Mr Vasquez has come with friends from his village in a remote part of Cajamarca, a department in Peru’s northern highlands, to pick coffee in the Moyobamba region on the edge of the jungle…He and his co-workers work from 6am to 4.30pm, for which they are paid 10 soles a day (about $3) – better than the eight soles a day some coffee farmers pay, he says. However, the amount is below the 11.20 soles a day that is the legal minimum he should receive.

This quote is from an article in Friday’s Financial Times, and it reminded me of why we at NextBillion.net have relentlessly promoted development driven by the underserved themselves. The article explains how oftentimes what gets certified as FairTrade coffee may not be very fair after all. These programs aim to improve the incomes of agricultural workers by only buying products made by producers that pay a “living wage” (typically defined as above the legal minimum and also above regional averages).

The Financial Times reveals that in 4 out of the 5 farms they visited for this report, supposedly FairTrade producers were paying wages below the legal minimum. The experience of Mr. Vasquez and other coffee pickers in his situation gets right to the heart of the BOP proposition- while I personally believe we should continue lobbying large multi-nationals to employ strong labor practices, it is much easier to go straight to the source- empowering producers at the BOP with a good reason to provide a livelihood for themselves rather than spending those resources attempting to monitor large companies that may have strong incentives to bend the rules.

Another article in the LA Times tells a story of more effective development- an NGO called Pro Mujer that offers not only microfinance services but business training, healthcare assistance and even spousal abuse support groups for women entrepreneurs in Latin-America. Given limited resources, I would be more inclined to take the same route as the Gates Foundation, spending resources on assisting those with the most incentive to take care of the well-being of BOP employees- the BOP themselves. Giving self-sustaining support to very small businesses may not have the same immediate impact as lobbying Starbucks to buy fair-trade, but at least you’ll have to spend much less making sure those Pro Mujer entrepreneurs are actually taking care of themselves.