Cacao: India’s Futuristic Vision

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Is the government-subsidized support of the growing cacao industry in India, for economic gain or is it another way to exploit cheap labor? Is there enough infrastructure on the local and community levels, to support farmers, and their workers? This is not a binary discussion, of the exploiter vs. the exploited. There are many pivotal points in which the equation for success can fall apart. It is not only necessary to have the support of large companies, but also necessary to have the education in place for the cultivators. India is very near and dear to me. I was born in Calcutta. I grew up in this country and journeyed back to try and understand the language and culture that I experienced only through my parents eyes. My devotion to the people and the country now is of my own invention. The awareness of the future of cacao lies in the understanding that  companies must have–that the key to success lies in the supply chain and a top down approach to supporting the cacao farms. If these elements are carefully looked at with a clarified lens, it suggests that India has a trajectory for enormous success!

Corruption in India exists on multiple levels. The local police are even corrupt—asking for bribes when lorry (truck) drivers are transporting goods. So when it comes to the element of human engagement and labor, is it possible that the unscrupulous will crawl out of the woodwork, and use child labor, or traffic people into quasi slavery relationships? So although, it’s exciting that South India has gotten the governmental head nod to have companies move in and propagate the ideas and tools for cacao farming—what regulations and stopgaps are in place to protect the people to create a successful industry? I believe that the one interesting element of India’s character is that she has the capacity to look ahead into the future and see how she is seated and how to effectively move forward using her greatest resource—the people.   This may seem like a contradiction, the people are the asset, but can also be the element that creates the corruption. Specifically, in an un-mechanized industry such as cacao farming, however, the government has proven itself in the past.

Although, there is so much economic growth in India, and a growing middle class, in the world’s largest democracy, the government struggles to take care of the population and the needs of people on micro levels, such as public funded housing, education, subsidized food or health care. So where there is a need for ‘man-power’ the government has always attempted to utilize the population. Developmental lifecycles of projects in the shadows of corruption can fall apart—so the influence of foreign companies becomes a key ef054fe0e5.jpgcomponent to the overall success, in any industry. Traceability, both governmentally and in the private industry sector, along with a well-formulated project plan will have to become part of the equation. India has managed to do this in the past and place itself strategically in a global competitive market.

I am not talking about call-centers, outsourcing, or the pharmaceutical industry. I am talking about milk. What happened in the milk industry is a parallel universe to what is happening in the cacao development. The milk industry mobilized itself to comprehend what was going to take place in the future. It became a function of growth pattern, prices, realistic production outlooks, national policy, challenges, rising consumption, and cooperatives. The variables were many—growth pattern was not only a function of the population, but also what consistent measures could be taken to address and sustain, what would become a growing need. Milk prices were inherently high at the time. It takes land to be able to sponsor the livestock and produce a quality product. India struggles with agricultural space, because urban areas are expanding.

The government outlook for production was not only to take care of its people, but to also consider how to be competitive in the market place. “Experts feel India should also continue its emphasis on dairy development through cooperatives and private investments to ensure long-term growth and sustainability of the industry. India has the largest bovine population in the world with a large processing capacity of 98.3 million liters per day (Dairy Tech India, 6th edition)”. The challenges were obvious, rapid urbanization, and the need for enough technological development to directly support the farmers, so that there would farm and production sustainability. Cooperatives became a big part of the formula, and with the rising consumption, things had to move fast and steady.  The core of the dairy industry lies with the milk-producing farmer, who gets effected by many factors ranging from fuel and agricultural input prices. Hence, the state of milk producing farmer is crucial for the dairy industry. To sustain the milk production, there has to be a right mix of social, environmental and economic factors influencing the farmer (Dairy tech, sixth edition).

The key categories that reflect the challenges were ‘demand’ conditions, market structure, and factor conditions. To summarize, demand conditions were the deep analysis necessary to understand consumption patterns, size, growth and consumer sophistication to be receptive to new products. Market structure were issues of infrastructure, cooperative development—creating head agencies that would not be interfered with by the government, and quality of the product. An example of this is that in Gujarat the fat content of the milk is the standard by which the quality is measured, so standardizing these parameters created traceability. The final category, which is the most significant, is factor conditions. Factor conditions, are all elements related to the livestock and the farmers. Such as herd inventory (policies that focus on strengthening indigenous breeds for better productivity and veterinary resources) support services (access to technology), transmission of learning (educational programs, which are needed in the rural areas), and entrepreneurial mentality—the farmers would have to take some risks and because loans were given at very high interest rates, fear of how to manage the growth was very real (FAO Corporate Document Repository, Punjabi, Meeta).

The government succeeded! India is now the world’s largest milk producer. They are innovative, the infrastructure has been developed to support the farmers, cooperatives have been created, that are not just ‘consumer feel good labels’, but are truly developed to support one another.

images.jpgThe government has managed to educate the farmers, in milking technology, and livestock care. The people of India have access to milk, no matter what their economic standing. Consumers have trust in the product and are receptive to other products such as cheese and ice cream. The foresight was outstanding!

So looking into the future once again, we see that “India is working up a voracious appetite for fine chocolates” (Quartz, Karnik). Obviously, the world’s largest populations are a prize for choimages-3.jpgcolate companies such as Hershey, Ferrero, Cadbury and Mars. However, Mondelez (formally Cadbury) introduced a five rupee chocolate bar for rural dwelling Indians. This was the initiative to generate income and also to develop more refined selections for urban dwelling, and economically rising Indians.

Amul (which was the milk company of my youth) joined forces with Cadbury in the rural sector. Companies became active in pursuing the necessary data points to see where the consumer market is, and where it was growing. Western India accounts for forty percent of national consumption, followed by the North at twenty three percent, the South at twenty-two percent, and then the East at fifteen percent (Confectionary, Neiburg). It’s fascinating to consider how many arms there are to the chocolate industryimages-2.jpg. So in terms of swinging the pendulum back to the milk industry and swinging it forward to the chocolate industry—we can see that the consumer base and development of consumer confidence is essential for success. The receptiveness of new product consumption, while
making it economically accessible to the rural communities (as opposed to a luxury item) is also critical. It should be noted that these rural communities are going to be the corner stone for the development of the cacao industry, so their participation in the final product is key to the quality on foundationary piece, in regards to farming.

The government in India tends to be a bit bifurcated. This is not only based on personal experience. This may be in part because, individual states tend to have their own cultural and social politics. There is a language, culture, food, even dress divide from state to state. So the government initiatives are not what we would typically imagine in terms of being generous with micro-loans, land, or taxation. The government is basically agreeing to stay out of the way to allow private industry to support farmers and create the necessary infrastructure. What the government is very aware of is the capability to have massive impact on cacao production. Mondelez is about to complete fifty years of the cacao initiative in South India. They supported the farmers with the seedlings and the education to recognize (diseases. One hundred thousand farmers were supported and succeeded.

“Farmers were educated about the cultivation techniques and were offered buy-back guarantees to mitigate financial risks associated with the cultivation of the crop. Over the years, cultivating cocoa has made several farmers financially independent” (Rediffbusiness, March 2015).

It seems that all systems are a ‘go’. The issues of present-day consumption and how to propagate marketing and consumer consumption for the future are all moving in the right direction. Agricultural challenges and allocation, education for farmers has been understood. Quality of product, disease control developmental plans for transport. The government seems to understand that both domestic and international companies want to flourish in India and enhance the economy. The challenges are identified, the target is live, so to speak, and the movement is underway. All of this could be super imposed on the images of the milk industry and how it was developed. These data points are necessary to have.

However, India was not chosen only for the climate, it was also chosen because there is a population that can contribute to the necessary labor required for cacao farming. The low-cost of labor was also very attractive. A population of over a billion people and a growing middle class sector that is seeing economic growth of over six percent annually and consistently for the past five years—yet there are impoverished people who can be taken advantage of.   The United Nations defines poverty as: Fundamentally, poverty is the inability of getting choices and opportunities, a violation of human dignity. It means lack of basic capacity to participate effectively in society (Wikepedia).  Forty percent of Indians live in poverty according to the 2015 consensus. This is a cause for concern. A population of that size that cannot be monitored effectively or efficiently, specifically because of rural dwelling citizens—traceability and transparency in the supply chain, becomes key to making sure that the lessons that were learned in West Africa are not replicated. “Anti-Slavery International, along a number of other international organizations, is currently working with the chocolate company Mondelēz International, as part of their recently announced Cocoa Life programme, to try to obtain just such an approach” (Equaltimes, MCQuade, 2013).

Child labor is caused by poverty, lack of alternative opportunities, cultural rationalizations (i.e. contribution to family income) and large-scale economic forces (Martin, March 23, 2016). Interesting how this attaches so completely to the definition of poverty—they are almost interchangeable statements.

images-1.jpgSo what should we be looking out for? Transparency in the supply chain is where the cacao industry has failed in the past. Understanding that cooperatives have been created and fair-trade labels are an attempt to create transparency and educate the public on the issues related to cacao harvesting. But the labeling on packages, and the lingo that goes with so many of them are truly only making the consumer feel better. Fair trade happens in the poorest of countries and is slow and insufficient (Sylla, obj. 6, march 23).  The cooperatives and accreditation can be costly to buy into and there is no guarantee after all those efforts that they will have total market sales at fair market value. So when those elements remain unsure, the quality of the product is also in jeopardy.

So as we recognize two issues, both universal truths, that of course forced labor is unacceptable and that transparency is critical. But there is an even bigger issue, as Mikell suggests, it is the disparity between urban and rural social constructs. Establishing rural labor policies that would encourage sexually balanced labor and facilitating national economic linkages (Martin, slide 64, March 23, 2016). This also speaks to the idea of a ‘top down’ approach where companies would have to have transparency, indicating what percentage is going directly to the farmer. Direct trade labels encourage this information being transparent.

It is my belief that only by establishing credible collaborations between government, the private sector and the not-for-profit sector that a efficiency of expertise can be assembled to begin to properly tackle the various human rights abuses present in diverse business supply chains. “Cultivation of cocoa is a delicate process, as the trees are susceptible to changing weather patterns, diseases, and insects. Unlike larger, industrialized agribusinesses, the vast majority of cocoa comes from small, family-run farms, which often rely on outdated farming practices and have limited organizational leverage. Steadily increasing demand from worldwide consumers encourages a number of global efforts and funds committed to support and improve cocoa farm sustainability”(Equal times, McQuade, 2013).

Maya Angelou once said, “When we know better we do better”. It’s a powerful thought. We have recognized the problem, and we understand the complexity in solving it. It is suggested that cacao farming is much less rigorous than other types of farming, but the fact that the industry is reliant on human hands to deliver the product is an empirical fact. India is very good at recognizing the needs of today and how to re-invent herself for the needs of the future. The alliances between companies to develop infrastructure is massive. The industry, invests in farmers, offering jobs, and education—they have government support to forge ahead and obtain precious agriculture lands, the establishment then formulates standardization in quality. Understanding that men and women alike are contributors to the cultivation and that the rural sector and the urban sector are also contributors, helps blur the gender and economic divides. The transparency and traceability in the supply chain come from looking at the interconnectedness of these relationships. Mondelez, Amul, Cadbury and many more will have to continue the dialogue in an open forum. Only then, can cacao farming in India become another invention of her future in a global market place!

 

Works Cited

Chandrasekhar, Anand. Swiss chocolate opens doors for Indian cocoa farmers. 26 Nov 2014. 01 May 2016 <http://www.swissinfo.ch/eng/sweet-crop_swiss-chocolate-opens-doors-for-indian-cocoa-farmers/41103448&gt;.

 

CHOCOLATE AND CHILD LABOUR: ENDING THE BITTER HARVEST. 14 Feb 2013. 21 Apr 2016 <http://www.equaltimes.org/chocolate-and-child-labour-ending-the-bitter-harvest?lang=en#.Vy8u5aODGkp&gt;.

David McKenzie, Brent Swails. Child slavery and chocolate: All too easy to find. 19 Jan 2012. 28 Apr 2016 <http://thecnnfreedomproject.blogs.cnn.com/2012/01/19/child-slavery-and-chocolate-all-too-easy-to-find/&gt;.

Garg, Rajesh. YouTube. 6 Feb 2011. 06 May 2016 <https://www.youtube.com/watch?v=Pk9bmUWqk3c&gt;.

Harrison-Dunn, Annie- Rose. ConfectionaryNews.com. 10 Apr 2014. 02 May 2016 <http://www.confectionerynews.com/Ingredients/Mars-to-source-cocoa-from-India&gt;.

India has a ‘bright’ confectionary future . 12 Dec 2012. 01 May 2016 <http://www.confectionerynews.com/Markets/India-has-a-bright-confectionery-future&gt;.

Karnik, Madhura. The delicious truth: India is one of the fastest growing chocolate markets in the world. 09 Jul 2015. 01 May 2016 <http://qz.com/445298/the-delicious-truth-india-is-one-of-the-fastest-growing-chocolate-markets-in-the-world/&gt;.

Martin, Carla D. Chocolate, Culture, and the Politics of Food. 03 May 2016 <https://canvas.harvard.edu/courses/8130&gt;.

Media Today Pvt. Ltd. India’s Dairy Industry. 2016. 01 May 2016 <http://dairytechindia.in/Industry-Backgrounder-of-dairytechindia.html&gt;.

Mendelez International. Cocoa Life. 21 Oct 2014. 02 May 2016 <http://in.mondelezinternational.com/well-being/cocoa-life&gt;.

Nieburg, Oliver. Evolve Indian cohcolate market in permium space. 9 Nov 2012. 06 May 2016 <http://www.confectionerynews.com/Markets/Evolve-Indian-chocolate-market-in-premium-space-says-analyst&gt;.

. Untrapped potential for chocolate makers in rural India, says ValueNotes. 25 Sep 2014. 01 May 2016 <http://www.confectionerynews.com/Markets/Rural-India-chocolate-market-set-for-growth&gt;.

Punjabi, Meeta. India: Increasing demand challenges the dairy sector. 03 May 2016 <http://www.fao.org/docrep/011/i0588e/I0588E05.htm&gt;.

WorldCocoaFoundation. “Cocoa Market Update.” 01 Apr 2014. WorldCocoaFoundation.org. 03 May 2016 <http://www.worldcocoafoundation.org/wp-content/uploads/Cocoa-Market-Update-as-of-4-1-2014.pdf&gt;.

 

 

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