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Weavers' Association Easing Poverty in Ecuador

Photo: Fundación Ofis Ecuador

2009-04

From Alternatives 35:1 (2009). Subscribe at www.alternativesjournal.ca

An order for Panama hats can trigger a weaving frenzy among the 54 members of Ecuador’s Chordeleg Agricultural Craft Centre (CACH). If the request is large enough, every member’s mother, sister, daughter, and neighbour starts weaving the fedora-like hats. Made from toquilla straw, the centuries-old Ecuadorean head coverings carry the name of the country from where they were once shipped to Europe.

“There is no shortage of weavers,” says Anita Loja, CACH’s sales co-ordinator. “And they’ll weave until dawn if they have to.” Loja, who learned the trade from her mother, is one of some 30 000 women in Azuay province and neighbouring Cañar who occupy their spare moments with weaving.

Women make the hats, as well as other items, such as placemats, mobiles, and purses, for the tourist market, using toquilla straw that grows 400 kilometres away on the coast. The material’s unique flexibility means that items made from it, including Panama hats, can be packed in a suitcase and pop out looking brand new.

Close to one-tenth of Chordeleg’s population works abroad and sends money home, since most families don’t earn enough to meet their basic needs. The weavers are at the bottom of a production chain. Woven in one day, a typical hat fetches a meagre $2 from local buyers, who sell it to regional buyers until it reaches the export market.

In order to bring more money into their communities, associations such as the CACH tried to move up the supply chain. It is a tactic that involved a huge ramping-up of the organization, only to result in disappointment. When the organization first formed in 1996, it focused on volume rather than quality. The association bought everything its members could weave and hired a manager to sell it all. But sales never caught up to production, forcing the association to rely on grant money to make up the difference. The flawed business model and a corrupt manager led to a crisis in the early 2000s, leaving the CACH with a warehouse full of products and no capital.

Success and stability

After a few false starts, however, the CACH has found that it can be profitable by operating at a smaller scale. With the help of the Ofis Foundation, an Ecuadorian non-governmental organization, a quarter of the CACH’s members rebuilt the organization with more realistic plans. Today, the executive committee and two staff members handle sales, run a store in Chordeleg and operate a straw-processing factory. The association buys only what it needs from members to meet demand. Moreover, members attend monthly meetings at which they make major decisions.

Crucial to the CACH’s success was its decision to concentrate on one product: Ecuador’s famous Panama hat. This choice resulted in their striking a deal with the Spanish fair trader Intermon Oxfam. The association had to mobilize quickly to fill Oxfam’s first big order for high-quality hats. Ten of the CACH’s most capable weavers travelled from community to community to demonstrate their craft. “The first time was hard,” Loja recalls, “but we did it.”

Every year since 2002, the association has delivered 1 000 hats to Oxfam and unlike the one-day, $2 hats, those destined for Spain take about three days to produce and attract $6.

The CACH is bringing some security and stability to the household income of members, and it has started to generate a profit. It divided $2 500 among members in 2006 and $3 000 in 2007. A member’s share of profits represents food for about a month, according to Loja.

Sharing lessons

An organization in Chile, the Latin American Center for Rural Development (RIMISP), is making sure that the lessons from the CACH are not lost on policy makers. The CACH demonstrates that democratic, member-driven organizations can successfully operate market-oriented business models when they understand the scale at which they can control the quality of production. With support from Canada’s International Development Research Centre, RIMISP is distilling this and other Latin American successes into recommendations it hopes will help governments promote rural development.

The CACH is doing its share for Chordeleg, says the Ofis Foundation’s executive director, Patricio Carpio, by contributing to the area’s reputation for quality crafts and helping to raise prices for toquilla straw products. Eduardo Ramirez, a senior researcher at RIMISP, agrees. He believes that the presence of organizations such as the CACH can help a region climb out of poverty.

Louise Guénette lived and worked for almost 10 years in Bolivia and Mexico. She is now a senior communications advisor for the International Development Research Centre in Ottawa.

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