Solutions to ethical dilemmas in the cacao-chocolate industry by the bean-to-bar chocolate company, Taza Chocolate.

  1. Introduction

Taza is a bean-to-bar chocolate company based in Somerville, MA, that addresses contemporary issues in the cacao-chocolate supply chain in unique ways. Founded in 2005 as a small, local company, operating on one rented floor of a warehouse in Somerville, the company focused on ethical trade and organic production, in addition to traditional production methods, from its inception. It has now expanded to a nationally sold company with enough capital to more effectively influence the cacao supply chain. By investing and interacting directly with organic cacao farms in South America and the Caribbean, the company is able to ensure that more money is going directly to the farmers and that ethical farming practices are being rewarded. They call this practice “direct trade,” and developed it as an alternative to Fair Trade, which has become controversial in recent years due to questions over its actual impact on small farmers and the cost and difficulty of obtaining such a certification. Further, in order to ensure their own adherence to this direct trade model, as well as to open the possibility of other companies aligning with this model, they have hired a third-party company to verify their sourcing program every year according to the policies they laid out. In addition to their Direct Trade program, Taza also maintains a high ethical standard in other company practices. In reviewing their materials, one finds that they do not rely on exploitation of the image of the cacao farmer as a victim, but instead use images and language that portray them as strong, independent individuals, with pride in their work. They do not rely on exploitative sexual or racial images in their advertising, as too many contemporary chocolate companies do, but instead rely on the unique quality of their product. In these ways, Taza is one of the most ethical chocolate companies currently in operation, and should be used as a model for other companies.

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Taza Direct Trade Certification Logo. Taza has outlined a list of rules to which they adhere and are held accountable by a third party organization they hired.
  1. Current issues in the cacao trade

Cacao is an export of developing countries in tropical regions, and as such, is faced with the economic and agricultural issues associated with developing countries. Cacao is often purchased by middlemen in the country or region in which it is produced, who then export the product to chocolate producers abroad, mostly in the U.S. and Europe. These middlemen purchase cacao from farmers at much lower prices than the global value of cacao, thus earning most of the export’s value for themselves, and returning little to the farmers. This system can sometimes be simply be a result of exploitative middlemen, yet may also be more complicated; often, a combination of local and national laws and regulations, social or societal norms and expectations, and access to global markets, plays a role in this low monetary return to the cacao farmers (Martin, Lecture 8). Whatever the case, the low wages paid to individual cacao farmers has a negative effect on the industry in a variety of ways: forced or coerced labor can result if farmers are under pressure to produce products at such a low cost, unsustainable practices are used, and there is little incentive to improve the quality of the product (Sylla, 26-40; Off, 100-140; Berlan, 2013).

These issues are not new to the cacao industry. Following the abolition of slavery, slave labor or ‘unfree’ labor practices continued on cacao plantations in parts of Africa (Higgs, 133-150), and have continued to this day. Presently, one of the largest, and most publicized, labor issues in cacao production is the use of child labor. The causes of this coerced labor are often very complex and difficult to address, and can range from direct child trafficking in clearly forced labor situations, to micro-pressures such as fear of family breakdown or socio-cultural tradition (Berlan, 2013). Further, the growing popularity and commercialization of chocolate in the U.S. and Europe throughout the 20th century caused a push for larger quantities of cheaper cacao beans, and local and international responses to agricultural and economic events throughout this time period has further complicated production and exportation (Martin, Lecture 8).

 

  1. Attempts at repairing the cacao trade

Because these issues in the cacao industry are difficult to understand and cannot be easily generalized, the responsibility falls on chocolate companies to ensure that the beans they purchase are ethically produced. As local governments and international organizations are often unable to adequately enforce fair labor practices broadly, responses to such issues have mostly taken the form of using the free market to incentivize adherence to a set of principles in cacao and other agricultural practices.

 

3.1. Fair Trade’s impact and controversies

One of the most well known of such incentivizing organizations is Fair Trade USA, which promises fair wages to workers, no use of forced, child, or exploited labor, safe working conditions and reasonable hours, and environmental sustainability, among others (Martin, Lecture 10; Fair Trade USA, Mission/Values). Whether Fair Trade USA succeeds in these goals is unclear, yet the company certainly has at the very least raised consumer awareness about the issues facing the farmers that produce much of the world’s chocolate, coffee, sugar, and even produce. However, critics of Fair Trade USA believe that the organization fails in the following ways: fails to deliver the promised higher wages to the individual farmer and to developing countries in general; makes it too hard and expensive to obtain certification, so that only large, wealthy farms are able to obtain it; it actually harms small farms that do not have certification; they do not incentivize quality; and it fails to adequately monitor standards; and the farmers do not have enough of a say in the production of their product, among others (Martin, 10; Dickinson; The Fair Trade Shell Game).

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Screen grab from “The Fair Trade Shell Game,” which criticizes the Fair Trade USA certification. The major complaint of this video was the lack of incentives for increased quality of the product in Fair Trade farms, and the lack of farmer input into the process.

3.2. Taza’s solution: Direct Trade

Taza decided to pursue a different approach to ethical sourcing of cacao beans for their chocolate. Rather than relying on an organization like Fair Trade USA to certify cacao farms with its standards of ethical trade and not necessarily effective practices, Taza began engaging with cacao farms directly, investing in farms that would agree to meet their standards of ethical production. This approach is called ‘Direct’ trade, and involves direct engagement of the chocolate company with their bean producers. This means the company must send a representative to each cacao farm they buy beans from at least once a year to check in and ensure their standards are still being upheld, and while it requires more effort on the part of the chocolate company, it seems to have a clearer positive impact on the farmers and their communities than Fair Trade does.

The clearest way in which Direct Trade is a better alternative to Fair Trade for achieving the same goals is its placement of financial responsibility with the cacao buyer, as opposed to the cacao producer. The cacao farms involved in direct trade with Taza, as opposed to those that go through the Fair Trade certification process, do not have to pay to have their farms certified in order to receive the higher premiums. Rather, Taza takes the responsibility of visiting farms and cooperatives, investing in, and paying higher premiums to ones that agree to meet their direct trade program commitments. Additionally, in 2011 Taza took the step of hiring a third party to certify their adherence to this program, to ensure that they do not deviate from the values themselves, thus taking further responsibility in ensuring their beans are ethically produced (Taza, Taza Direct Trade). Having the financial responsibility fall on the chocolate companies that buy the cacao beans ensures that more money is making it back to the farmers, and allows for smaller farms with less capital to participate in the program.

The Taza Direct Trade Program is verified by the third party company Quality Certification Services, and consists of five ‘commitments,’ or rules to which Taza must adhere. The first two of these commitments have already been mentioned, and are 1) the development of direct relationships with the farmers from which they purchase their beans, and 2) the payment of a premium to their cacao producers, specifically a premium of at least 500 US dollars per metric ton. The program then also has a quality standard based on fermentation rate and moisture of the beans, requires USDA organic certification from their suppliers, and requires Taza to produce an annual transparency report that details their cacao bean purchases and interactions with the farmers over the prior year (Taza, Direct Trade Program Commitments). One can see the way in which these rules interact to ensure more benefits for the farmers, as well as incentivize increased quality of the cacao beans: their paying of high premiums, along with quality standards and farm visits, rewards farmers for production of better beans; their commitment to produce an annual transparency report that is verified by a third party ensures that they continue to treat their producers ethically as outlined in their first two commitments.

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Cover of a transparency report by Taza Chocolate. The Transparency reports detail interactions with farmers with photographs and descriptions, as well as accounts of trade. This photo is also a demonstration of positive portrayal of cacao farmers, as described in section 4.

There is one imperfection with the Taza Direct Trade Program that stands out: their requirement of USDA organic certification, a certification for which the farmers need to pay and which cannot be reimbursed by the USDA in any of the countries in which Taza has cacao suppliers (USDA, Organic Cost Share Programs). This requirement is reminiscent of Fair Trade USA, despite Taza’s desire differentiate itself from Fair Trade USA and to reduce the burden it places on the cacao producers. However, the USDA certification is often less expensive than Fair Trade certification, and many companies that purchase Fair Trade agricultural products would also require USDA organic certification, making the Taza Direct Trade Program still substantially less expensive for farmers than Fair Trade, and Taza investment in new cacao farms alleviates such costs (USDA, Organic Certification and Accreditation; Taza, Annual Transparency Reports 2011-2015).

 

  1. Taza’s other positive influences

In addition to Taza’s Direct Trade Program, the company also maintains high ethical standards in their advertising and their portrayal of cacao farmers. They do not rely on the sexualization of women to sell their chocolate, as many companies do, but instead use their ethical sourcing practices and the uniqueness of their product to sell their chocolate bars. Further, they do not exploit the image of cacao farmers as victims when portraying their ethical sourcing, but instead use images of the farmers proudly displaying their work, and write about the farmers’ lives, interests, struggles, and successes, in a very human and relatable way in their transparency reports (Taza, Transparency Reports 2011-2015). For these reasons in addition to their excellent direct trade program, Taza should be used as a model for other chocolate companies in combating the ethical problems in the cacao-chocolate industry.

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Screen grab from a dutch video that portrays cacao farmers in Africa only in the context of ‘exploited.’ The intentions of the video-makers are in the right place, but portrayals like this support an exploiter/exploited binary that is oversimplified.
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This photo from a transparency report is instead a good example of portrayal of cacao farmers as relatable people, with pride for their work
  1. References

Berlan, Amanda. “Social sustainability in agriculture: An anthropological perspective on    child labour in cocoa production in Ghana.” The Journal of Development   Studies 49.8 (2013): 1088-1100.

Dickinson, Rink. “An Analysis of Fair Trade: Reflections from a Co-founder.”       InterReligious Task Force on Central America. Cleveland, Ohio. 02 May 2016.   Speech.

First Taste of Chocolate in Ivory CoastMetropolis. VPRO Metropolis, 21 Feb. 2014.      Web. 30 Apr. 2016.

Higgs, Catherine. Chocolate Islands: Cocoa, Slavery, and Colonial Africa. Ohio     University Press, 2012.

Kierz, Shane. Front Cover, Taza Annual Transparency Report 2014. Digital image. Taza   Chocolate Company. Taza Chocolate Company, Sept. 2014. Web. 3 May 2016.

Last, Jesse. Annual Cacao Sourcing Transparency Report. Rep. 2015 ed. Somerville,         MA: Taza Chocolate, 2015. Print.

Martin, Carla D. “Lecture 8: Modern Day Slavery.” Aframer 119x. CGIS, Cambridge,       MA. 22 Mar. 2016. Lecture.

Martin, Carla D. “Lecture 10: Alternative Trade and Virtuous Localization/            Globalization.” Aframer 119x. CGIS, Cambridge, MA. 6 Apr. 2016. Lecture.

“Mission/Values.” Fair Trade USA. Fair Trade USA, n.d. Web. 03 May 2016.

Off, Carol. Bitter chocolate: Investigating the dark side of the world’s most seductive         sweet. Vintage Canada, 2010.

“Organic Certification and Accreditation.” Agricultural Marketing Service. United States   Department of Agriculture, n.d. Web. 04 May 2016.

“Organic Cost Share Programs.” Agricultural Marketing Service. United States       Department of Agriculture, n.d. Web. 04 May 2016.

Our Direct Trade Program Commitments. List of Principles. Somerville, MA: Taza          Chocolate, n.d. Print.

Sylla, Ndongo. The fair trade scandal: Marketing poverty to benefit the rich. Ohio University Press, 2014.

“Taza Direct Trade.” Taza Chocolate. Taza Chocolate Company, n.d. Web. 03 May 2016.

Taza Direct Trade Certified Logo. Digital image. Taza Chocolate Company. Taza Chocolate Company, n.d. Web. 2 May 2016.

The Fair Trade Shell Game. Markham Nolan, Dusan Sekulovic, and Sara    Rao. Vocative.             Vocative, 20 Dec. 2013. Web. 4 May 2016.

Whitmore, Alex. Annual Cacao Sourcing Transparency Report. Rep. 2014 ed.       Somerville, MA: Taza Chocolate, 2014. Print.

Whitmore, Alex. Annual Cacao Sourcing Transparency Report. Rep. 2013 ed.       Somerville, MA: Taza Chocolate, 2013. Print.

Whitmore, Alex. Annual Cacao Sourcing Transparency Report. Rep. 2012 ed.       Somerville, MA: Taza Chocolate, 2012. Print.

Whitmore, Alex. Annual Cacao Sourcing Transparency Report. Rep. 2011 ed.       Somerville, MA: Taza Chocolate, 2011. Print.

Whitmore, Alex. Gabriel Pop, General Manager at Maya Mountain Cacao, proudly          stands in their new drying house. Digital image. Taza Chocolate Company. Taza           Chocolate Company, Sept. 2012. Web. 3 May 2016.

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