Fair Trade:  How It Is Practised in the Chocolate Business

We at Project Hope and Fairness support the principles of Fair Trade. TransFairUSA is the certifying agency in the United States. Its website may be found at transfairusa.org and details about Fair Trade can be studied there. For cocoa, Fair Trade has these benefits... 1. A $1600 per MT fioor for the world price. This is a basic fioor and premiums can be added on. For example, Ghanaian beans might be sold for more money than Ivorian beans because the perception is that Ghanaian beans are larger and fattier and since cocoa butter is, like milkfat, at a premium, they would command a higher price than the Ivorian beans. If the world cocoa bean price actually exceeds the Fair Trade minimum (which has happened), then the FT fioor rises to follow the world price. In real practice, cooperatives that sell Fair Trade might sell only a small proportion of their beans that way. Kuapa Kokoo only sells 1.8% of its cocoa Fair Trade. This is through no fault of the cooperative but mainly because the market for Fair Trade cocoa beans is so small. It is also because many of the Fair Trade beans sold come from the Caribbean, where the cooperatives are also organically certified. Unfortunately, no cooperatives in West Africa are organically certified. In Ghana, where the government controls the cocoa business at all levels, including the spraying of crops, organic certification is unlikely to happen any time soon. In Ivory Coast, where the government has a long history of laissez fairecapitalism, it is possible for a cooperative to seek organic certification. To my knowledge, however, no attempts have yet been made to seek it. 2. A $150 per MT social premium. This is a premium that is voted on by the members of the cooperative. At Kavokiva, the members elected to build a clinic with the premium. At Kuapa Kokoo, local “societies” vote on what to do with their premiums; thus, some have used them to drill water wells, others to establish clinics, and others to produce communal toilets. 3. A Fair Trade-certified™ cooperative must have a diversification officer. This is someone who helps women start businesses. In West Africa, the male grows and tends the cash crop, in this case, cocoa. The woman, who is responsible for raising the children and seeing to it that they go to school, often sells things to make ends meet and to pay for school fees. Thus, women might grow and cook plantains to sell at the local market. A diversification officer would show the women how to grow the plantains. At Kuapa Kokoo in Kumasi, Ghana, much emphasis has been placed on showing women how to make soap from rejected cocoa pods and by burning the pods to make ash. 4. A Fair Trade-certified™ cooperative runs periodic educational sessions. These might focus on the proper use of a pesticide, fungicide or fertilizer. Or, the sessions might focus on child labor issues: what is permissible or not permissible given that Europe and the United States are designing and enacting child labor free certification systems. Or, the sessions might focus on proper use of one's land to preserve the humus content of the soil and to combat bush fires caused by environmental degradation and by global warming. 5. Most West African farmers have no access whatever to credit. Thus, if a child is seriously ill, the parents either jeopardize their family's fiscal health or they allow the child to sicken and die. If a family cannot afford school fees, there is no way to borrow the money, either. Or, if a piece of land becomes available and a farmer doesn't have the money, he cannot increase his earning capacity because he has no way to borrow the money. Fair Trade-certified™ cooperatives provide no-interest to low-interest loans so that such situations do not occur in their membership.