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Upsides: Anthropology Meets Business

April 14, 2014

Anthropology Meets Business

14 April 2014

Nasser Abufarha is a successful social impact entrepreneur who has put Palestine on the map as a viable trade partner and producer of premium artisan goods. With an educational background in computer science, cultural anthropology, and international development, his reciprocity approach to business has helped Canaan Fair Trade become a multi-million dollar business.

You didn’t study business?
‘I grew up on a small vegetable farm in rural Palestine, but I was lucky enough to be scouted to attend university in the United States. I didn’t study business but in truth the social studies I undertook have helped me more than any business degree could have. I learned about human kind and how we interact, about social and cultural relations. I learned that when people receive something they want to give something in return, responding to positive actions with positive actions. This concept of reciprocity applied in business makes for a very cooperative way of working. At Canaan we apply this approach to every aspect of our business, from the way we care for our land to the way we work with our business partners. It helps us build strong, fruitful and lasting relationships.’

What was the inspiration for Canaan?
‘I wanted to change the world’s perception of Palestine from that of a war zone to that of a trade partner with premium products. I learned about the Fair Trade concept when I lived in the US – it was starting to become popular at the time. I knew the products in Palestine that lacked marketing opportunity, so I looked at market demands and tried to work out how we could meet those demands with the products we have. It wasn’t about creating a charity, but about creating a business that sells premium products.’

And olive oil was one of those products?
‘The olive oil market in Palestine has lots of middlemen, traders that take advantage of small and marginalised farmers. The olive harvest is in November and their sale finances other crops. But the traders would hold off buying until January, and the farmers would get into debt, and prices were pushed right down. At the same time the conflict in Palestine meant that the farmers had limited access to land, and limited access to water for irrigation. People lost interest in olive farming but I saw the possibility to reinvigorate it.’

How did you tap into the world market?
‘We developed the Palestine Fair Trade Association (PFTA) and Canaan Fair Trade. We committed to the farmers to buy their produce on fair terms, and at the time we developed the first internationally recognised fair trade standard for olive oil. The PFTA became the first producer of fair trade certified olive oil worldwide, and it now represents more than 1700 small farmers, organised in 50 village cooperatives. There’s a strong collaboration between the two organisations from education and training on better farming practices, to certification and inspections, to community development.’

Can you tell a bit more about the reciprocity approach in practice?
‘One example is how our farmers receive education and training on organic farming as well as premium pricing, and in turn they deliver fair trade organic practices and a sustained supply of premium goods. But it’s not only the farmers. We also aim to empower the communities we work with to facilitate long lasting commitments to each other. Next month for example we will open our new Research Centre endorsed by the Palestinian Ministry of Agriculture. It’s a not-for-profit organisation that will attract finance from donors and philanthropists and aims to strengthen organic farming locally and internationally. We also offer staff who have worked at Canaan for more than 10 years the opportunity to borrow up to US$100,000 as interest-free seed capital to start a new business. They’re encouraged and mentored – we already have a few employees who are building their business cases.’

What role did finance play in establishing your business?
‘In the beginning gaining access to finance was very challenging. The nature of our business means that we need to have finance partners that are in it for the long term, not just wanting a quick profit. When we first started we had limited resources and it was really tough for many years. We spent a lot of time and personal resources to get the business off the ground. We needed to have financial performance and to be able to show impact before we could attract investors or lenders. We eventually achieved a few small loans from local banks and then attracted finance from larger players like Netherlands-based Triodos, which has actually been a bigger help than just access to money. Having international finance partners brings credibility and it can be used as leverage to create other relationships – it’s always a good thing to have international names behind you.’

Have you changed perceptions of Palestine?
‘We are now internationally successful trade partners, but things locally have also changed. The farming sector has been rejuvenated and small-scale farmers have a guaranteed above market prices for finished premium products. The price of olive oil has tripled for cooperatives and doubled on the market. Traditional life and livelihood has been protected and there is renewed hope and dignity in farming communities.’

Article by Kelsey Barrett