli, 2000; Kusumawati et al., 2013; Platteau and Abraham, 1987), and the diversity in relationships and structures makes it difficult to generalize their significance for Fair Trade. Small-scale fisheries are diverse and embedded in social and cultural systems that are neither easily nor quickly changed—especially some patron–client relations are intergenerational (Pelras, 2000). For Fair Trade, these systems of rules and norms need to be carefully handled in implementing the standard. Automatically assuming that elimination of middlemen will be better for fishers is perhaps too simple, as evidenced by our results. Rather, upgrading should not be understood only in economic terms but should include social dimensions as well (Lee and Gereffi, 2015), and global value chains should necessarily be understood as involving local dynamics with complex social, cultural as well as economic interactions between chain and nonchain actors (Bush and Oosterveer, 2007). Balancing the facilitative and exploitative role of middlemen in fisheries in Southeast Asia is bound to be complicated, but recognizing this double-edged sword instead of pretending that middlemen are expendable is a necessary first step. Three key characteristics have been identified as particularly important to Fair Trade success, namely favorable economic and political conditions, shared producer commitments and values, and

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strong internal organization. This third factor was clear in an analysis of successful coffee Fair Trade initiatives, where the authors found that almost all of the studied value chains had strong internal cooperative partnerships 5–10 years prior to the introduction of Fair Trade (Raynolds et al., 2004). For the Molucca fishery, and for other fisheries with strong middlemen, this particular characteristic is missing. The fisher associations were only formed in order to implement the standard, and were done so with support and permission of the middlemen—as apparent throughout our study. In this way, cooperative middlemen, and not strong fisher organizations, appear to be the more important factor for long-term success. This is particularly relevant for Fair Trade in fisheries given that, at least in this first case, there does appear to be a gap between the current capabilities of fishers and the responsibilities outlined by the registration agreement. In the case of Molucca, cooperation from middlemen was likely due, in large part, to the perseverance of the implementation partner. In January 2014 fishers had no knowledge of, or interest in, where their fish was marketed. Fair Trade could not possibly have infiltrated such a value chain without a strong and trusted implementation partner. This partner had good relationships both with fishers and middlemen, and also a long-standing relationship with the market partner. The characteristics that make up the certificate holder, the implementation and the market partners, and their internal and external relationships, are perhaps equally important to the scalability of Fair Trade as the producer characteristics themselves. For future success, effective implementing relations appear to be a fundamental first step.

6. Conclusion Our results demonstrate the paradoxical role of middlemen in fishery value chains. On the one hand they create exploitative social relations with fishers, and in doing so directly control the endowment of assets fishers need in order to develop the capabilities necessary to be beneficially involved in the global value chain. On the other hand, middlemen facilitate access to these assets and in doing so enable the reproduction of social and economic practices that underlie handline tuna fishing as a livelihood. This nuanced distinction between exploitative and facilitative roles is the key challenge to the success and impact of Fair Trade certification, as well as one of the likely reasons why other environmental certifications, such as the MSC have struggled to be make headway in small-scale developing country fisheries. While only analyzing one fishery, our results hold wider consequences for rolling out Fair Trade certification, as well as for how the certification is organised in developing countries in general. The standard and successful certification of the Moluccan handline tuna fishery partly addresses criticisms that other seafood certification schemes, such as the MSC, are not designed with small-scale and developing countries in mind. Fair Trade has taken up this challenge in response to the rising concern of social issues, including empowerment and wellbeing, in fisheries where this demand is likely to increase. As market pressures to deal with social issues in fisheries increases, questions about the likely impact of market-based tools like certification on fishing communities will become more prominent. The Fair Trade USA standard has made an important first step in addressing value chain upgrading by small-scale seafood producers by experimenting with how trade and traders should be reorganized. In doing so, they have begun to address the very issues that have held back Fair Trade from entering into fisheries before this standard was developed. In terms of value chain upgrading, this first Fair Trade fishery appears to be a success, but the scalability of Fair Trade remains unclear. We observed fairly rapid evolutions within communities and value chains in the Molucca fishery, but

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much of this seemed to be dependent on the relationship between the implementation partner and middlemen, and also on a cooperative and transparent local processor. Middlemen were explicitly left out of formal documentation around roles and responsibilities, but were of paramount importance to get Fair Trade running. Our results show that a degree of experimentation is required with the organization of fishery certification systems, as well as rethinking the ways in which existing middlemen can be incorporated. Acknowledgements The authors acknowledge Adessium Foundation for funding. We also humbly thank the fishers, suppliers and implementation partners that were willing to share their thoughts and experiences with us for the purposes of this research. Special thanks to Momo Kochen for her on the ground expertise, help in arranging field visits, and comments on an earlier draft of the manuscript. The manuscript was improved through the helpful comments of two anonymous reviewers. References Acciaioli, G., 2000. Kinship and debt: the social organization of Bugis migration and fish marketing at Lake Lindu, Central Sulawesi. Bijdragen tot de Taal-, Land- en Volkenkunde 156, 589–617. Adhuri, D.S., Rachmawati, L., Sofyanto, H., Hamilton-Hart, N., 2015. Green market for small people: markets and opportunities for upgrading in small-scale fisheries in Indonesia. Mar. Policy, http://dx.doi.org/10.1016/j.marpol.2015.03. 021. Allison, E.H., Ellis, F., 2001. The livelihoods approach and management of small-scale fisheries. Mar. Policy 25, 377–388. Amarasinghe, O., 1989. Technical change, transformation of risks and patronage relations in a fishing community of south Sri Lanka. Dev. Change 20, 701–733, http://dx.doi.org/10.1111/j.1467-7660.1989.tb00363.x. Agnew, D.J., Gutiérrez, N.L., Stern-Pirlot, A., Smith, A.D.M., Zimmermann, C., Sainsbury, K., 2013. Rebuttal to Froese and Proelss “Evaluation and legal assessment of certified seafood”. Mar. Policy 38, 551–553 http://www. sciencedirect.com/science/article/pii/S0308597X12001625. Auld, G., 2014. Constructing private governance. In: The Rise and Evolution of Forest, Coffee and Fisheries Certification. Yale University Press, New York. Bacon, C., 2005. Confronting the coffee crisis: can fair trade, organic, and specialty coffees reduce small-scale farmer vulnerability in northern Nicaragua? World Dev. 33, 497–511. Bailey, M., Flores, J., Pokajam, S., Sumaila, U.R., 2012. Towards better management of Coral Triangle tuna. Ocean Coast. Manag. 63, 30–42, http://dx.doi.org/10. 1016/j.ocecoaman.2012.03.010. Bebbington, A., 1999. Capitals and capabilities: a framework for analyzing peasant viability, rural livelihoods and poverty. World Dev. 27, 2021–2044, http://dx. doi.org/10.1016/S0305-750X(99)00104-7. Becx, G., Eenhoorn, H., 2009. Do Value Chains Help Farmers Out of Poverty? LEISA [WWW Document]. Béné, C., Merten, S., 2008. Women and fish-for-sex: transactional sex, HIV/AIDS and gender in African fisheries. World Dev. 36, 875–899, http://dx.doi.org/10. 1016/j.worlddev.2007.05.010. Bush, S., 2004. Scales and sales: changing social and spatial fish trading networks in the Siiphandone Fishery, Lao PDR. Singap. J. Trop. Geogr. 25, 32–50, http:// dx.doi.org/10.1111/j.0129-7619.2004.00171.x. Bush, S., Oosterveer, P., 2007. The missing link: intersecting governance and trade in the space of place and the space of flows. Sociol. Rural. 47, 384–399. Bush, S., Toonen, H., Oosterveer, P., Mol, A., 2013a. The devils triangle of MSC certification: Balancing credibility, accessibility and continuous improvement. Mar. Policy 37, 288–293, http://dx.doi.org/10.1016/j.marpol.2012.05.011. Bush, S., van Zwieten, P., Bailey, M., 2013b. Commentary: BESTTuna: benefiting from equitable and sustainable trans-boundary tuna fisheries in the Western Pacific. Aust. J. Marit. Ocean Aff. 5, 104–111, http://dx.doi.org/10.1080/ 18366503.2013.10815740. Chambers, R., Conway, G.R., 1992. Sustainable rural livelihoods: Practical concepts for the 21st century. IDS Discuss. Pap. 296, 1–42. ISBN 0 903715 58 9. Christian, C., Ainley, D., Bailey, M., Dayton, P., Hocevar, J., LeVine, M., Nikoloyuk, J., Nouvian, C., Velarde, E., Werner, R., Jacquet, J., 2013. A review of formal objections to Marine Stewardship Council fisheries certifications. Biol. Conserv. 161, 10–17, http://dx.doi.org/10.1016/j.biocon.2013.01.002. Couper, A., Smith, H., Ciceri, B., 2015. Fishers and Plunderers: Theft Slavery and Violence at Sea. Pluto Press, London. Crona, B., Bodin, Ö., 2010. Power asymmetries in small-scale fisheries: a barrier to governance transformability? Ecol. Soc. 15, 32. Ellis, F., 2000. The determinants of rural livelihood diversification in developing countries. J. Agric. Econ. 51, 289–302, http://dx.doi.org/10.1111/j.1477-9552. 2000.tb01229.x.

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Please cite this article in press as: Bailey, M., et al., Fishers, Fair Trade, and finding middle ground. Fish. Res. (2015), http://dx.doi.org/10.1016/j.fishres.2015.11.027