Fair-trade farmers like these in Ghana benefit from mid-level lending. Photo: Crankyshooter1 (flickr)

What prevents many subsistence farmers from taking their business to the next level? Access to capital.

With no real assets or market connections, subsistence farmers stand little chance of gaining the startup capital to succeed in for-profit farming. A recent New York Times blog post follows Willy Foote, a mid-level lender with a unique program aimed at helping those he considers part of the "missing middle."

This "missing middle" is comprised of the small farmers who live on $2 a day or less and thus don't qualify for traditional bank loans, but need more startup capital than microloans offer. The New York Times elaborates on the barriers that prevent the "missing middle" from making this leap:

The problem is that their businesses, even when they form associations, are too small and risky to be served by banks and too big for Grameen Bank-style microfinance. To succeed, they typically need access to loans between $10,000 and $1 million. This is a banking no-man’s land.

The key to successfully lending in this no-man's land is to get to know your borrowers, says Foote. According to the Times, Foote and his employees at Root Capital are able to quickly and wisely choose whom to grant loans to because of the personal connections they forge with their borrowers.

Root Capital provides basic loan and financial education to borrowers before approving loans -- a crucial element which is often missed in microfinance. They also take steps to protect their borrowers from volatile market fluctuations that leave many small farmers bankrupt. Fair-trade farmers are able to earn higher and more dependable wages because the sale prices of their crops are fixed with buyers ahead of time. Because these buyers are often large or thriving corporations like Starbucks, they can afford to take on some of the risk.

Mid-level lenders like Root Capital that connect farmers to global distributors have become more common in recent years. And since these lenders are repaid not by the borrower but by the distributor, this approach seems unlikely to fall into some of the traps facing microlending organizations as of late.

Foote certainly sees the potential of this currently underserved demographic. And as he explains to the New York Times, he expects the industry to grow. “I think we’re going to see the catalyzing of an entirely new industry of specialized financial institutions that are 100 percent dedicated to this market.”

Photo: Equal Exchange

In a push to raise awareness of price and labor injustices faced by cocoa farmers in West Africa, the AP reports that some churches in the U.S. are encouraging families to hand out fair-trade chocolates to trick-or-treaters this year.

The fair-trade chocolates can be purchased from Equal Exchange's website.

The Israeli-Palestinian peace process is getting an economic jolt from none other than Dr. Bronner's Magic Soaps.

Dr. Bronner’s is an American company that has a 50-year tradition of environmentally and socially minded products. One of the company’s founding principles is that "constructive capitalism is where you share the profit with the workers and the Earth from which you made it!"

Following in that tradition, Dr. Bronner’s in 2005 started buying a majority of their olives from the Holy Land. Olive oil is the main ingredient in their magic soaps, and Dr. Bronner’s wanted to use its demand for olives to promote economic cooperation between the Israelis and the Palestinians.

Their magic soaps are now made with a mixture of Palestinian and Israeli olive oil. Dr. Bronner’s gets 90 percent of their supply from the Palestinian Canaan Fair Trade cooperative. The other 10 percent comes from the Israeli women’s fair trade association Sindyanna and the Strauss family farm in Israel.

"Blending olive oil from Palestine and Israel is a symbolic but significant contribution to promoting the concept of coexistence and cooperation in this area," Dr. Gero Leson, director of special operations for Dr. Bronner's, says in the video above.

Dr. Bronner’s initiative might be relatively small in the greater scheme of the Israeli-Palestinian conflict, but the project's ingenuity and potential has caught the attention of media such as American Public Media’s Marketplace.

While lots of companies have some sort of charitable arm or a mission that incorporates social responsibility, few are working in such a sensitive area and in such a deliberate manner to promote peace. Perhaps it's fitting for a company that has adopted this principle: "We are all brothers and sisters and we should take care of each other and spaceship earth!"

Social entrepreneur Steven Redgrave gained renown by winning gold medals in rowing in five consecutive Olympics from 1984 to 2000. After retiring from competition, Redgrave was knighted in 2001, launched a line of men’s leisurewear and started a charitable trust focusing on educational and social needs in the UK.

In 2005 he visited Africa, and was moved to action by the poverty he observed. With the help of a major British retailer, Redgrave relaunched his clothing line, FiveG (short for "Five Gold"), as a 100-percent fair-trade enterprise.

In this video diary, produced by Fairtrade Foundation, we follow Redgrave as he visits a rural farming community in Mali that produces cotton for his products.

Thanks to fair trade, not only do these rural farmers receive a higher wage, but their community as a whole benefits as well. The video explains how the community receives what is called a "social premium" that is used for community development projects, including a new health center and a primary school.

For an in-depth look at fair-trade cotton, check out this analysis from the Center for Strategic and International Studies in our archives.