Fair Trade News

Published March 8, 2006

SWEET REVENGE: FAIR TRADE CHOCOLATE
by Alan Pell Crawford

The truth about how cocoa beans are grown, harvested and sold can make a box of Valentine’s Day chocolates a guilty pleasure—regardless of calories:

• 90 percent of the world’s cocoa—the main ingredient in our favorite indulgence—comes from farms of 12 acres or less, mostly in poor Third World countries in West Africa, Southeast Asia and Latin America;
• 200,000 children in West Africa alone are sold into slavery to work on cocoa farms, according to the United Nations Children’s Fund;
• Family farms scrape by on about $30–$110 per family member per year—the kids, working alongside their parents, rarely attend school;
• Tens of thousands of child laborers on West African cocoa farms work in dangerous conditions, clearing fields with machetes and applying pesticides.

No one has been looking out for these children or their families—until the past few years.
But today, thanks to a loose coalition of international, largely nongovern-mental organizations, the lives of many cocoa farmers are beginning to improve. The tasty twist is that these improvements are being financed through the sale of “fair trade” chocolate—and not just any chocolate. The products whose sales are easing the burden of these farmers contain a higher percentage of cocoa than that of better-known rivals, giving them a seductively rich
flavor.

That’s why you pay a little more for fair trade chocolate—and one reason the higher price is worth it. The second reason is that participating farmers keep a greater share of the profits, some of which goes to improve labor conditions and to build schools and install sanitation systems. The third reason is the most important: The chocolate is made from cocoa beans that come from farms where children are not enslaved.

A GROWING MOVEMENT
Behind these efforts are the groups—humanitarian organizations, farmers’ co-ops and chocolate producers—that make up the growing fair trade movement. Although the movement has existed for more than 40 years (coffee from the Netherlands was the first fair trade food product), fair trade chocolate products didn’t exist until 2000, when Equal Exchange, an employee-owned, for-profit company in West Bridgewater, MA, began to sell hot cocoa mix under its Equal Exchange label. The product was a success, and the company began to expand. In late 2004, it introduced three new chocolate bars, including Fair Trade Very Dark, which contains 71 percent cocoa—meaning it has a far richer flavor than most commercially available competitors.

“The basic idea of fair trade,” says Rodney North of Equal Exchange, “is for companies to buy only from farming co-ops so that small farmers, banding together, can command a higher price for their product. Unless they organize, they have no bargaining power and must accept whatever offer they get.”

Co-op farmers can also decide how to divide up the profits through democratic means. “They might fund schools and clinics, or hire organic specialists to teach them more about sustainable agriculture,” North says.

In 2003, in the Ghanian village of Akomaden, for example, the 35,000 farmers of the Kuapa Kokoo collective opened the Nana Frimpong School, named for the co-op’s founder.

As awareness of the plight of cocoa farmers and the quality of fair trade chocolate has increased, demand has mounted. “Now that there’s a proven demand for fair trade products,” North says, “the bigger companies, such as Starbucks and Proctor & Gamble, feel obligated to make at least a token effort, which we regard as a huge success. We want Mars, Hershey and everybody else to adopt this model.”

LOOK FOR THE LABEL
All the players are in place, which should make it easier for the rest of the chocolate industry to get on board. And chocolate consumers can now see by a label that the cocoa bean source was a farm co-op that has been inspected to determine that farmers have the freedom to form unions, that there’s no slave labor, and that certain health and safety precautions are taken.

Use of fair trade labels is a relatively recent development. They didn’t exist until 1989, when coffee became the first product to carry a fair trade logo. Within 10 years, 17 different labeling organizations, each with its own logo, had sprung up. In 1997, they got together to form Fairtrade Labelling Organizations International (FLO), a German-based umbrella group that works with 45 countries. (FLO’s American affiliate is called Transfair USA.) Besides coffee and chocolate, FLO also certifies tea, rice, mangoes, sugar, honey and fruit juices. Cut flowers, fresh fruit, wine, nuts and oils are under consideration.

The use of different labels can be confusing, though it will become less so soon, since the different organizations have settled on one European label and one US label.

GROWING CONCENSUS
Today, even the biggest chocolate-producing companies in the world at last acknowledge that the farmers need help. “No one denies these problems,” says Bill Guyton, president of the World Cocoa Foundation (WCF), formed in 2000.

It includes among its members such heavyweights as Nestlé, Hershey Foods and Mars as well as Ghirardelli, Godiva and Starbucks. Although WCF is not part of the fair trade movement, it, too, works to improve conditions, with an emphasis on methods that will increase member company’s profits. “We’re working with 40,000 farmers in Southeast Asia to teach them
sustainable agriculture and more sophisticated marketing methods,” Guyton says.

Even free-market economists who believe that prices should be established solely on the basis of supply-and-demand find little to criticize in fair trade’s efforts. “My only objection is the implication that anybody who isn’t part of the fair trade movement is part of a dirty, despicable business,” says Brink Lindsey of the Cato Institute in Washington, DC. “If you
demonize the industry, you reduce demand, hurting the very farmers you want to help.”

That dire outcome is unlikely for two reasons. “First, fair trade chocolate will probably always be
a niche market, and, second, there are companies that are not part of this movement that are still socially responsible,” says Michael Sheridan of Catholic Relief Services, who compares the market outlook to that of gourmet coffee. “The potential is great because of the product’s quality.

When people buy candy bars to raise money for a high school band, they’re used to paying extra for a huge bar of chocolate that really isn’t very good. They gladly sacrifice quality to support a cause that they believe in. But with fair trade chocolate, you can support a cause and get
high-quality chocolate.”

As North says, “In marketing, the product can carry the message, but the message can’t carry the product. In this case, we have a product of such superior quality that it can create serious demand.”

CHALLENGES AHEAD
The fair trade movement faces two challenges now. First, it needs to persuade more consumers to try the products, and the products can be hard to find. Second, more and more farmers must be convinced of the advantages of sustainable agriculture and of the wisdom of
producing higher quality beans that command a higher price. “Farmers have already gotten much more sophisticated about their role in the marketplace,” says Pauline Tiffen, acting director of the Fair Trade Federation, an industry trade group.

Tiffen is a co-founder of the Day Chocolate Company, which produces Divine Bars. “We arranged for the Kuapa Kokoo farmers to receive a share of the profits from all sales, and we make the fact that the beans come from Ghana a brand attribute, so people will want to buy it the way they want wine or tea from a particular region. This was an outlandish notion when we introduced it into the chocolate world, but it’s not so outlandish anymore.”

As cocoa farmers become savvier and consumers realize how good the chocolate is, will fair trade solve the problems of the cocoa-farming world? Unfortunately, no. Will it help? Yes. Will it make people more aware of the problems, turning up the pressure on the chocolate industry to do more for the farmers? You have to hope so.

Finally, does fair trade offer an appetizing alternative to that gaudy, heart-shaped box of
dime-store candies made with beans raised in the cheapest possible way at the lowest possible price? An alternative that tastes rich and goes down easy?

Oh, yeah.