All posts by 2016x804

How to Move Towards a Sustainable Cocoa Market

Sustainability within the cocoa industry has become an increasingly common buzz word, but it is a term more often than not kept vague and unqualified in order to obfuscate the amount of progress that the industry has made in regards to sustainability in regards to issues that stretch from agricultural methods to fair labor practices. While initiatives, public statements, and advertisements released by cocoa corporations of all sizes often address issues of sustainability, it is often a marketing ploy to engage with socially conscious consumers as opposed to a goal to actually improve flaws in the cocoa supply chain. How many schools have chocolate companies claimed to have built in places like West Africa, and how does that exactly improve the lives of underpaid farmers? The following video, produced by Fair Trade America introduces the range of initiatives the company claims through the filming of seemingly daily life at a cacao cooperative in West Africa.

A plethora of Fair Trade initiated programs market themselves in manner to emphasize that they have increased the well being of local farmers and their families, is not made clear how financially and programmatically they have been achieved. It is important as consumers who are subject to the marketing campaigns that make companies appear more socially and economically responsible to be able to weed out superficial attempts at sustainability from those that may make a difference, for better or for worse, in order to better make informed decisions. This paper aims to demystify the definition of sustainability within the cocoa supply chain- sustainability from the perspective of farmers, specifically, and outline methods through which such sustainability can be achieved.

Unsustainable practices can be found in many aspects of cocoa production. In terms of horticultural and agricultural processes, very little is known about the cacao plant. It is a manually intensive plant to harvest, and in recent years it has become more and more fragile and susceptible to disease. This decrease in productivity due to the plant’s genetics, age, and horticultural practices have not only negatively impacted supply for large companies, but the lack of income has contributed to many sociocultural issues surrounding farmers in affected regions. The lack of agricultural sustainability, while not the only influential factor, has a direct relationship to the lack of financial sustainability of cacao farmers which ultimately leads to socially and culturally unsustainable practices like child labor. To better put this one plant into perspective, around 50 million lives depend on Theobroma cacao, and in the Ivory Coast alone, 15% of the country’s GDP is dependent on the raw good which translates to about 5% of the country’s households [1]. To these farmers, according to Peter Laderach of the International Center for Tropical Agriculture who studies the effects of climate change in cacao farming region, the cacao trees are “’like ATM machines. They pick some pods and sell them quickly to raise cash for school fees or medical expenses. The trees play an absolutely critical role in rural life [2].’” A rift in the supply of cacao beans for these farmers could be catastrophic to their wellbeing.

The challenges that farmers face in reaching sustainable harvesting regimes range from poor knowledge of best farming practices, older plants with diminishing yields, increases in pest and disease, and the looming threat of climate change; oftentimes farmers face the entire range of issues. In Brazil, for example, disease like Witches Broom reduced production by 80% in the late 80s. Now, another disease, Frosty Pod Rot, has been spreading through Latin America while cocoa swollen shoot virus, the cocoa pod borer, black pod rot, and water mold affect plants in Africa [3]. If Witches Broom and Frosty Pod Rot were to reach West African growing regions, from Latin America, where the majority of the crop is grown, the affects to cacao production would be devastating [4]. Other factors negatively impacting crop yields include a very narrow band of growing compatible growing region along the equator and a diminishing gene pool due to a history of inbreeding. This lack of genetic diversity has exacerbated the species’ ability to combat disease and other hardships.

In light of these issues, many efforts have been taken, especially by large chocolate production companies, in order to produce more resilient plant specimens that will produce more pods and are more resistant to disease and pests. Many, like Nestle, Mars, and Hershey’s, have taken a scientific approach to studying the genetics of the cacao tree in order to increase yield. The video linked here quickly describes the race between teams of scientists at both Mars and Hershey’s to map the genome of the Theobroma cacao plant in order to find answers to disease and pest resistance. Nestle has also placed many resources and efforts into research and development of “super saplings” that will be able to increase yield. Nestle plans on giving away 12 million of these saplings to farmer in 2022.

Both the genetic sequence and selective breeding of cacao plants are crucial in identifying the ideal specimen. Tests done on naturally resistant plants and their offspring are helpful but slow, and the process is greatly sped up with the help of a mapped genome that better identifies where disease and pest resistance genes are located [5].

In all cocoa growing regions, 30-40% of crops are lost to disease and pests [6], and while the efforts to genetically modify the perfect cacao plant are helpful, there are a myriad of other factors that stand to undermine this single faceted approach. Soil fertility, for example, has decreased in many of the growing regions. In fact, oftentimes in abandoned coffee plantations that have moved for higher elevations in order to reduce instances of pest and disease, cacao would take its place as it is less fragile than coffee plants. Additionally, the lack of socio-political infrastructure in many cacao growing regions, for example, coupled with the fact that the cacao farming community is made up of tiny scaled operations in large numbers, makes it incredibly difficult to disseminate change across an entire region and making progress a slow endeavor. Overall, a lack of access to education affects all aspects of a farmer’s financial and social well being. From access to latest technologies to professional literacy, farmers are at a huge disadvantage in terms of setting themselves up for long term economic sustainability. The looming threat of climate change also further exacerbates all of the aforementioned issues.

Given the complexity of issues that stand in the way of sustainability for farmers, the focus of companies like Nestle, Mars, and Hershey’s in finding the ideal cacao plant to increase productivity and therefore profit margins for farmers and ultimately themselves is insufficient in the holistic improvement of the livelihoods of cacao farmers. Take the introduction of cacao to Vietnam as a case study; cacao plants and knowledge of how to plant and harvest them were well distributed to farmers in the 1980s, but after demand for cocoa disappeared after the fall of the Berlin Wall, farmers slashed their crops out of frustration [7]. This demonstrates that access to plants and planting knowledge is merely one facet of many in building a more resilient livelihood out of cacao farming. The lack of control or input and general knowledge regarding the global market of cocoa production and consumption puts farmers at a huge disadvantage and at the mercy of chocolate makers.

In that respect, the work of smaller, niche chocolatiers like Taza and Equal Exchange are a great complement to the top down scientific research of larger corporations. Due to the scale of their operations, smaller chocolatiers are able to form closer relationships with their cacao producers and create a more mutually beneficial relationship that may raise prices for consumers, better reflects the price point of a sustainable supply chain. Shared knowledge about how cocoa should be grown and how cocoa products should be evaluated is still burgeoning, but one effort that Equal Exchange has been pushing is the development of testing and tasting labs within the region of cultivation to better bridge the knowledge gap between farmers and those buying their goods. How can farmers be expected to produce better quality cacao beans for a higher price if what they are producing is a very foreign product or is too valuable as an export to be consumed? The following video, while is a dramatization of reality, begins to hint at the disparity between those who cultivate and those who consume.

The point to take home isn’t that farmers are unable to enjoy the fruits of their labor, but rather the roadblocks that stop farmers from understanding what happens to their goods after they leave their farms. It is beneficial for all when farmers are as fully aware of the chocolate making process so that they may be able to make decisions about how to plant and harvest for a better product as opposed to constantly relying on manuals and instructions from outside organizations and companies who do not always have the best interests of the farmers as a main priority. Sustainability for a farmer includes the ability to affect the economics of cocoa as opposed to perpetually being victim to the rising and falling prices of cocoa. Overall knowledge and more involvement are key factors in closing this gap.

While much of the focus in on farmers themselves in creating a more sustainable livelihood, there is much that can be done from the perspective of the consumer as well. Awareness and education about chocolate should not be limited to the various producers along the supply chain. A broader, collective conscious effort to understand how the cocoa products come to be lead to more informed consumers that apply pressure to the overall industry to be more sustainable and resilient. While seemingly altruistic, this approach is quite practical as well. The end goal is not for a consumer to feel good about being charitable and righteous, but rather the goal should be about creating a more economically, ecologically, and socio-politically chain where the weakest links at this point are disenfranchised farmers and disconnected consumers. Corporations and organizations in between have various approaches at closing the gap for a variety of reasons, but working towards a complex solution from both ends of the supply chain will be critical to the success of a more sustainable market.

1. Schmitz, Harold, and Howard-Yana Shapiro. “The Race to Save Chocolate.” Scientific American. Accessed May 03, 2016. http://www.scientificamerican.com/article/the-race-to-save-chocolate/.

2. ibid.

3. ibid.

4. Moyer, Michael. “Death and Chocolate: Disease Threatens to Devastate Global Cocoa Supply.” Scientific American. Accessed May 03, 2016. http://www.scientificamerican.com/article/death-and-chocolate/.

5. ibid.

6. “Challenges.” World Cocoa Foundation. Accessed May 04, 2016. http://www.worldcocoafoundation.org/about-cocoa/challenges/.

7. “Cacao and Chocolate in Vietnam, a Brief History.” Marou, Faiseurs de Chocolat. Accessed May 03, 2016. http://marouchocolate.com/post/55951688118/history.

What’s Fair About Fair Trade?

The cocoa industry has been plagued by issues of forced labor since its inception, and while awareness surrounding these issues have begun to come to light, the seriousness and effectiveness of action is often undercut by marketing campaigns that make vague promises of fair trade and improved living conditions. The advertisement above, for example, produced by Fair Trade Certified, suggests that buying Fair Trade Certified labeled products contributes to the building of infrastructure, community, and better agricultural standards in certain products’s countries of origins. When consumers buy coffee, chocolate, or sugar with this label, there is the implication that guilt associated with these commodities can be assuaged. However, this implication holds little or no merit, and it is unclear how a daily cup of coffee, gift of chocolate, or spoonful of raw cane sugar is exactly contributing to the betterment of lives abroad. What percentage of the surcharge for these products is going directly to farmers? How are these funds allocated and distributed? What are the standards for fair trade and can these standards be quantified? Are they being enforced? Advertisements like this leave many questions unanswered in their vague claims. The real aim of this marketing strategy is arguably the commodification of poverty and selling the experience of helping those in need. The advertisement ends with a slogan stating, “Every purchase matters. Look for the label. Buy Fair Trade. Do more good.” The fair trade movement would benefit greatly from an approach that moves away from the cultivation of a savior complex through the purchase of goods and, instead, focus on transparent communication of how surcharges are calculated and used. The “feel good” approach engenders false consumer empowerment and perpetuates the mystification of how products are produced and where consumer money is being allocated.

Transparency has been a buzzword in consumer goods and marketing in recent years and can also be problematic at times, especially as companies navigate their markets and legality of labeling and disclosure. Kevin Goldberg, Nestlé Nutrition’s general counsel, in an interview, stated that the new challenge “will be to effectively demonstrate how committed we are to all of those concerns. The issues will remain the same, but the bars for all of them will definitely be raised even higher than they are today” [1]. Demonstration of commitment has thus far been awareness focused and vague in terms of resolution. Nestle’s Cocoa Plan, a major initiative aimed at improving the livelihood of cacao farmers, chronicles many of the underlying factors that contribute to child labor and provides a clearer picture of the company’s strategies to mitigate child labor practices through a series of statistics. While helpful in communicating the company’s larger goals, it is difficult to draw a connection between the consumer, the products they buy, and this transaction’s impact on affected communities.

Print
Image by author

While not connected to the cocoa industry, Everlane, a clothing company, deals with similar issues tied to apparel, and has reacted with “radical transparency.” Their company slogan in ”Know your factories. Know your costs. Always ask why.” This attitude is manifested in infographics about their products that break down the raw costs of production and reveal profit margins. The numbers are quite simple and do not speak to the myriad of factors that contribute to forced labor, but they provide a straightforward explanation of where consumer dollars go. Taza Chocolate’s Direct Trade initiative similarly pushes for transparency, but at the scale of the company’s operation as opposed to the scale of the consumer. Capitalizing on the potentials of empowerment for the consumer through transparency can be very effective if information is also disclosed at the scale of every purchase. Companies and certification processes that have gotten by with lax standards would be further and rightly scrutinized by a more informed customer base. As Goldberg states, “The new empowered consumer environment has certainly helped our already high standards evolve to become even more stringent” [2]. The re-imagined advertisement above breaks down the cost of a single, well sourced, chocolate bar in the fashion of Everlane’s marketing strategy. These numbers, while still abstract, begin to illustrate the inner workings of the cocoa industry in more neutral terms. Emotional campaigns are detached from these graphics, allowing consumers to consider what is fair in terms of their dollars and where they go and demystifying the relationship between goods bought and the labor that made it possible. By maintaining transparency in pricing, it may lead to stabilization in the volatility of the market for primary goods [3] as the siphoning of profit margins by middlemen are brought to light.

[1] Silver, Jeff. “Nestle Prioritizes Transparency in Advertising.” Modern Counsel. Accessed April 08, 2016. http://modern-counsel.com/2016/kevin-goldberg/.

[2] ibid.

[3] Sylla, Ndongo Samba, and David Clement Leye. The Fair Trade Scandal: Marketing Poverty to Benefit the Rich. 2014. 

 

 

 

Cacao and Continued Unethical Labor Practices

Cacao based products, as a commodity for Europe and North America, has historically been linked to the use of non free labor, and even today, exploitation of labor sources for profit continues to be standard practice. Many companies and organizations have committed themselves to a more ethical approach in the supply chain of their raw products, but slavery continues to exist as profit margins are prioritized over ethics. A practice solidified during the Middle Passage and is likely to continue unless there is a drastic overhaul in the harvest, production, or consumption of chocolate.

529027267_1280x768
Young children harvesting cacao in West Africa

A labor intensive crop, the cacao plant requires intense manual labor for harvest. The demand for labor to farm and harvest the labor intensive crop, cocoa, grew alongside the increase in demand for chocolate by European and North American consumers. Since its initial discovery by the Spaniards who exploited Native American labour until they died of diseases introduced from Europe, the cocoa trade has continued to increase yield and profit through non free labor. The Middle Passage and the slave trade, used by Spain, France, Portugal, England, Holland, and Denmark to profit handsomely from buying African slaves with goods, using them to work the fields of the New World to produce luxury goods to sell in Europe and North America [1]. The use of slave labor in the expansion of cocoa production, as well as other goods like sugar, rum, cotton, and tobacco, helped fuel the popularization of cocoa as it became more accessible to all, not just the elite, in the 19th century [2].

Despite bans of slave labor since the days of the Middle Passage, pockets of slavery continued to flourish while those freed were thrust into lives of poverty and disadvantage. Cadbury Chocolate, a successful Quaker chocolate maker who gained prominence in the 1860s in England, learned of the use of slave labor on cacao plantations in Sao Tome, and took nearly 10 years to take measurable action against the unethical sourcing of their raw materials [3]. Today, these issues continue to persist and much attention has been paid, recently, to West Africa, where child labor and trafficking in connection to cacao farming is commonly practiced to supply labor as cacao prices for farmers drops. The Ivory Coast and Ghana are two countries where this is most prevalent, and the Ivory Coast alone supplies nearly 40% of the world’s forastero cacao [4]. In the wake of an expose by BBC in 2000, United States congress attempted to introduce legislation to create a “no child labor” certification that was vehemently opposed by the chocolate industry [5]. A compromise was struck and major companies signed The Engel-Harkin Protocol, a pledge to investigate and eliminate slave practices that failed to produce any results [6]. CNN also produced a documentary in 2014 (see trailer below or watch full length documentary here) as part of their Freedom Project that that discussed the “Cocoa-nomics” behind the chocolate industry and its prevalence for nonfree labor [7]. In 2015, a group of consumers filed a suit against Nestle, Hershey’s, and Mars for failing to advertise the use of slavery in the production of their products, duping consumers into supporting unethical practices [8].

These events, while they point out failures in the system, also suggest methods in which the use of unfree labor can be eradicated long term. On the production side, better rates for raw products will provide better financial freedom to farmers to send their children to school and avoid the need to procure unfree labor. Rates have decreased as more middlemen take out portions of profit for extra processing and marketing campaigns. Better agricultural management techniques for increased yield could also decrease the profit gap as healthier, more robust trees will provide more security for farmers. On the consumer side, increased awareness and willingness to pay more for a more ethical product will decrease demand for cheap chocolates that are made possible by child labor and will also pressure producers to cater to a different market for chocolate. While there are many approaches, none have made significant headway as of yet, and it is difficult to tell if history will repeat itself and if pledges will be fulfilled or not. Many companies have shown their support in forms of either pledges or certification. Nestle has publicized (as seen below) their investments into research and development efforts aimed at more efficient farming practices to increase incomes for farmers as a long term approach to addressing this issue [9]. While these initiatives appear promising, they must be maintained long past the marketing efforts to assuage the consumer public and until viable solutions for unfree labor are cemented.  

 

Sources

1. Coe, Sophie D., and Michael D. Coe. The True History of Chocolate. 3rd ed. New York: Thames and Hudson, 2013.

2. ibid

3. Satre, Lowell J. Chocolate on Trial: Slavery, Politics, and the Ethics of Business. Athens, OH: Ohio University Press, 2005.

4. Coe, Sophie D., and Michael D. Coe. The True History of Chocolate. 3rd ed. New York: Thames and Hudson, 2013.

5. ibid

6. Haglage, Abby. The Daily Beast. September 30, 2015. Accessed March 11, 2016. http://www.thedailybeast.com/articles/2015/09/30/lawsuit-your-candy-bar-was-made-by-child-slaves.html.

7. “CNN Freedom Project: Cocoa-nomics – CNN Video.” CNN. March 2, 2014. Accessed March 11, 2016. http://www.cnn.com/videos/international/2014/03/02/cfp-cocoa-nomics-full.cnn.

8. Haglage, Abby. The Daily Beast. September 30, 2015. Accessed March 11, 2016. http://www.thedailybeast.com/articles/2015/09/30/lawsuit-your-candy-bar-was-made-by-child-slaves.html.

9. “CNN Freedom Project: Cocoa-nomics – CNN Video.” CNN. March 2, 2014. Accessed March 11, 2016. http://www.cnn.com/videos/international/2014/03/02/cfp-cocoa-nomics-full.cnn.

 

 

 

Vietnam: The Next Cacao Frontier

While Mesoamerican and African involvement dominates most of the natural history of cacao, cacao’s recent introduction to Asia is of particular interest as it appears to be the new frontier of cacao cultivation and the next chapter of its colonialization. The West has flirted with cacao production in Vietnam on and off for over a century, and it has seen a resurgence in the past decade as it has once again been targeted as a viable region for production expansion given shortages of supply for growing demand. In the late 19th century, the French attempted to establish cacao growing, much like it had in other regions in the world, but it proved to be unfruitful as coffee was far more profitable, and thus the efforts were abandoned. Few trees remained, but no significant inclusion to Vietnamese culture occurred. Cacao saw a brief resurgence in the 1980s after the war out of its dependency on the USSR. Cacao was planted to supply Soviet demand for chocolate, but by the time the trees produced pods, the Berlin Wall had fallen and demand disappeared prompting frustrated farmers to cut down most of the cacao trees [1].

12918334703_d732ce63a9_o
Vietnamese Cacao Farmer

In the third iteration of cacao cultivation initiatives introduced by Western entities, free seedlings and training were offered to local farmers in Vietnam in order to elevate the quality of living and economic standing of small farmers; Cacao was touted as means of transforming the well-being of poor farmers [2]. The organizations responsible for this reintroduction, USAID, USDA, World Cocoa Foundation, Mars Inc., and ACDI/VOCA, developed SUCCESS, or the Sustainable Cocoa Enterprise Solutions for Smallholders, and have increased the number of hectares of cocoa from 1,600 in 2004 to 6,500 in a span of 7 years [3]. It seems like a win-win relationship between chocolate producers/consumers and cacao farmers as that number has skyrocketed to over 20,000 hectares today. As a shade crop, the cacao trees do not interfere with the farmers’s main crops, and can provide upwards of $1,000 in supplemental income, on average, from about half a ton of cocoa [4]. Additionally, from a Western perspective, Vietnam is coveted due to its lack of political instability so omnipresent in other regions of the world with favorable growing conditions as well as a culture of focused and goal oriented farmers [5]. This seemingly mutual relationship, while optimistic, is intrinsically tied to foreign demand and still overshadowed by Vietnam’s main exports of rice, coffee, cashews, etc. It’s a dynamic that contributed to Vietnam’s abandonment of similar efforts in the past.

14556221920_022f38e732_o
Marou Chocolate Bars

One major difference in this third iteration of Vietnamese cacao cultivation is the popularization of its origin and the development of a Vietnamese specific terroir. On the heels of SUCCESS fueled expansion of cacao, 2 French expatriates behind the popular bean to bar chocolate producers, Marou, have built their chocolate company around bars, made in the French tradition, that exhibit the specific flavors of various regions in Vietnam that they source their beans from. Commercial success followed, as well as awareness of the specificity of cacao from Vietnam in a time when most people were not even aware of its cultivation in the area. Other larger chocolate producers have also followed suit with Vietnamese origin editions. While Marou has done much for the cacao community and its Vietnamese context through awareness and sustainable practices with local farmers, its origin story holds many parallels to that of cacao’s earliest colonial history. Picture 2 Europeans armed with a rumor of goods and vague directions of where to find it setting of on a journey into Vietnamese highlands. They photograph coffee trees thinking they have found cacao before stumbling upon a cacao plantation. After a friendly tour by its owners and a homemade bar with their beans, Marou was conceived [6]. Their product was further enhanced by a strong marketing effort that drew inspiration from Vietnamese graphics.

Despite Vietnam being a critical link in closing the supply/demand gap of cacao’s industry, who is truly profiting from its expansion? History appears to repeat itself as Western manufacturers profit from, not only the cultivation by foreign hands, but their cultural heritage as well, in a bid to further authenticate exotic goods. From an economic perspective, the Western monopolization of the distribution and post production of Vietnamese cacao is similar to that of Spain’s stranglehold on the New World, as all goods were to be imported from the mother country [7]. Cargill, a company based in Iowa, provides market access to Vietnamese farmers and imports 70% of all cacao grown in Vietnam [8]. While less explicit than its predecessors and armed with more a more mutualistic proposal, Vietnamese cacao is still vastly more profitable to the foreign market than domestically, and the socioeconomic inequities found in Latin America and Africa are likely to resurface as Vietnam grows to become a major player in the cacao industry.

Sources

1. “Cacao and Chocolate in Vietnam, a Brief History.” Marou, Faiseurs De Chocolat. Accessed February 18, 2016. http://marouchocolate.com/post/55951688118/history.

2. “Cocoa Farming Raises Incomes for Vietnamese.” USAID. Accessed February 19, 2016. https://www.usaid.gov/results-data/success-stories/cocoa-create-better-conditions-farming-families-0.

3. “SUCCESS Alliance.” SUCCESS Alliance. Accessed February 19, 2016. http://thesuccessalliance.org/.

4. “Slowly And Sweetly, Vietnam’s Chocolate Industry Grows.” NPR The Salt. Accessed February 18, 2016. http://www.npr.org/sections/thesalt/2014/04/23/306229547/slowly-and-sweetly-vietnams-chocolate-industry-grows.

5. Presilla, Maricel E. The New Taste of Chocolate Revised. Berkeley: Ten Speed Press, 2009.

6. Stokes, Connla. “The Great Chocolate Start Up: Marou – Faiseurs De Chocolat – The Director’s Cut.” The Comical Hat. Accessed February 18, 2016. The Great Chocolate Start Up: Marou – Faiseurs de Chocolat – The Director’s Cut.

7. Coe, Sophie D., and Michael D. Coe. The True History of Chocolate. 3rd ed. London: Thames & Hudson, 2013.

8. “Cargill Vietnam: Cocoa.” Cargill. Accessed February 19, 2016. http://www.cargill.com.vn/en/products-services/cocoa/index.jsp.