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There is more than a little controversy about the effectiveness of "Fair Trade" and what it actually means for individual cacao farmers.

While I agree with the overall aims of the "Fair Trade" movement, I am not a fan of the way their aims are implemented as a business. While I have to agree that something is better than nothing, "Fair Trade" is a way of addressing the historical (and current) inequities in the market, not the way.

I also believe that you can't just be against something without being for an alternative. Otherwise, you're part of the problem, not part of the solution.

So here are some very specific ways I think that Fair Trade can - and should - be improved.

One gripe I have about virtually all of the certification processes (not just Fair Trade) is that they mostly ignore a very important means of helping farmers earn more money for their beans: a focus on improving the quality of the cacao that they certify. Guidelines and specific techniques for improving quality are not a part of the certification process and they should be. Co-ops that produce superior cacao can charge 2 to 3 times the prevailing world commodity price for their beans. That could translate to an additional $1-$2 per pound instead of something around a dime per pound.

I find it objectionable that co-ops have to pay to become Fair Trade certified. Fair Trade is a business, and certifying co-ops should be a cost of doing business - not a revenue center. Many people are not aware that co-ops have to pay to be certified and that the fees often get paid out of the premium (essentially, they're kickbacks even though they're called something else). I personally think that "Fair" Trade would be fairer if the various Fair Trade licensing entities shouldered the cost of certification and either absorbed it as a cost of doing business or passed the cost on to the companies that purchase Fair Trade Certified goods. Alternatively, I challenge cocoa processors and chocolate companies to identify the source of their beans and pay the certification fees on the co-ops' behalf. A couple of thousand bucks doesn't mean a whole lot to a multimillion dollar chocolate company here in the US, but it could mean all the difference in the world for a small co-op looking to become certified but can't because they can't afford to pay the certification fees.

I also find it objectionable that the grower co-ops shoulder all the risk in the Fair Trade equation. The premium paid to the co-op is based on the world commodity price of cacao. There is a ceiling and a floor; the premium paid goes down as the price of cacao rises above a benchmark price. However, the licensing fees that Fair Trade charges companies that want to advertise that their products are "Fair Trade Certified" are the same no matter what the commodity price of cacao is. I think it only fair that the licensing fees charged by Fair Trade be based on the actual value they return to the grower co-ops. I am not exactly sure how this can be achieved - maybe it could be a fixed percentage or (more apropos) the Fair Trade certifiers get paid in beans that they need to sell - but rethinking how the premium is assessed and how it is collected should be seriously considered in order for Fair Trade to equally fair to all of the parties involved.

As a chocolate consumer you need to be aware that you pay a very handsome additional premium for buying Fair Trade certified chocolate. You are probably paying at least a couple of dollars per pound extra whereas the grower makes a lot less than a dime because, you have to remember, one pound of cocoa beans makes more than one pound of chocolate.

And I don't think that's fair. What do you think is fair?

Views: 66

Replies to This Discussion

Another issue to consider with regard to Fair Trade is: the poorest, most remote, least educated, smallest growers (the ones who would benefit most from Fair Trade) find it very difficult, or impossible to get certification due to the certification requirements (paperwork, communication, money - as Clay mentioned). The Fair Trade net has some very big holes in it. This is one of the reasons that we prefer dealing directly with growers and cutting out the middleman, where possible. A shorter supply chain can mean less profit taking along the way, so more money for the growers.

Caveat: Sam and I are always happy to buy Fair Trade products where they are available, as Fair Trade certification has its merits and does benefit the people who can take advantage of it.
I agrre that fair trade has it's problemes but it also has some benefits. One big one for me is the oportunity to eduacte my customers. So many still have no idea of what goes on in the cocoa trade. Also I cannot curently travel to see where and how the cocoa been in the chocolate I buy are grown and harvested. So fair trade is a good option.
I agree Fair Trade certifications are not fair, and Organic certifications are also a long costly process, which does not help small growers and small producers become more competitive, and there are so many certifications around that consumers get confused. At the end, these certifications are intended for the big players.
Hi Clay.... and I agree whole heartedly with you 100%. From my trip to Sambriano Valley, what I saw was that the farmers were totally out of the loop. They charge an arm and a leg for certification and it does not trickle down to the farmers at all. Also you suggestion regarding 'Best Farming Practices' being passed down stream is an excellent on, and again......... Its not done. So even though 'something is better than nothing", I agree. but guess what..... there is nothing you or I can do about it because unless you're part of the operation, like most things, you can shout fro the winds and no one hears..... T


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