With permission, we have published the below letter from the Association for Craft Producers in Nepal, received by one of our members, as an example of the challenges currently faced by many of our fair trade producers around the world. Our thoughts are with all of the Fair Trade global community at this very difficult time, as we work to support and encourage others to support our Fair Trade brothers and sisters around the world.
Subject: Update from ACP
Date: 30 May 2021 at 9:43:00 pm AEST
Greetings from ACP!
Trust you have been doing well amidst the pandemic. Needless to say, it has been a challenging time for all of us for over a year now as we battle with Covid -19 globally.
In 2020 with the spread of Covid-19, 101 days lockdown was imposed in Nepal. This severely affected us. The lockdown coupled with a disruptive supply chain and vulnerable domestic market, we barely managed to survive. Our total sales declined by 25% whereas the domestic sales decreased by 50%, with huge outstanding payments to suppliers. We had no cash reserves but we managed to pay 50% salary for the lockdown period. The transportation was restricted but our staff and producers managed to commute to work. The prices of our major raw materials – copper, cotton, wool increased, but we refrained from increasing prices. Our domestic sales suffered heavily, yet our team worked together to put outstanding displays during Dashain and Christmas. Had it not been for the current lockdown, we would have launched our new product collection in our retail store, Dhukuti and shared it with our trading partners. Our team has been working with unwavering enthusiasm. We were fortunate that not many employees were infected with COVID-19. Unfortunately there was neither support nor any stimulus package of any kind from the government even to micro or small scale or cottage enterprises. We managed to sustain ourselves through the support of buyers and development partners.
With decreasing coronavirus cases in the country and region after October 2020, things were looking up and we were slowly getting back to normal. Then the second wave of COVID hit us at the end of April this year. And this time it hit much harder and way faster. With the new variant of corona virus spreading like wildfire in India, Nepal was not spared. The new cases which had decreased to less than 100 per day in February and March 2021, started to surge exponentially from April. New cases in Nepal rose from 300 per day to 9,000 per day during a period of month from mid-April to mid-May, rendering a much sharper curve than that of the last wave. The deaths per day rose from single digit to more than 200 per day. If compared in population ratio, the numbers could be worse than in India, the current COVID hotspot that has been in international headlines. Within a month of the surge, hospitals cannot take in COVID patients due to lack of beds, oxygen, ventilators and other medical supplies. People are dying just because of lack of oxygen supply. This is the critical state in the capital city, leave alone the rural urban and rural areas. With a collapsed healthcare system and inefficiency of the government to address the issue, the public have been left to fend for themselves.
In order to curb further infections and deaths from COVID, the government has again imposed a lockdown in most places of the country. Kathmandu, the capital city where we and most of our producers are based, continues to top the chart with the highest number of infections in the country. At ACP, a total of 14 staff and artisans tested COVID positive within a short span of initial two weeks. More of our employees/ artisans and their family members have been infected since then. Sadly, some of them have lost their spouses and family members. Unfortunately the government has also barred the insurance companies from the renewal of covid insurance which we had done for 320 of our employees and artisans last year.
The current situation of the country has made us very vulnerable- emotionally, mentally and financially. . Needless to say, our home based producers who are dependent on piece rate are more vulnerable. Our producers are engulfed with extreme fear and do not want to risk their or family’s health and safety. Due to the extreme mental pressure many of them are not working at home as well. Ironically, they miss out on work when they need it most.
We are not certain how long the current lockdown will be extended or how things will go after it is lifted. From mere sustenance last year with the help and support of our partners, we are once again forced to think whether we can survive further. We are in a precarious situation. Our current predicament is:
- Although we have orders from export buyers, we are not able to fulfill them on time. The main reason for this is, in addition to the obvious hindrances imposed by the lockdown, the artisans and/or their families have been infected by COVID-19. Since the variant this time is contagious, and more severe, many members of the same family have seen to be infected simultaneously or one after another. It takes a few weeks before they recover and are physically and mentally ready to get back to work.
- The domestic sales have already declined by over 50% this fiscal year and there is no probability for it to recover any time soon. Our main bulk buyers – hotels and restaurants have been hit the hardest but were hopeful with easing of tourists’ visa in December 2020. However, after the second wave, many hotels and restaurants might close down. Expatriate families and tourists, yet our major buyers, have declined considerably. Many countries have currently considered Nepal as not being a safe destination to travel due to the pandemic. It will take a very long time for the domestic handicraft market to revive. We also tried selling online through a popular online selling platform but it has not picked up yet. With a handful of current individual local buyers, it is becoming increasingly difficult to run our store which over the years has been contributing significantly to our sustainability.
- With soaring raw material prices, we will no longer be able to operate without increasing prices. But we fear that with increased prices there will be less orders which again means less work for producers.
- All flights are currently suspended. We are not able to ship products that are ready. From our past experience, the flights were not regular even after the lockdown was lifted. This means the airlines might hike cargo prices which will unfavorably affect the export.
- Needless to say, outstanding payments to suppliers have been increasing. With the deeper financial crisis that we are facing, it seems impossible to get further credit resulting in shortage of raw materials for production.
The current situation is a major setback to the entire national economy. Handicraft sector is no exception. If it takes a long time for handicrafts exports to recover, many artisans will be forced to look for alternative options. This would be a big threat to the entire handicraft industry and to the preservation of our art and culture. With such a fragile situation, it is a question of survival for most organizations and people in the country. ACP is no exception.
It’s unforeseen when this surreal situation would end. We believe there is light at the end of the tunnel but at this point, we do not know how long it will take to get there or even worse whether we would be able to make it or not. Although this is an incredibly difficult time, in fact in a moment like this, more than ever, our artisans need us. Thus once again we, ACP and all the people associated with us, count on you, your well wishes, unwavering support and cooperation, to rise over the present crisis.
Thanking you for your support, cooperation and encouragement to us over the years,
Association for Craft Producers