Semi-Annual Report covering the performance period [October 1, 2018 – March 31, 2019]

Sri Lanka's spice industry lacks workforce knowledge and infrastructure to meet these new regulations, resulting in a loss of market share to other origins with more advanced technical capabilities. The US imports spices from Sri Lanka, but the value-added portion of the process, including cleaning, sterilization, and grinding, is moving to other origins due to Sri Lanka's high primary processed spices. This shift is a significant blow to Sri Lanka, as spices represented 21% of the country's agricultural goods imported into the US in 2017, valued at $40 million. Frontier Co-op, a US-based cooperative, is a leader in organic and natural herbs, essential oils, and spices. With annual sales of $200 million, Frontier sources hundreds of different botanicals and oils from over 175 countries, with 65% of its products being USDA-certified organic. Through its Well Earth support program, Frontier helps its suppliers, including small-scale growers and social enterprises, to improve quality, efficiency, and income opportunities. The program assists suppliers in navigating market challenges, managing food-safe production, and ensuring compliance with international ethical labor standards. The Small Organic Farmers' Association (SOFA) is a registered farmer association in Sri Lanka, with over 50 local societies and 1,200 spice farmers, plus 2,300 tea, coconut, and medicinal herb members. SOFA is 100% aligned with cooperative principles and is fair trade certified, receiving social premium money. The association works to support its members' organic cultivation, enhance their socio-economic status, provide education, and support the economically disadvantaged. SOFA has been Frontier's trading partner since 2007, but does not process the spices it aggregates from its members, instead selling them to intermediaries who perform value-added processing and sell to international buyers like Frontier. The challenges faced by Sri Lanka's spice industry, including the lack of workforce knowledge and infrastructure to meet FSMA regulations, have resulted in a significant loss of market share to other origins. Frontier Co-op's Well Earth support program aims to improve the quality, efficiency, and income opportunities of its suppliers, including small-scale growers and social enterprises. SOFA, a registered farmer association in Sri Lanka, works to support its members' organic cultivation, enhance their socio-economic status, and provide education and support to the economically disadvantaged. The implementation of FSMA has resulted in a significant shift in the spice trade, with the value-added portion of the process moving to other origins due to Sri Lanka's high primary processed spices. This shift is a significant blow to Sri Lanka, as spices represented 21% of the country's agricultural goods imported into the US in 2017, valued at $40 million. Frontier Co-op's Well Earth support program aims to improve the quality, efficiency, and income opportunities of its suppliers, including small-scale growers and social enterprises. SOFA, a registered farmer association in Sri Lanka, works to support its members' organic cultivation, enhance their socio-economic status, and provide education and support to the economically disadvantaged. Frontier Co-op's Well Earth support program has co-invested approximately $1.5 million in supplier projects, in addition to lending expertise acquired over 40 years of operation. The program assists suppliers in navigating market challenges, managing food-safe production, and ensuring compliance with international ethical labor standards. SOFA, a registered farmer association in Sri Lanka, has been working to support its members' organic cultivation, enhance their socio-economic status, and provide education and support to the economically disadvantaged. The association has been Frontier's trading partner since 2007, but does not process the spices it aggregates from its members, instead selling them to intermediaries who perform value-added processing and sell to international buyers like Frontier.