Fair trade cocoa

Cacao seed in the fruit or pocha from the Theobroma cacao tree
Cocoa seeds being dried before roasting
Cocoa seeds being roasted

Fair trade cocoa is an agricultural product harvested from the cocoa tree using a certified process which is followed by cocoa farmers, buyers, and chocolate manufacturers, and is designed to create sustainable incomes for farmers and their families.[1][2] Companies that use fair trade certified cocoa to create products can advertise that they are contributing to social, economic, and environmental sustainability in agriculture.

Background

In the 1990s, approximately 90 percent of the world’s cocoa was produced on small, family managed farms, primarily in West Africa and Latin America. Local collectors and intermediaries purchase and transport the cocoa to exporters and processors. Many farmers are unaware of the final destination and value of their cocoa.[3] Low prices and increasing need for fertilizer often created labor shortage, leading to child and slave labor in many West African countries with cocoa production.

Fair trade cocoa certification was created to overcome these problems. The first fair trade certification of a cocoa product was arranged by the Max Havelaar Foundation of the Netherlands in 1994. The product was Green & Black’s Maya Gold Chocolate, which was made with cocoa from Belize. The Max Havelaar Foundation was also the first Fairtrade Certification Mark. The Dutch foundation has now incorporated itself into Fairtrade International (FLO), a nonprofit organization with 25 member countries that use fair trade certification labels.

In 2002, Fair Trade USA, which at that time had been incorporated into Fair Trade International (FLO), started certifying fair trade cocoa products sold in the United States.[4] In September 2011, Fair Trade USA split from Fair Trade International (FLO).[4]

In 2001, the issue of forced labour in cocoa production was brought to the public's attention by a series of articles published in the United States by Sudarsan Raghavan, Sumana Chaterjee, and the Knight Ridder news agency. They included interviews with victims of child trafficking for cocoa production. Noting that the United States has laws against importing goods produced using slave labor, Congressman Eliot Engel and Senator Tom Harkin proposed to enact a “slave-free” label for chocolate. The United States cocoa industry lobbied against this, and the mandatory labeling proposal was reduced to a voluntary system. Under this system, known as the Harkin–Engel Protocol, chocolate producers pledged that by July 1, 2005, they would use “standards…consistent with applicable federal law, that ensure cocoa beans and their derivative products have been produced without the worst forms of child labor.”[5]

The publicity surrounding these events increased consumer demand for fair trade certified chocolate.

Fair Trade Cocoa Criteria

Although the criteria for fair trade cocoa certification vary amongst different organizations, the following criteria are standard: 1) Fair Trade standards assist farmers to organize as cooperatives and associations so they can earn fair prices for their products.[6] 2) Fair Trade certification organizations regularly inspect cocoa producers to ensure that they meet child labor standards. Fair Trade acts immediately when infractions are found to protect the children involved and secure their safety. 3) Fair Trade standards promote environmental sustainability in producing cocoa crops. They prohibit the use of dangerous agro-chemicals and GMOs. 4) The Fair Trade price guarantees that farmers are paid a sustainable price for their product.[7] In cocoa cooperatives, buyers also contribute money to community development, allowing cocoa farmers to increase product quality, build infrastructure, train workers, bring safe drinking water to their communities and establish local health clinics and schools.

Fair Trade Cocoa Products in the United States

As of 2010, there were 62 cocoa-growing cooperatives in the US fair trade system. The producers supplying the U.S. fair trade cocoa are located in Bolivia, Côte d'Ivoire, Dominican Republic, Ecuador, Ghana, Panama and Peru.

In 2010, the amount of fair trade certified cocoa and chocolate products in the United States increased drastically, with a 67 percent increase from 2009. However, this is a small percentage of the total market for cocoa products.[8] Also, in the USA products which have as little as 11% fair trade-produced cocoa can be labelled as Fair Trade Chocolate.[9] In some cases, if other ingredients besides cocoa are fair trade, the amount of fair trade cocoa may be less.[10]

In January 2010, Kit Kat converted its Kit Kat bar to use fair trade certified cocoa.[11]

Economic Impact

Additional Income for Farmers

Typically, the farmers who grow the cocoa beans only receive 3.2% of the price of the final cocoa bar.[12] In Ghana and the Ivory Coast, the two largest contributors of chocolate in the world, [13] farmers will make as little $0.50 per day and the majority of their income is dependent on cocoa farming.[14] In the past thirty years, cocoa prices have been as low as $714 per ton in 2000 to as high as $3,775 per ton in spring of 2011. Although the market price of cocoa fluctuates, fair trade certification has created a minimum price for which the cocoa farmers must be paid per ton.[15] The farmers receive either the market price or the fair trade minimum, whichever is higher.[16] In January 2011, Fairtrade International (FLO) created an international standard for the minimum price fair trade cocoa farmers receive per ton of cocoa. It was increased from $1600 to $2000 per metric ton of cocoa. The minimum price set by Fair Trade ensures a consistent minimum wage for farmers. This gives farmers financial stability and the ability to plan for future events. This consumption smoothing yields to a better quality of life for the farmers and their families.

Additionally, the cocoa farmers average age is increasing, currently sitting at about 50 years old. Few young people want to stay in the industry as the wages are so poor they are looking elsewhere for work. [17] By increasing their wages through Fair Trade practices, younger generations are encouraged to stay and the industry can continue to produce. Without increasing income, the chocolate supply will fall as the aging population is unable to produce at current levels.

World Price of Cocoa in USD/kilogram from Feb 2013 to March 2017

Since 1998, Fair Trade USA has helped US-based companies using fair trade cocoa to generate more than $220 million in additional income for their cocoa cooperative farming communities.

Community Development

Since 2002, $1.25 million has been paid by Fair Trade USA certified cocoa companies directly to fair trade cocoa cooperatives for community development projects. These additional funds allow cocoa farming communities to attain programs that create better access to health care and education, support women, and protect the environment. Fair Trade USA’s cocoa cooperatives are largely in West Africa and Latin America.

Increasing Equality for Women

While men are paid little while working on a cocoa farm, women are often paid less if at all. [12] Women constitute nearly 25% of the farmers producing cacao in the Ivory Coast yet many do not own any of the land they work on. As a result, women are unable to get loans or a line of credit to increase the quality of their crops and the productivity of their trees through investments in equipment. [18] Fair Trade cocoa ensures that all are paid equally regardless of gender. As a result, women are able to invest their farms. This increases agricultural productivity and product quality. Women are also shown to have greater marginal returns than men when given higher income. [19] Improving their income also has the affect of improving the lives of their children as well.

Political Impact

In Côte d'Ivoire, where much of the country's wealth and employment is based on cocoa production,[20] the government and the rebel group Forces Nouvelles (FN) are competing for fair trade cocoa producing land; revenues from the cocoa trade have contributed to funding armed conflict.[20] After the 2010 presidential election, incumbent Laurent Gbagbo alleged corruption in the voting process and refused to cede power to Alassane Ouattara, the internationally recognized winner. Ouattara called for a ban on cocoa exports in order to cut off Gbagbo’s main funding source. The European Union (EU) endorsed the ban and forbade ships from the EU to dock in Côte d'Ivoire. Cocoa farmers continued to harvest their cocoa beans, but the majority of beans were stored in warehouses and not exported. Some cocoa was smuggled through neighboring countries.

Environmental Impact

A life cycle analysis study of the environmental impact of cocoa production in Ghana, the world’s second largest producer of cocoa, shows that the majority of cocoa production in Ghana is not environmentally sustainable, [21] causing a variety of problems ranging from ozone layer depletion, water and soil contamination by pesticides.[21] to atmospheric acidification and abiotic depletion.[21]

In order to obtain fair trade certification, cocoa producer companies are required to follow to fair trade environmental standards. On a case by case basis, they must assess the environmental impacts of a cocoa farmer’s operations, develop plans designed to mitigate those impacts and monitor the implementation of those plans. Although the environmental standards for fair trade certification vary by organization, they all include sustainable irrigation practices, crop rotation, reducing carbon emissions, improving biodiversity, prohibiting GMO crops, safe use of only legal pesticides and proper hazardous waste disposal.

In addition to the environmental impacts cocoa farming has on the earth, the pesticides used by conventional cocoa farming are some of the most harmful pesticides used in agriculture.[22] Lindane is one of the primary pesticides used on cocoa farms. The Environmental Protection Agency has released a study on lindane stating the acute effects caused by inhalation cause irritation to the respiratory track as well as seizures and vomiting. [23] As the workers live in poverty, often pesticide and herbicide treatment on the cocoa plants are done without proper or any protective gear. Without proper gear, the farmers have prolonged, direct exposure to the chemicals leading to long term health issues for the farmers. By increasing income, farmers can buy and use proper protective gear in order to mitigate these symptoms. Many Fair Trade certifiers also encourage environmental sustainability and transition to organic farming while demanding safe working conditions for farmers. [24]

Company Responses to the Fair Trade Cocoa Movement

The global chocolate industry was worth about $98 billion by the end of 2016.[25] In 2015, the United States alone had a market size of $22 billion and 81% of Americans were consuming chocolate.[26] This adds up to America producing about 1/5 of the world’s demand for chocolate and the potential to have a major impact on the lives of cocoa farmers around the world. Founded in 2006, Theo Chocolate was the first bean-to-bar, Fair Trade and organic certified company in the United States. [27] Since then, Dandelion Chocolate, Askinose Chocolate, Chuao Chocolatier, Droga Chocolates, and many more. [28]

Hershey

Advocates of Fair Trade Cocoa had been urging Hershey, a large chocolate manufacturer with more than 40% of the United States market, to shift into fair trade cocoa production[29] by creating fair trade cooperatives with their cocoa producers in West Africa.[29] As of 2012, these efforts have met with little success.[30]

Ben & Jerry’s

American ice cream manufacturer Ben & Jerry’s committed to use fair trade certified cocoa in all its ice creams by 2013.[4]

Endangered Species Chocolate

Endangered Species Chocolate, a chocolate manufacturer in Indiana, had been fair trade certified up until 2006.[31] However, in February 2006, Endangered Species Chocolate removed its fair trade certification and instead guaranteed it would dedicate the money previously used for the fair trade certification to directly support the farmers in the Conacado Co-op, where the company continues to source its cocoa.[31] Endangered Species Chocolate continues to guarantee that its cocoa farmers in the Conacado Co-op are receiving a fair wage.[31]

One caveat to this approach is the accountability to Fair Trade practices. Companies pay money to certifying organizations to receive certification,[32] and this money is not going to the cocoa farmers. On the other hand, a company that says that it is following fair trade practices but lacks a fair trade certification may not actually be following fair trade practices. This could lead to a moral hazard of saying the company is implementing Fair Trade practices, charging premium prices, but in actuality, not paying higher wages to farmers.

Child Labor

Due to low wages in conventional chocolate growing, many farmers are unable to hire additional labor to maintain the cacao trees and instead use child labor to fill the gap. In 2009, there were over 109,000 children in the Ivory Coast engaged in child labor. [33] This contributes to children not attending school. UNICEF found that from 2008-2012 there was an average of 67% enrollment for male and 55% enrollment for females in primary school. [34] With Fair Trade practices, child labor is prohibited and farmers are paid a fair wage for their work. This allows more children to attend school and gain an education. Gaining an education is a step towards breaking the cycle of poverty. [35]

Carol Off, author of Bitter Chocolate: Investigating The Dark Side of the World’s Most Seductive Sweet, argues that the only solution to the issue of abusive child labor practices in cocoa production is to pay farmers a price at which they can employ adult workers. [36][36] Off asserts that in order to receive this price, farmers must organize themselves with the help of local government departments,[36] and be given access to accurate information about the world cocoa market price, through the Internet, so that they can bargain efficiently by themselves.[36]

Global Exchange, an international human rights organization, agrees that fair trade cocoa is a means of ending the use of child labor in cocoa production.[37] In 2001, the US cocoa industry set a goal to end abusive and forced child labor on cocoa farms by 2005 and outlined the basic steps the industry would have to take to achieve this goal.[37] By 2012, the goal had not been met.[37] Global Exchange has concluded that the industry will adopt fair trade certification when consumers demonstrate preference for fair trade cocoa through their chocolate purchasing choices.[37]

References

  1. ↑ "Guide to buying Fair Trade chocolate". CanadianLiving.com. Retrieved 9 June 2015.
  2. ↑ Peter Oosterveer; David A. Sonnenfeld (25 June 2012). Food, Globalization and Sustainability. Routledge. pp. 117–. ISBN 978-1-136-52962-7.
  3. ↑ "What's Fairer than Fair Trade? Try Direct Trade With Cocoa Farmers". YES! Magazine. Retrieved 9 June 2015.
  4. 1 2 3 Fair Trade USA.
  5. ↑ "Cocoa sustainability goals should not exclude suppliers". Confectionery News. Retrieved 9 June 2015.
  6. ↑ Laura T. Raynolds; Associate Professor of English Douglas Murray; Douglas Murray; John Wilkinson (11 June 2007). Fair Trade: The Challenges of Transforming Globalization. Routledge. pp. 111–. ISBN 978-1-134-00263-4.
  7. ↑ Alex Nicholls; Charlotte Opal (12 July 2005). Fair Trade: Market-Driven Ethical Consumption. SAGE Publications. pp. 133–. ISBN 978-1-4129-0105-5.
  8. ↑ Peter Luetchford; Geert De Neve; Jeffery Pratt (12 September 2008). Hidden Hands in the Market: Ethnographies of Fair Trade, Ethical Consumption, and Corporate Social Responsibility: Ethnographies of Fair Trade, Ethical Consumption and Corporate Social Responsibility. Emerald Group Publishing. pp. 178–. ISBN 978-1-84855-059-9.
  9. ↑ Keith R. Brown (15 April 2013). Buying into Fair Trade: Culture, Morality, and Consumption. NYU Press. pp. 14–. ISBN 978-0-8147-2539-9.
  10. ↑ Sally Blundell (24 December 2013). The No-Nonsense Guide to Fair Trade: New Edition. New Internationalist Publications, Limited. pp. 125–. ISBN 978-1-78026-133-1.
  11. ↑ William Pride; Ferrell (10 April 2012). Marketing 2012. Cengage Learning. pp. 271–. ISBN 978-1-133-95350-0.
  12. 1 2 "Equality for Women Starts with Chocolate" (PDF). Oxfam International. Retrieved 28 April 2017.
  13. ↑ "Cocoa Campaign". International Labor Rights Forum. Retrieved 27 April 2017.
  14. ↑ Kawaka. "Love Chocolate? Then Love Paying More for It". Chocolate Class. Retrieved 27 April 2017.
  15. ↑ Rob Bowden (2009). Food and Water. Evans Brothers. pp. 39–. ISBN 978-0-237-53643-5.
  16. ↑ Stephanie Barrientos; Catherine Dolan (2006). Ethical Sourcing in the Global Food System. Routledge. pp. 71–. ISBN 978-1-84407-189-0.
  17. ↑ "Cocoa Farmers". FairTrade Foundation.
  18. ↑ "The role of certification and producer support in promoting gender equality in cocoa production". CiteSeerX. Retrieved 28 April 2017.
  19. ↑ "Improving Opportunities for Women in Smallholder-based Supply Chains" (PDF). The Gates Foundation. Retrieved 28 April 2017.
  20. 1 2 Global Witness. 2007 Hot Chocolate: How cocoa fueled the conflict in Cote D’Ivoire.
  21. 1 2 3 Ntiamoah, Augustine, with George Afrane. 2007 Environmental impacts of cocoa production and processing in Ghana: life cycle assessment approach.
  22. ↑ De Greff, Dana. "Organic Chocolate VS. Regular Chocolate". Delishably. Retrieved 28 April 2017.
  23. ↑ "Lindane (Gamma-Hexachlorocyclohexane)" (PDF). Environmental Protection Agency. Retrieved 28 April 2017.
  24. ↑ "Fair For Life Commitements". Fair For Life. Retrieved 28 April 2017.
  25. ↑ "Global chocolate market worth $98.3 billion by 2016". Candy Industry. Retrieved 28 April 2017.
  26. ↑ Conick, Hal. "Chocolate Market to Exceed $26bn by 2018: Packaged Facts". Confectionery News. Retrieved 28 April 2017.
  27. ↑ "Mission". Theo Chocolate. Retrieved 28 April 2017.
  28. ↑ "Cocoa". Fair Trade USA. Retrieved 28 April 2017.
  29. 1 2 Newman, Tim, with Elizabeth O’Connel. 2010 Time to Raise the Bar: The Real Corporate Social Responsibility for the Hershey Company.
  30. ↑ April Linton (1 September 2012). Fair Trade from the Ground up: New Markets for Social Justice. University of Washington Press. pp. 31–. ISBN 978-0-295-80419-4.
  31. 1 2 3 Knowmore.org.
  32. ↑ Nick Robins; International Institute for Environment and Development (1 January 2000). The Reality of Sustainable Trade. IIED. pp. 65–. ISBN 978-1-904035-64-0.
  33. ↑ "Cocoa Campaign". International Labor Rights Forum. Retrieved 27 April 2017.
  34. ↑ "Côte d'Ivoire". UNICEF. Retrieved 27 April 2017.
  35. ↑ "Cocoa Campaign". International Labor Rights Forum. Retrieved 27 April 2017.
  36. 1 2 3 4 Off, Carol. The Dark Side of Chocolate.
  37. 1 2 3 4 Global Exchange. 2005 The News on Chocolate is Bittersweet: No Progress on Child Labor, but Fair Trade Chocolate is on the Rise.
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