Tuesday, July 22, 2014

My Munchable Soapbox: Unfair Trade

It’s interesting how one can write on a topic for a good number of years – relying on reports and media – and have based so many actions and critiques on second or third hand information. And yet, when actually confronted with the reality of something, it is evident how simplified and dumbed-down it may become. Fair trade seems to fit this bill – attempting to distill very complex socio-economic (and to some extent ecological) commodity systems down to a mere label

As many of you know, I am in Ghana this summer chatting with cocoa farmers. As the third (almost second) largest producer of cocoa, Ghana provides an interesting study in where this ideal system of “fairness” breaks down. There are a number of companies, as you would imagine, operating in the country, including Akuapa Cooperative – the exclusive supplier of cocoa to the Fair Trade chocolate manufacturer, Divine. While it does provide community development project support for things like schools, it is hard to track down direct benefits to the thousands of cooperative “members”. In fact, few of the farmers with whom we spoke even seemed to realize that it is a cooperative, nor had any clue about types of certifications. I am sure if I had a conversation with someone at Kuapa Co., a more satisfactory answered could be supplied, but from this point, it smells a bit fishy that there is such little awareness of what the cooperative claims to do.

The other issue that makes something like Fair Trade in the country perhaps a bit misleading is the fact that Ghana’s Cocoa Board places a fixed price on cocoa. This can be very useful in relieving uncertainty and avoiding massive fluctuations in price that cocoa farmers in other parts of the world experience. On the other hand, it is hard to financially reward farmers for good management or producing high quality beans. One of the purchasing clerks (the individual who weigh the beans and send to the company’s depot) was showing us the difference in beans that are properly dried and those that not. Despite the higher price it likely fetches at some point along the value chain, the farmer sees none of that, no positive reinforcement for proper management and processing. What frustrates me is that someone gets rich; and that is someone other than the farmer.

It is sad, because so little thought goes into this dilemma on the consumer end. You can easily hand over a dollar for a large Hershey’s bar, or a Cadbury bar in the UK, without a care about those that ultimately lose out, those who actually produce the raw material and yet never see the finished product. I’m not quite sure what the answer is, though I think after this summer, it will be hard to stomach any more big brand cheap chocolate. Trusting a single label is an error, but it is possible to track down companies who practice more direct trade and try conducting some or all processing at the origin. The costs are higher, but when you think about what goes into a single bar of chocolate, anything else seems like highway robbery!

Read more about Fair Trade and Kuapo Kokoo.


Mickey Friedman said...

So,the farmer, even though they are a member of a coop and part of "Fair Trade", get no higher remuneration for producing quality beans. If this is the case, why would you only buy the higher priced chocolate that makes the chocolate companies wealthy, not the farmers? It sounds like the farmer is indifferent as to whether you buy Hersheys or Theos.

Cioccolata said...

Thanks for this; an important point of clarification! So, anyone who sells to Kuapa is technically a member just by virtue of having a stake in the company. There are a subset of farmers who are also "fair trade" certified, although the ones in the communities I'm in are not. However, because of how Ghana prices cocoa, it is not clear that the price premium makes a difference. Kuapa does invest in schools and boreholes, etc. but so do many other cocoa companies buying in Ghana, as part of their CSR. This is not the case for all cocoa producing countries. Also, Theo is not fair trade certified, but rather has a different fair pricing arrangement (and Madecasse, which you know I love, is direct trade...much better). The system is not so bad, and having a stable price is pretty handy, but the bigger point is that it is dangerous to blindly accept a certification or label just at face value, because there is considerable variation between commodities and between geographies!