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Equal Exchange: An Ethical Source of Chocolate

Introduction

If you are one of the millions of people that consume chocolate in the United States every year, the chances are that you are buying from either Hershey’s, Mars, or Nestlé, as they have US market shares of 44.1%, 29.3%, and 4.9% respectively (Statista 2016). However, if you were told that every time you buy chocolate from one of these companies you are contributing to child labor, low wages for farmers, and terrible working conditions, would you believe that?

Most of what one sees when buying from these companies is some charming packaging like chocolate kisses and chocolate hearts. That is because these companies spend significant amount of money on advertising to portray that image to the public. However, the reality is that behind the scenes, these chocolate companies are the complete opposite. They are completely driven by profits, and as a result contribute significantly to a child labor problem in Africa and even though they are aware of it, they do very little to solve it.

The problem

People became aware about the child labor issue in West African cocoa farms in the early 2000s when journalists began focusing the world’s attention to “children who had been trafficked to Ivory Coast to farm cocoa, often from other former French colonies such as Mali and Burkina Faso, and held as slave laborers” (O’Keefe 2016). In a documentary broadcasted by BBC, kids in the Ivory Coast said that they were been forced to work for long hours and frequently beaten for no pay. Subsequently, cocoa farmers in Africa earn less than $2 per day, therefore many farms frequently rely on child labor to maintain competitive prices. Since this young kids are uneducated and enfolded by extreme poverty, they do what they can to support their families and get misled by traffickers saying that cocoa farming pays well. Therefore, instead of getting an education these young people work under very unsafe environments. They have to use machetes to pry the large pods and they are exposed to dangerous chemicals used on cocoa farms in Africa. Since 70%of cocoa production comes from West Africa with 60% coming from Ivory Coast and Ghana, most companies are dependent to that area to fulfill the demands of the public.

Since the issue became public in the early 2000s, the large chocolate companies have spent significant amounts of money to show consumers that they are trying to do something about it, but the truth is that it is not their priority as little progress has been made. The Payson Center for International Development at Tulane University surveyed a comprehensive survey of child labor in the 2013–14 growing season and found that “2.1 million children had been engaged in inappropriate forms of child labor in Ivory Coast and Ghana combined—a 21% increase over the 1.75 million identified in its survey five years earlier. Of those, 96% were found to be involved in ‘hazardous activity.’ The number of children reported to be performing dangerous tasks fell by 6% in Ghana but jumped by 46% in Ivory Coast” (O’Keefe 2016).

 Supply Chain

If those are really the conditions under which cocoa farmers and children work in West Africa, how do these large companies get away with it? The answer is the supply chain of chocolate.

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The above image depicts a simplified version of the supply chain for cacao. “Developing country farmers sell their cocoa beans to an exporter. In many producing countries, some or all of the largest exporters are the multinational processing companies themselves or local companies controlled by them. Once shipped to Europe or North America, the beans will be transformed to cocoa and cocoa powder. The cocoa butter then goes to the chocolate manufacturing companies. In the end of the chain we find supermarkets and smaller specialist outlets who are selling the chocolate” (Gilbert 2006). Since the American companies are so far away from the farmers and have very little contact with them, they are able to blame the child labor and low wages issues to the middle-men.

Solution

To help solve these problems, it is very important that next time when you buy chocolate from a store you are a socially aware buyer. The guide that you will learn to become a socially aware buyer is helpful not only for chocolate, but almost for any product you decide to purchase. All you have to do to become a socially aware buyer is to follow this technique that I learned from Harvard Professor, Carla Martin, which is to closely look at the following information from the company you are buying from:

-Look at the company’s history and mission.

-Look at the packaging (marketing, advertising, etc).

-Representation (of farmers, countries, etc)

-Certification(s)

-Ingredients

This blog post will guide you through this process and will analyze a company that is considered to be part of the solution of the child labor and low wage problems in Western Africa: Equal Exchange. Since we consider this company to be doing everything in their power to achieve fair trade, we strongly encourage you to buy products from them or companies that are in the same path as Equal Exchange.

History and Mission:

The story of Equal Exchange began when the founders, Jonathan Rosenthal, Michael Rozyne, and Rink Dickinson, had a vision of “fairness to farmers. A closer connection between people and the farmers we all rely on.” After they founded the company in 1986, they had a few goals in mind: 1) A social change organization that would help farmers and their families gain more control over their economic futures. 2) A group that would educate consumers about trade issues affecting farmers. 3) A provider of high-quality foods that would nourish the body and the soul. 4) A company that would be controlled by the people who did the actual work. 5) A community of dedicated individuals who believed that honesty, respect, and mutual benefit are integral to any worthwhile endeavor (Equal Exchange).

Equal Exchange’s mission is “to build long-term trade partnerships that are economically just and environmentally sound, to foster mutually beneficial relationships between farmers and consumers and to demonstrate, through our success, the contribution of worker co-operatives and Fair Trade to a more equitable, democratic and sustainable world.”

For over 25 years the company has done an incredible job and understands that they have a long way to go to help achieve their goal of fair trade. They are aware that “the acceptance of large plantations and corporations such as Nestlé into the Fair Trade labeling system calls into question the very underpinnings of the certification system” (Equal Exchange). However, they are willing to challenge them and do their part so that fair trade is truly achieved.

Packaging, Advertising, and Representation (farmers)

The video made by Equal Exchange summarizes the issues that the chocolate industry is facing, as only 5% of the world’s chocolate is fairly traded. It is clear, that they want to educate people and promote a more fairly traded cacao. Below is also the packaging from one of their chocolate products, which not only helps farmers get their fair share, but also attempts to educate people that see their packaging.

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Even though in this chocolate bar they are specifying that the cacao they use is coming from Latin America, the company has experienced significant growth in the last years and has begun to expand to Africa as well. It is clear after watching their packaging that they produce an organic and fairly traded chocolate bar. They educate the consumer that there is a problem and provide the picture of a farmer and what they are trying to achieve: “Small farmers. Big change. By choosing Equal Exchange fairly traded products, you support a food system that builds stronger farming communities, creates a more equitable trade model, and preserves our planet through sustainable farming methods.” There’s many ways Equal Exchange could’ve used that space, but their goal is fair trade and not only profit, which is why they use this unique packaging strategy.

Certifications:

Another factor that it is important to look at when making a decision to what product to buy is the certifications. There are many different certifications, fair trade certifications, organic certifications, direct trade certification, among many others. However, not only because the product has a sticker with some sort of certifications means that the product is not contributing to problems like child labor or unfair trading. It is important to look a little bit into the organization to find the truth. There is no perfect world, but some are definitely better than others.

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There are three main areas of sustainability: economic, environmental, and social. None of the labels achieve all three. For example, The Rainforest Alliance label “is about quality of life, protecting wildlife, the environment, workers, and the larger communities…’Organic,’ refers to strict adherence to environmental and processing requirements…’Fair Trade’ is a common chocolate label, guaranteeing that a fair price was paid to local farmers for the cacao beans” (Shanker 2013). However, getting certified costs the farmers thousands of dollars that could’ve been spent otherwise like for employees or land, which just adds “more links to the chain between the bean and the customer (Shanker 2013).

It is very important to look deeper to a certification company to get an idea of what exactly is it they are doing. One example of a certification organization is Fair Trade USA (Fair Trade Certified on the above picture), a non-profit organization that audits and certifies transactions between U.S. companies and their international suppliers to promote sustainable livelihoods for farmers and workers and at the same protect the environment. They are a recognized company that has had a positive impact. However, according to Equal Exchange, “Fair Trade USA has slowly, but steadily chipped away at our principles and values, only recently taking the final steps in building their strategy…proceeded to leave the International Fair Trade System, lower standards, eliminate farmers from their governance models, and invite large-scale plantations into coffee and all other commodities.” All of this doesn’t mean Fair Trade USA is a bad organization, however, it might be less worthy than what it might appear in the first place.

For that reason, Equal Exchange created their own model: Authentic Fair Trade. They “joined a growing movement of small farmers, alternative traders, religious organizations, and nonprofits throughout the world with like-minded principles and objectives.” The way farmers benefit from the Equal Exchange model is by cutting out the middlemen and paying the farmer more. They help “provide health care, education and technical trainings for farmers, workers, and artisans around the world” (Equal Exchange).

Ingredients:

The process for making chocolate is very complex because a small variation can change the end product significantly. Every step of the process is extremely important, from harvesting the cacao pods, extraction of seeds and pulp, fermentation, drying, sorting and bagging of the beans, to roasting, winnowing, grinding, pressing, and conching all play a fundamental part in the taste, texture, and aroma of the end product. However, the chocolate people consume includes more than just cocoa liquor, cocoa powder, and cocoa butter. The quality of the non-chocolate ingredients, including milk, sugar, vanilla and stabilizers, also affects the quality of the finished chocolate product. Pure flavorings and natural ingredients, rather than artificial flavoring, produce the best-quality chocolate candy. Chemical preservatives also affect the flavor and quality of the finished product. Top-notch chocolate products use the simplest, purest ingredients so the true flavor shines through” (Warrell 2017).

Equal Exchange plays close attention to the production of their chocolate in every step of the way, guaranteeing the best quality. They also have a special Chocolate Tasting Panel, which meets weekly for “intense product evaluation.”

Conclusion

There is a large problem in West Africa in terms of child labor and cocoa farmers getting really low wages. Most of the big companies like Hershey’s Mars, and Nestlé contribute to these issues and are doing very little to solve them. There has been very little improvement since people start becoming aware of the issues in the early 2000s. For that reason, it is important that chocolate buyers become socially-aware and try to do everything they can to do their part. The main way to accomplish this is to buy from companies that are trying to solve the issue, like Equal Exchange.  By doing that, you will join a movement of people that are trying to make the food-system “better for farmers, consumers, and the earth” (Equal Exchange).

Works Cited

“Building a Vibrant Community.” Equal Exchange. N.p., n.d. Web. 05 May 2017. <http://equalexchange.coop/&gt;.

Equal Exchange. “Why Fair Trade Chocolate Matters.” YouTube. YouTube, 22 Sept. 2015. Web. 05 May 2017. <https://www.youtube.com/watch?v=lnpsFRcsnE0&gt;.

Gilbert, C.L., (2006), Value chain analyses and market power in commodity processing with application to the cocoa and coffee sectors, 14 Mar. 2008. Web.

HERSHEY’S Spreads Ad With Tara Sharma. Perf. Tara Sharma. Hershey’s, 08 Dec. 2016. Web. <HERSHEY’S Spreads Ad With Tara Sharma>.

Martin, Carla (2017). “Lecture 10: Alternative trade and virtuous localization/globalization”

O’Keefe, Brian (2016). “Inside Big Chocolate’s Child Labor Problem.” Fortune. N.p., 01 Mar. 2016. Web.

Shanker, Deena (2013). “A Guide to Ethical Chocolate.” Grist. N.p., 19 Feb. 2013. Web.

The Cocoa Supply Chain. 2006. Value Chain Analyses and Market Power in Commodity Processing with Application to the Cocoa and Coffee Sectors, n.p.

Warrell (2017). “Find Out How To Tell The Difference Between Good and Bad Chocolate!” The Warrell Corporation. N.p., 25 Jan. 2017. Web.

(2016) “U.S. Market Share of Chocolate Companies, 2016 | Statistic.”Statista. N.p., n.d. Web.

 

 

 

 

An Experiment to Test Chocolate Preference

To test chocolate preferences, I conducted an experiment on my friends by having them taste a wide variety of chocolates. They didn’t know that they were part of an experiment. They were only told that I was holding a chocolate tasting as part of a course I was taking and I wanted them to rank their preference of each of 7 chocolates, or cacao nibs, from 1 to 7 (1 being the best). Three of my friends were not raised in America which provided some interesting information on the differences in chocolate preference between Americans and people from other parts of the world. Through my experiment I discovered how texture, Fair Trade or organic labels, gourmet or artisan labels, and the distinct taste of Hershey’s chocolate affected preferences.

In an attempt to set up a controlled experience with as little changing variables as possible, I decided to make all the samples I gave my friends look exactly the same. I melted down the 6 types of chocolate bars I bought and molded them using the brown mold pictured below. I did not want my friend’s preferences to be affected by product names or the shape/appearance of the chocolate.

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I presented the chocolates in the same way to everyone, as pictured below. The only noticeable difference between the chocolates was that the chocolate on the left side of the plate was obviously milk chocolate. I kept my samples in plastic bags with the original packaging, as seen in the picture, to ensure that I did not mix up the samples that now looked exactly the same. My friends did not see me set up the plates so they had no way of knowing if I was telling the truth about the chocolates they were eating during the tasting.

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I randomly assigned my 8 friends to two separate groups, Group A and Group B. Sometimes I switched two chocolates on the tasting plate for a particular group. This meant that as I was leading the tasting, I was telling one group that they were eating one type of chocolate when they were really eating another. I did this so I could see if what I said to them about the chocolates had any affect on how much they liked them. I gave each friend a tasting form and a tastes “cheat sheet,” pictured below.

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My cheat sheet was inspired by chocolate tastings done in class and Stuckey’s explanation of the five tastes: “… the only five tastes we Homo sapiens can detect using our tongue alone [are] sweet, sour, bitter, salt, and umami… These tongue sensations are known as the five Basic Tastes” (5). I gave my friends minimal information about the chocolate on the tasting sheets. I left a spot for them to rank the chocolates and another spot for them to write their general thoughts on the chocolate’s taste. As I led the tasting, I explained what any possibly unfamiliar words meant, like Fair Trade, organic, non-GMO, single origin, gourmet. Per recommendations from class, I had my friends taste things in order of highest cacao content to lowest. I decided to include cacao nibs in my tasting as an interesting difference from all the chocolate. I figured that most of my friends had never had cacao nibs so I was eager to see their reactions. The Cacao nibs are pictured below.

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From my friends’ reactions during the debriefing at the end of the experiment, they had no idea that I had lied about which chocolates I gave them. This leads me to believe that my data should be significant. Before I present my data, I will discuss each of the chocolates I used in my tasting, excluding the cacao nibs which I have already mentioned. I used two 80% chocolates which I switched for the groups. One of the chocolates was Taza’s 80% cacao and the other was Equal Exchange’s single origin chocolate from Panama with 80% cacao. The second line on my chocolate tasting sheet describes Equal Exchange’s chocolate while the third line describes Taza’s. I did not switch the fourth chocolate on my tasting sheet for the groups. This chocolate was Equal Exchange’s single origin chocolate from Peru with 71% cacao. Next I had Valrhona’s gourmet, single origin chocolate from Madagascar with 64% cacao (line 5) and Hershey’s dark chocolate (line 6). From my research, Hershey’s dark chocolate has approximately the same cacao percentage as the Valrhona chocolate I chose. Lastly, I gave the groups different milk chocolates with approximately the same percentage cacao. One group received Hershey’s milk chocolate while the other received a milk chocolate meant for chocolate fountains (pictured in the first image). Below are the rankings that my friends gave to each of these chocolates.

Cacao nibs: [2, 3, 4, 4, 5, 5, 6, 7]

Taza: [1, 2, 5, 6, 7, 7, 7, 7]

Equal Exchange 80%: [1, 1, 2, 3, 4, 4, 4, 6]

Equal Exchange 71%: [2, 2, 2, 3, 3, 3, 4, 4]

Hershey’s Dark: [1, 1, 1, 1, 3, 5, 5, 6]

Valrhona: [1, 2, 2, 3, 3, 5, 5, 6]

Hershey’s milk: [6, 6, 6, 7]

Milk fountain chocolate: [2, 4, 5, 7]

From my data, the fair trade, organic and single origin labels did not seem to have any significant impact on chocolate preference. There were varying preferences for the four chocolates that had these labels (Taza, Equal Exchange, and Valrhona). This is interesting given what I read about “Perceptions of the Fairtrade label”:  “thanks in part to the numerous sensitisation campaigns, the Fairtrade label has become increasingly well known. Likewise, the purchase of FT products continues to grow at enviable rates… 50 per cent of people are familiar with the Fairtrade label. Beyond this, various opinion polls also showed that consumers are increasingly aware of the potential consequences of their consumption rates” (Sylla, “The marketing success of FT: some figures). Sylla suggests that increased education about Fair Trade has caused an “enviable” increase in the sale of fair trade products. One can deduce that an increased sale means an increased preference. The ranging ratings of my friends for Fair Trade chocolates (Equal Exchange and Taza), suggest that there is not really a correlation between a chocolate having a Fair Trade label and a higher preference for that chocolate.

Another interesting result in my data was the general feelings about Taza chocolate. Taza chocolate is different from most chocolate because it is stone ground, with the end result of a higher particle size in the chocolate. Part of the reason that chocolate became more popular was the introduction of machines that could grind chocolate into smaller particles, which might explain why my friends did not generally like it. Only 2 of my 8 friends liked Taza, while 4 out of my 8 friends liked it the least of all the samples (including the cacao nibs). There was actually more general dislike for Taza chocolate than the “bitter” cacao nibs. 7 out of my 8 friends described it as “grainy,” “gritty,” or “powdery.” In my mind, these are not positive adjectives for chocolate. I believe it is safe to say that people tend not to like higher particle size chocolates.

One fascinating result from my experiment was the reactions to Hershey’s chocolate. D’Antonia describes how Hershey’s chocolate differs from other chocolates and played a large role in shaping the chocolate preferences of Americans: “Hershey’s milk chocolate… carries a single, faintly sour note. This slight difference is caused by the fermentation of milk fat, an unexpected side effect… Anyone who knew Swiss milk chocolate… may have found Hershey’s candy unpleasant… Hershey’s milk chocolate… would also come to define the taste of chocolate for Americans” (108). The most striking result from my experiment was that 4 out of the 5 Americans chose Hershey’s dark chocolate as their favorite chocolate from the samples. This makes sense given what D’Antonio says, but it is particularly interesting given that milk is an ingredient in Hershey’s dark chocolate, unlike the other dark chocolate samples I tested. The non-Americans gave Hershey’s dark a lower rating (3, 5, and 5).

I included one expensive, gourmet chocolate in my tasting to see if there would be a general preference towards the chocolate. Williams and Beer explain that many consumers cannot recognize the improvements with gourmet or artisan chocolate, asking the question: “So, can consumers learn to slow down, taste, explore, and value the costly complexity of fine flavor?” (146). From my experiment, the answer to this question appears to be no. The very varied rankings of the gourmet chocolate indicate that my friends did not have any particular preference toward it.

Through my experiment I discovered that Americans and non-Americans definitely have different preferences for chocolate. Americans tend to prefer Hershey’s chocolate over other chocolates. Labels like Fair Trade and organic do not seem to have a significant impact on preferences but this might be due to lack of education. The particle size of chocolate also appears to play a big role in preference. Lastly, it is safe to say that people have not yet learned to appreciate the taste of more expensive artisan and gourmet chocolates.

 

Sources:

D’Antonio, Michael D. 2006. Hershey: Milton S. Hershey’s Extraordinary Life of Wealth, Empire, and Utopian Dreams. pp. 106-126.

Stuckey, Barb. 2012. Taste: What You’re Missing. pp. 1-30, 132-156.

Sylla, Ndongo. 2014. The Fair Trade Scandal.

Williams, Pam and Jim Beer. 2012. Raising the Bar: The Future of Fine Chocolate. pp. 141-209.

 

Multimedia sources:

All images were taken by me.

Fair Trade Pioneer and Protector: Equal Exchange Chocolates

Equal Exchange is one of the leading distributors of fairly traded and organic products, particularly coffee, cocoa products and tea. The company has been involved in fair trade from its conception in 1986 and has fought to ensure fair treatment, fair prices, safe working conditions and direct trade relationships for small-scale farmers and farming co-operatives as well as providing education to its consumers on available products. In the last ten years, Equal Exchange has found itself in opposition to one of the most well-known names of fair trade (mostly because it has the words in its name)- Fair Trade USA. Equal Exchange has retaliated against Fair Trade USA’s CEO Paul Rice’s campaign, “Fair Trade for All,” which plans to expand the certification of fair trade to large plantation owners. Equal Exchange, through its countless protest resources, emphasizes that this inclusion of big business and plantations will only foster negative competition for the farmers and farming co-ops that fair trade organizations try so hard to protect.

The Backstory

In 1986, Jonathan Rosenthal, Michael Rozyne and Rink Dickinson co-founded Equal Exchange as a challenge to the existing Fair Trade business models and as an attempt at creating a “closer connection” between the consumers and the farmers (“History of Equal Exchange”). They were previously involved in a food co-op in New England and decided to bring their knowledge of the relationship between producers and consumers into a realm that would benefit international, small-scale producers.  Once a week, for three years, the three met and discussed the best strategies to ensure more control for farmers, to create higher quality standards for producers, and foster a community and a company “that would be controlled by the people who did the actual work,” (“History of Equal Exchange”).

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The co-founders of Equal Exchange

Originally, the company sold Nicaraguan coffee, called “Café Nica,” which they imported through a loophole in the Reagan administration’s embargo on products from Nicaragua as a show of opposition towards the Sandinista government. This embargo was placed on Nicaraguan products in the late 1980s to further cut off any and all financial assistance to the Nicaraguan government as punishment for the Sandistas allegedly providing material support to the Salvadorian guerrillas (Leogrande). The embargo did not inhibit the founders from importing Nicaraguan coffee but during these years the three located and began trade relationships with other farming co-ops in South America and Africa. It was not until later years that the company would begin to sell fairly sourced tea and cacao products in addition to coffee.

The Business Model

Equal Exchange is a fully democratic worker co-operative that emphasizes equality among workers. The company depends on four main principles for its employees: “the right to vote (one vote per employee, not per share); the right to serve as leader (i.e. board director); the right to information; and the right to speak your mind,” (“Worker-Owner”). Each worker involved in the employee has an equal stake in the company so there is no hierarchy of salary or superiority among positions. The company is involved with over forty co-operatives in North America (mainly Mexico), Southern America (mainly Peru, Ecuador and Paraguay), Central America, Africa and Asia.

This video is taken from the Equal Exchange website narrating the worker-owned business model (if the video resets to the beginning of the Equal Exchange playlist, it should be video 16: Co-ops: Can We Do it Ourselves?):

The Introduction of Cocoa

In 2001, Equal Exchange surveyed their consumers and figured out that cocoa was a highly desired product. In 2002, they added hot cocoa mix to their product list, quickly followed by baking cocoa powder in 2003 and three varieties of chocolate bars in 2004. Their 2002 hot cocoa mix was the first U.S. cocoa product to display the Fair Trade Certified seal and to use Fair Trade Certified sugar (“History of Equal Exchange,”).

“…We put together a hot cocoa mix that met our standards of quality and social responsibility — a partnership between cocoa, sugar, and dairy cooperatives. Our hot cocoa mix has helped us reach out to a different group of farmers and has provided options for people who want to be certain that their cocoa is not being harvested by slave or child labor. It has allowed children in the U.S. to participate in promoting Fair Trade along with their parents,” (“History of Equal Exchange,”).

Cocoa Production and Products Today 

After the initial introduction of Equal Exchange’s three chocolate bars in 2004 they have expanded their products to twelve varieties of chocolate bars (Extreme Dark, Very Dark, Panama Extra Dark, Milk, Dark Chocolate Almond, Dark Chocolate Caramel Crunch with Sea Salt, Milk Chocolate Caramel Crunch with Sea Salt, Dark Chocolate Orange and Dark Chocolate Lemon Ginger with Black Pepper), milk and dark “chocolate minis,” milk and dark chocolate chips, hot cocoa mix, dark hot chocolate mix, spicy hot cocoa mix and one bulk sized option of cocoa powder (“Chocolate Bars,” “Chocolate Chips,” “Chocolate Minis,” “Cocoa,”). Each of their products is certified organic and Kosher.

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“This bar is made with chocolate liquor from Fortaleza del Valle co-operative in Ecuador and cocoa butter from co-ops in the Dominican Republic. The sugar and vanilla are also fairly traded and organic. The sugar comes from co-operatives in Paraguay and the vanilla from a co-operative in Madagascar,” (“Organic Ecuador Dark Chocolate (65% Cacao)”).

 

 

The chocolate bars are made with cacao sourced from “small farmers in Central and South America,” and are accompanied with a story explaining the origin of the cacao, sugar, and any other ingredients in each bar (“Chocolate Bars,”). The website states that “All of our Fair Trade and organic chocolates and cocoas are made with pure ingredients from small-scale farmers in Peru, Panama, Ecuador and the Dominican Republic,” (“Chocolate and Cocoa,”).

 

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“This bar is made with chocolate liquor from the COCABO co-operative in Panama and cocoa butter from CONACADO in the Dominican Republic. The sugar and vanilla are also fairly traded and organic. The sugar comes from co-operatives in Paraguay and the vanilla from a co-operative in Madagascar,” (“Organic Panama Extra Dark Chocolate (80% Cacao)”).

The “Fair Trade” Debacle 

When Equal Exchange began it had a goal to challenge the existing conditions of the larger organizations who dealt with producer-consumer relations. The co-founders of Equal Exchange could recognize the issues with large, corporate structures dealing with fair trade and wanted to refine the process to help more small farming operations in better ways.

Fair Trade Certification is socially understood to be beneficial for the small farmers and farming co-operatives and an effective way for consumers to directly benefit the producers of their goods. Fair Trade USA  promises to encourage the following ideas in its trade relationships with producers:

  • Direct trade between producers and manufacturers
  • Fair prices for goods
  • Safe working conditions
  • No exploitation of labor
  • No child labor
  • Gender equity
  • Democratic and transparent principles
  • Reasonable work hours
  • Community development to support education, healthcare, etc
  • Environmental sustainability (Martin)

However, these goals are not completely satisfied by the organization. There are many issues with the Fair Trade system, such as not enough money directly returning to farmers, a lack of standardized quality control,  and the high cost of certification. Unlike Equal Exchange, it is not a worker-owned, fully democratic organization so workers do not have the autonomy and voice that they would if they were involved in smaller organizations. The most problematic of the shortcomings of the system- in the eyes of Equal Exchange- is the fact that Big Food has slowly become more involved in the Fair Trade system which leads to a higher involvement of large plantations rather than small farmers.

In 2011, Paul Rice, CEO of Fair Trade USA stated that he wanted to expand the Fair Trade Certification system by allowing larger plantations and suppliers of cacao, sugar, cotton and coffee to take part in the system (“World Affairs Council of Northern California”). In his explanation of his “Fair Trade for All,” campaign, Rice stated that the definition of Fair Trade should be expanded and allow for the purchase of goods from collections of famers or larger plantations, as long as they meet the proper certification requirements; however, this inclusion of large plantations will foster new competition in the Fair Trade system that may ultimately hurt small farmers. Farmers who are a part of the fair trade system became involved due to excessive competition from major producers and the resultant financial inequity; thus, Rice’s plan to broaden the scope of Fair Trade will recreate this type of harmful competition between producers. Rice’s defense for this campaign centers on the idea that Fair Trade should be inclusive and should work to involve as many producers as possible.

“I Stand With Small Farmers”

Almost immediately, Equal Exchange responded to Fair Trade USA’s plan with harsh criticism. Equal Exchange began a response campaign, named “I Stand with Small Farmers,” through which they ask consumers and manufacturers to stand in solidarity against the expansion of Fair Trade ceswsfemailsignature_0-1rtification to include plantations. The founders have hyperlinked statements and resources on their webpage that argue against the claims of Rice and Fair Trade USA, including lists of ally partners and media sources covering the debate.

The following quote is taken from their public petition against the Fair Trade for All plan:

“Therefore we vigorously oppose Fair Trade USA (previously TransFair USA)’s Fair Trade for All initiative, which seeks to allow coffee, cacao and other commodities from plantations into the Fair Trade system. This strategy means that small farmers will now be forced to compete with large plantations for market access… We oppose the lower standards Fair Trade USA proposes and the lack of farmer and producer governance on Fair Trade USA’s board. We believe that their Fair Trade For All initiative threatens small farmer co-operatives’ existence and Fair Trade itself.”

In 2012, Equal Exchange published a report on their fight with Fair Trade USA. The background summary explains that in the 1990s, Equal Exchange had collaborated with other organizations to create the certifying agent of TransFair USA which was supposed to create more consumer confidence in the products they were buying. Eventually, TransFair, which changed its name to Fair Trade USA in 2010, lowered their certification standards, began to certify major food businesses such as Chiquita and Dole and broke off from the FairTrade Labelling Organization (“Background Summary”).

Overall, Equal Exchange emphasizes its distrust of the organization and its issue with the idea of allowing large plantations to compete with already struggling small farmers.

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Their self-published document, “Campaign FAQs” includes the following objection to Rice’s plan:

“Rather from our 26 years of Fair Trade experience we think their new methods represent a loose and misleading use of the term [Fair Trade] and a much diluted approach to product certification. We think their new criteria constitute little change from the status quo and, in fact, will undermine the substantial economic and social gains that the global Fair Trade movement has achieved to date,” (“Authentic Fair Trade Campaign FAQ’s”).

In his 2011 speech, co-founder of Equal Exchange Rink Dickinson states that this new plan is a threat to the stability and the success of fair trade development. He states:

“The gravest threat is the ongoing lowering of fair trade standards to the point where real fair trade groups cannot compete in the market because fair trade in name is cheap and well connected with the market and access is actually worse than it was before this movement started in earnest in the eighties… This threat plays out with few farmers coops beyond coffee and fair trade coffee coops getting weaker and being replaced by plantations, unaffiliated small farmers, and fake co-ops” (Dickinson).

Conclusion and The Effect of the Split

Equal Exchange has defended fair trade business strategies since its conception in 1986. The company goes above complying with fair trade standards but works to defend the name of “Fair Trade,” when it is put in jeopardy. It has expanded its own business ventures while reaching out to more farmers and more farming co-ops, ultimately trying to protect small producers from big business. The two most probable outcomes of this split between Fair Trade USA and Equal Exchange is increased competition among fair trade certified producers, which will ultimately hurt the smaller scale farming co-ops and benefit the large plantations, and a lack of unity among fair trade products. The already small percentage of fair trade products on the market will be splintered over brand-name recognition and popularity of big business.

 

Works Cited:

“Authentic Fair Trade Campaign FAQ’s.” Equal Exchange. 24 February 2012. Web. 03 May 2016.

“Background Summary.” Equal Exchange. January 2012. Web. 03 May 2016.

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