Fair enough?
A guaranteed minimum price; a price that is higher than the standard; a guarantee to take all the production that meets the quality criteria; and a long term contract - no wonder cocoa producers like "fair trade" deals.
By selling and purchasing direct, producers and chocolate companies cut out the middlemen, to the financial advantage of both parties. The "fair trade" market is still small but it is growing fast in Europe as consumers find they enjoy feeling good about the support they are giving to producers by paying a little more for a luxury item otherwise perceived as pure self indulgence.
Organizations conferring a "fair trade" mark vary in the detail of their rules but require that producers retain control of their farms and their production, and that production methods are neither harmful to themselves nor to the environment. There is usually a social element to the agreement which puts money into community projects. From the point of view of marketing the product, "small scale" is what attracts consumers who argue that the big boys can look after themselves. Green & Black, who sell their Maya Gold chocolate under the Fairtrade mark, trade directly with 350 farmers in Belize and 600 in Togo who, they claim, are small family growers.
From the producers point of view, the advantages are obvious but for the arrangement to work, the chocolate companies need to see strong local producer associations.
Kuapa Kokoo, is a farmers' union in Ghana's cocoa belt, a cocoa-purchasing company and a trust fund for its members, which now number some 30,000. Set up in 1993, when the parastatal cocoa purchaser, Cocobod, was partially privatised, Kuapa works on the principle of local societies of farmers, organizing the collection and sale of their own cocoa to the cocoa- purchasing arm of the business. The price paid is higher than the Cocobod farmgate price. Some of the premium goes directly to the growers and some to the local Kuapa societies who, at the end of the year, meet to divide up the year's profit. About 10% of Kuapa's cocoa is sold to fair trade organizations and for this an additional premium is earned of between 10% and 20% of the world price. When the world price is low, the percentage goes up, and vice versa, thus flattening out the market fluctuations that can be so destructive of farmers' livelihoods. This extra premium goes into the Kuapa trust fund and is used for community development projects - education and health services, for example. Community development projects are a characteristic of such fair trade deals.
Seeing the success of the "fair trade" business, large multiple retailers in Europe are becoming interested in offering their own-label fair trade range. The UK government's Ethical Trading Initiative, set up by DFID, is working to persuade retailers in Britain to agree a common code of conduct for sourcing own label goods, including cocoa. Tesco, one of the UK's big five supermarkets, is selling its "Divine" chocolate range as a fair trade product.
Chocolate is a luxury and some consumers are willing to pay a premium if it has a "fair trade" mark, but the quality must be at least as good as that of cheaper chocolate. Growers and chocolate companies both have to keep their standards up; the growers must deliver the goods and the companies must make sure the deal remains fair. Fair enough?
