Montillo

Fair-trade rum improves the income of sugar cane farmers

Paraguay is home to a very large number of sugar cane farmers but not many processing companies. This gives such companies disproportionate power. As such, the farmers have little or no control over the processing of their cane into sugar. Consequently, they cannot share in the proceeds of the resulting sugar, which has greater value than the raw material. Furthermore, the are paid a paltry price for their sugar cane by the processing companies.

The Montillo cooperative combats this systematic injustice:

• it rents out a sugar factory to process its members’ cane into sugar, putting the power back in their hands. The sale of ready-to-use sugar is more profitable than the sale of unprocessed sugar cane.
• In addition to sugar, it has also established another source of income: organic rum (info in Dutch). To make this happen, Montillo works with the local distillery, Fortin.

Montillo has been around since 1995 as an association of 14 neighbours. In 2003 it became a fully-fledged cooperative.

The challenges of fair-trade sugar in Paraguay

To get Paraguayan sugar to the European market, a buyer has to pay high import taxes (419 euro per ton of sugar). This is Europe’s way of protecting its own market, but it fails to give Paraguayan producers a fair chance (info in Dutch).

Furthermore, Paraguay is not located on the coast, which makes the export of its products a lot more difficult. The sugar and sesame of producers like Montillo has to cross the Paraguay River to the harbour of Buenos Aires in Argentina.

With all these factors combined, organic cane sugar from Paraguay cannot compete with the (often heavily subsidised (info in Dutch)) sugar produced from beets in Europe. Even though the Paraguayan sugar is often more sustainable and efficient to produce.

That’s why Oxfam supports small-scale producer organisations in Paraguay in taking steps toward independence in the commercial chain. Such as by encouraging their investment in fair-trade rum and purchasing the product.

Montillo & Oxfam

• Oxfam has already brought to market four shipping containers of Montillo’s organic, fair-trade rum. That’s around 40,000 bottles!
• Oxfam stopped buying sugar directly from Montillo in 2014. So, how come you can still find their sugar at your local Oxfam-Wereldwinkel? We arranged a collaboration with our other Paraguayan sugar partner, Manduvirá. Manduvirá has had its own sugar factory for some years now and processes Montillo’s sugar cane there for a fair price.
• Oxfam built a sugar cane collection centre for Montillo. With this in place, the cooperative could start collecting the cane from farmers more efficiently, which translates to more income for the farmers.