The Chocolate Life

Discover Chocolate and Live La Vida Cocoa!

FAIR TRADE AND ORGANIC CERTIFICATION FROM THE EYES OF A PRODUCER

In 1995 I closed a profitable business in the USA, sold a very nice house, packed some shipping containers and moved to Brazil to become a cacau farmer. The radical change of lifestyle was taken because my Brazilian born wife, youngest of a family of nine, was the last hope for saving a 2500 acre cacau farm that had been abandoned by other family members.

Our new enterprise consisted of +-60 workers, 26 living with families in free farm residences. There was no residence for the owners since it was customary to live in a distant city and rely on the farm administrator to deal with the disorganized mess. We moved into an 800 sq foot house intended for the guy that milked cows. Since all the cows had "vanished" due to disease, theft and slaughter, there was no cowboy.

There were no written documents that listed workers, water was taken from a river that passes through the farm, telephone service was unheard of and hand tools consisted of one broken point screwdriver. The administrator, 60 years old, born in the farm property, had been feuding with family members for more than 20 years.. A real mess.

Today, the farm operates with 26 workers, has water and indoor sanitation in each house, has been completely mapped using GPS and Autocad, maintains a repair shop that is not equaled for 500km and electrical power has been installed in every residence, shop and work area. With no exception, each farm residence has parabolic antennas, color television, refrigerators and in some cases washing machines. In 2000, I designed and constructed a farm owners residence, installed radio link telephone and satellite internet. We have begun to feel like it is a true home. We are in residence at the farm and have been since 1995.

The workers are by Brazilian law, registered and receive all the benefits legislated by the Federal Government. Includer are:
* 44 hour work week
* 1-1/2 premium for extra hours
* double time for hours worked Sunday
* 30 days per year vacation with 33% bonus for the month
* 1 additional month salary called 13th month salary each year
* each child under 14 years receives a monthly salary equal to 5% of the worker
* each worker has government retirement plan which is paid monthly by the farm valued at
10% of gross salary
* each year the worker receives an additional month salary deposited for severance, if and
when it occurs
* a primary grade school is maintained in the farm at farm owner expense
* government managed medical care is paid for from a 5% salary deduction

The current salary is R$480.00 which equates to USD 220.00. Considering all the legislated benefits and the fact that the worker has 30 days vacation, 10 legal holidays and 1-1/2 days per week off....the hourly salary comes to something in the order of USD 1.80 or USD$ 15.00 per day worked. Failure to meet these obligations result in legal actions which can result in the farm being auctioned to meet the "AGRICULTURAL REFORM LAWS".

I was fortunate enough to have timed my arrival in the farm with that of "Witches Broom". The devastation caused by the disease is almost incalculable. In 1980 our farm produced 270 tons of beans. The year of 2000 closed with 30 tons. The application of technology, planning and very hard work, we closed 2008 with 60 tons and prospects of a similar harvest in 2009. Our farms are considered to be a model for management, social awareness and ecology...BUT...not a single cent of profit has been recognized and personal out of pocket prop up loans have mounted to something on the order of USD$300K.

Is there someone with more need for FAIR TRADE, I would like to meet them. I;ve had untold meetings and proposals from organizations SELLING certificates for FAIR TRADE, ORGANIC, RAIN FOREST ALLIANCE. Each has been turned away because it provides absolutely nothing towards the production of cacau, welfare of workers or ecological stability of our 500 acre Atlantic rain forest.

In an attempt to more fully understand the world of cacau, I made a trip to Ghana, Nigeria and Ivory Coast. The squalor and poverty I witnessed certainly did not substantiate the claims made by third party certification agents. Most of the small farms were hand to mouth existence and the only prosperity was achieved by 3rd party buyers that collected rural production. This production ultimately settled in the warehouses of multinational giants and finally on to the shelves of shops across Europe and the USA.

The web is filled with discussions regarding FAIR TRADE but most of the authors have not an inkling of the issues that prohibit FAIR TRADE. As long as commodity buyers in London and New York and Chicago control cacau prices and movement....FAIR TRADE ARE ONLY TWO WORDS!!!

Views: 424

Reply to This

Replies to This Discussion

Hi Eric,

That is a huge problem, and there will only be so many people able or wanting to work on cocoa farms. Tempting as that sounds in an English winter. However, your question almost answers itself: YOU take care to pay a bit extra, and to try and make sure the farmers get a little bit more. You tell us, we buy from you. Your business could also feature in the virtual "farmers market" with a degree of openness and a statement of intent.
Just from this thread I now know more about one farmer and two producers and this information will be used if/when I next make purchasing decisions.
If you are meeting farmers occasionally and other purchasers are also meeting other farmers occasionally then maybe we can post this knowledge. A bit clunky, full of gaps and unstructured - but still very useful.
Look at it from the viewpoint of the consumer (whether buying beans or chocolates or machinery) - how can they tell who they are dealing with? Visit each companies web-site? Not practical and not subject to much centralised comment or critical review. I will (soon, fingers crossed!) be looking to buy beans, in small quantities. How do I know? Would I rather buy Fair Trade beans from someone who wouldn't know a tasty bean from a piece of wood or someone who was more obsessed with quality and incidentally trying to do the right thing.
it needs a light touch and someone will take advantage and con us but it might help push the move to quality and responsibility.

Regards,
Duffy
I agree with Duffy on this issue Eric.

What you have just done (post some information about your business and its practices in a central location) is an embryonic form of Duffy's idea. It's a form of transparency. The more we have the better. As Duffy said:

"Just from this thread I now know more about one farmer and two producers and this information will be used if/when I next make purchasing decisions."

Keep it coming I say :-) If enough small players are involved, then the our customers can put pressure on the big players to lift their game since there is an alternative available
.
Langdon
Hello Eric,
Im a pretty new artisan chocolate maker in Chile. (not from the bean, just transforming coberture)
Here in Chile its very but very dificult to find good chocolate at reasonable price.
the only company which sell "good" chocolate is Belcolade-Puratos and its pricey like 20 USD/ kg
Im very interested in all the fair trade and organic chocolate.At the moment this is the only company selling such chocolates...
But I read in one of your post that you knew beab to bar makers in Peru, Brazil, ecuador, Bolivia...have U got the contacts ?
If not I have the posibility to buy chocolate from EL REY but I dont know about the organics y fair trade practices...I would buy 21USD/kg

thanks in advance for any advice and good contact.

Olivier
Hi Clay,

I don't think that it should cost a lot of money to operate a system like this. Software must be written and a website kept operational, but given that the information is being provided for free, the ongoing costs should be quite minimal.

Langdon
Hi Duffy,

My guess is that the biggest threat this system will face is the people out there who won't accept critical comment about their business or product. And rather than rebutting the comments logically and sensibly, will just threaten legal action against the person who made the comment and the operator of the site.

After all, why is there inequality in this industry? Because people with power are happy to take advantage of people without power (usually growers). When someone comes along who threatens the status quo, then threats of legal action are common.

The reason I am posting this comment is not to be discouraging, but to get a potential major issue on the table. Having bought it up, I will say that I think the problem can be dealt with. It requires that the ground rules for using the system are solid, with good legal advice backing up the rules.

Langdon
Hi Langdon,

I have no idea how the law works regarding freedom of speech, fair comment and slander. If I was very rude about, say, "premium" M&Ms and they insited the comment be deleted one could instead leave a note saying that they'd brought the lawyers in - leaving readers to draw their own conclusions on how that company react/over-react.

Another point I wanted to make is that we will find the farmers because we are looking for them. We are trying to find good quality beans and to improve the fermentations etc. If the middleman who finds the beans tells us the farmer is looking after his staff and that he pays a premium to this end then we can expect to also pay a premium to buy form the middleman and can tell the people who buy from us about the farmer and what he's doing and where the extra is going to go.
We start building little supply chains with some transparency. Word gets round that Farmer A is getting more because he's taking a little more care and the middleman will have more farmers seeing that this is sustainable way to grow cocoa.

Regards,
Duffy
Hi Duffy,

Sam and I have spent a fair bit of time researching this issue over the years. The rules vary from country to country. The US (due to its excellent freedom of speech laws) give the greatest protection to the person making the statement.

The bottom line (from our research) is if what you are saying is:

1. Demonstrably true
2. Publishing the information is in the "public interest" (i.e. exposing deceptive practices that may harm customers)
3. Is a personal opinion that you actively believe

Then it will be virtually impossible for someone to successfully sue you for defamation in the US, UK, or Australia (these are the jurisdictions that we have researched). The Wikipedia entry on defamation is a good resource if you are interested

http://en.wikipedia.org/wiki/Defamation

Typically defamation is used as a form of bully. Most people have no idea of their rights and when faced with an enraged corporation threatening to sue, will just back down. So the bully knows that it is unlikely to ever have to go to court.

In the case of the system that we are discussing it would be well worth while to find or hire some legal advice to clarify this issue as part of the system design.

Contributors should be educate about what can and can't be said, and how comments should be phrased to avoid defamation. After all, we don't want to defame anyone. We want rational criticism, debate and transparency.

Potentially controversial posts (where someone is rated low) can even be flagged for moderation before posting to help pick up obviously defamatory comments leaking in. On the flip side, anyone who receives a bad comment should be given the chance (and encourage) to defend themselves.

With enough input the system will become a lot like ebay's feedback pages. Both the crank reviewers and the deceptive suppliers will become obvious thus allowing consumers at every level to make better choices.
Duffy, I agree that we will find the farmers, as you say, we are looking for them.

As for trusting the middleman though, I am skeptical. I think that this kind of system should discourage "hearsay" and encourage verifiable fact at every step. If one or more people visit a farm, or co-op and see good practices (and documents them with photos or videos for instance), then I will have more confidence.

Langdon
Langdon,

I found your pricing approach very interesting re bringing greater value (= returns) back to the growers. I am involved in a project to build the cocoa industry in district of PNG and from my research so far - and I think you example bears this out - there are too many participants in the value chain between the grower and the retailers. I should add also that these participants are extracting value out of the chain for dubious 'services' with the net result that the full value/return back to growers is eroded.

Our view is that we need to regain this 'extracted' value by dealing direct with the retailers - and even better when these retailers are also manufacturing on a bean-to-bar basis (such as Michel Cluizel) thereby shortneing the supply chain further. So we are actively pursuing this approach and hope that it makes sense to these end buyers as well by effectively shortening the supply/value chain.

So while I see the merit in the thinking of returning some of the margin at the retailing end to growers, we believe that real power lies with the growers and we are workig to build their knowledge and skills re their understanding of the 'game' and how to play it.
Hi Alan

Sounds like you have a good project going there. We would be interested to hear more about it if you care to share. Hope that it works out for you and the growers you are working with. Education for these people has to help and if you can find them direct markets then that is a really good achievement.

What you say about shortening the supply chain is fair enough and the more the better. However only a relatively tiny percentage of the cocoa harvest goes to bean to bar manufacturers (and probably ever will). Therefore to improve the return to more growers, an approach that works within the existing system seems, to me, to have the best overall potential.

Langdon
Hi Langdon,
I agree with your point about bean-to-bar manufacturers taking a tiny proportion but I am trying to find links direct with growers - or as close as I can get - and struggling to find any way of doing this. The big dealers are looking for orders by the metric ton (or 20).
Maybe a combination approach would work. As I've said before, I search "Fair trade" web-sites and only find where to buy retail products. Frustrating! If a grower, group of growers or co-operative sold direct then it might be like farmers in the UK selling part of their produce at a farmers' market - low in terms of volume but high in terms of profitability.

Regards,
Duffy
Duffy, followig on from Langdon's comments and now yours it seems the cocao crop out of PNG is being sold to the firms in Singapore and Malaysia (over 57%) and then our suspicion is that it is on-sold to other local markets in S.E Asia. There is also a portion sold to Indonesian buyers who blend it with the commodity cocoa out of Indonesia. We have no hard evidence of this but a country who is producing 300,000 tonnes p.a buying more in from PNG who produes 51,000 tonnes does beg the question of 'why?' if not for blending - especially given the IOCC rating of fine flavour to PNG cocoa.

So we are intent on trying to maximise the return to growers via the 'low volume/high return' route as you nicely put it and if this takes time (which it will) then so be it. That the bean-to-bar segment is very very small doesn't worry us unduly at the moment as production and quality issues are still needing to be worked through. What we think is at stake is the global positioning of the PNG cocoa industry - and that to the right segment (high end buyers) and a move away from the selling on a 'whoever wants it' basis. We are learning in any case so there is no huge hurry. We are also hoping that a few initial contracts with bean-to-bar buyers will represent some very important precedents to the growers who have been fleeced for too long now by exporters who have no interest in developing the industry and maintain a solid self-interest by keeping the growers in the dark on international prices and marketing approaches. So we intend to change all of that so that growers do become far more influencial in the value chain than they have been till now.

Langdon, the project of building the cocoa industry is part of an NZAID project to improves incomes (by 10% at least by end of 2010) of rural folk in a district outside of Lae PNG. We are also building up the fish farming industry too with coffee to follow later this year. But it is the cocoa industry where we started because it has the greatest promise to raise incomes by a good measure.

Can you perhaps confirm a stat I've heard - that the fine flavoured cocoa crop represents about 9% of the total world cocoa production. Sound about right? Be very happy to hear more and tell more about the project if you have any lead questions.

RSS

Member Marketplace

Promote TheChocolateLife

Bookmark and Share

Follow Clay on:
Twitter :: @DiscoverChoc
F'Book :: TheChocolateLife
F'Book Group :: LaVidaCocoa
Paper.li :: @DiscoverChoc

Badge

Loading…

© 2014   Created by Clay Gordon.

Badges  |  Report an Issue  |  Terms of Service