Jeff -You make some very good points about the role of a co-op like TCGA and how it can be pivotal to the growth and development of a community. However, the TCGA's role as a market maker is unusual, if not unique, because the TCGA has a guaranteed buyer. This is not the case for all FT co-ops. There is a downside to the guarantee, however, as the contract with G&B contains a multi-year rolling average provision to reduce volatility. It doesn't benefit the farmers because the FT contract already contains a minimum price provision. The beneficiary is the buyer who was insulated from the recent price surge.The larger point I am trying to make is that the reality of Fair Trade - on the ground to farmers and their families - is a far different from that portrayed by FLO. Many people still believe that when they buy Fair Trade that money goes directly to farmers.As I have maintained all along, FT is a part of a solution, not the solution, and that alternatives need to be considered. A Direct Trade model (like the one we've been mooting over at 5percent4farmers.ning.com) makes a lot more sense because of the inherent transparency.


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@DiscoverChoc

Clay,I'm very familiar with the situation with the specific co-op and at least generally familiar with how Fair Trade operates. If you rely on your numbers and figure out the financial impact of each farmer on a percentage basis, you would see that each farmer on average earns an extra 5% from being Fair Trade certified. The fact that the nominal amount is a pittance is another story. Not sure you could really consider that 900 farmers in the coop are actively producing. If so, the average farmer produces less than 100 pounds of beans a year. My guess is that only a third are active so the financial impact is threefold.As you acknowledged, the Toledo Cacao Grower's Association (TCGA) is a market maker. Without them, farmers would have no one to sell to. Who would spend the time aggregating the crops of hundreds of farmers and arranging for shipment to an international buyer if not the TCGA? These farmers are Fair Trade certified because it is part of the marketing of Green & Black's Chocolate (TCGA's primary buyer) and therefore a requirement of the product.If you think about it from this perspective, it's almost like a union job. Sure, some unions may waste their member's money, but the member has a job that otherwise wouldn't be available. In this case the farmer is better off selling a Fair Trade product than not selling at all.I do agree that the amounts charged by the Fair Trade Labeling Organizations are exorbitant; a direct trade model makes more sense. Perhaps if Green & Black's/Kraft and the TCGA gave up on Fair Trade labeling, each entity could pass that much more on to the farmers.Jeff

Brian:Your experiences are valuable and valued and I am glad you shared them. I think each of us has something that we're "expert" at - I just happen to very open to sharing my experiences and what I've synthesized from them.You are so right - the system that seems to make so much sense to consumers in "developed" nations doesn't make a whole lot of sense to farmers in "undeveloped" areas of the world when they learn of the benefits for the work required to earn them.Consumers (especially here in the US) have to learn that inexpensive food is not a birthright, and shareholders in companies need to reward corporate social responsibility (CSR) programs that deliver tangible value and aren't just greenwashing.


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You nailed this one on it's head. Thanks Clay.Cotton Tree Chocolate also buys beans from TCGA and has no problem with paying for the Fair Trade premium for the beans. Because Cotton Tree Chocolate is such a small company, the costs to get Fair Trade certification on the packaging were prohibitive. Cotton Tree Chocolate and Sustainable Harvest International work together towards making a more sustainable living for these farmers. These beans are not exported to be processed elsewhere. The ingredients for Cotton Tree Chocolate come from Belize. Locals are hired to make chocolate in the very same town as TCGA. Cotton Tree Chocolate is produced and sold only in Belize and works to create a better living for the people of Belize.The Fair Trade labeling requirements favor larger chocolate making companies with deeper pockets without looking at how much is actually being done to help the local community and it's farmers.

Hidden in plain sight in the 2008 TransFair USA annual report is an indication of just how different the perception of "FairTrade" is from reality.On page 19, the following numbers are presented in huge type:160,000 farmers impacted$200,000 granted to producer organizationsNot sure whether that's outright grants or premiums, but US$1.25 per farmer doesn't sound like a whole lot, does it?The 2008 Audited Financials (click to download 2008_TFUSA_Audited_Finan... make for some interesting reading - you get a fair sense of where money comes in and where it goes. For example, rent on the Oakland HQ in 2008 was over $500,000. Having visited the TCGA offices in Punta Gorda I can assure you that their rent is a lot less.


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Read my new post on this topic: Unfair Trade: Is FairTrade Scalable? .For my alternative approach to FairTrade, visit 5percent4farmers .


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@DiscoverChoc

This is good Clay. I've been speaking about this very subject at lectures for several years now and people are generally shocked to learn the details. This issue is quite complicated. You've gone into some detail here with figures that I appreciate.I often had customers in my shop who asked whether I carried fair-trade chocolate (and/or organic) and I spoke to them about this subject. Most people would accept my explanation and buy chocolate but some people would not buy unless it had the fair-trade label.I've never gotten a straight answer from reps from the fair-trade or other companies involved with this issue (rainforest alliance is difficult at best...).I agree with David that you might consider contacting Huffington on this.There are plenty of great and wonderful chocolate makers (bean to bar) that deal directly with growers and pay way above not only market but fair-trade too. Some are contactable on this site.Thanks and I look forward to the follow through...-Mark

As once a member of Fair Trade for coffee I found that it does not make a difference in quality of the product and in fact the farmers only receive a small and I mean very small percent. Ask the Fair Trade Org to show you their financial output and you will be banished from their membership. Not really but you will never receive what you ask for! I do believe in assisting these farmers in making more profit but not by using several middleman companies that take most off the top. I actually question what true organic really is. If by the time you receive your product is it still considered organic? Fumes from the cargo area are absorbed by a lot of products. Organic label does not eliminate the entire use of fertilizers but will allow a low % of various types. This is what I have read under guidelines for declaring organic food. Maybe cacao is different, to new in the biz to know really. I do know the farmers deserve better and would be better off dealing direct.

David - very interesting suggestion. This is just a part of a larger picture I want to draw that includes my recent experiences in Bolivia and Grenada. When I get done I will definitely follow up. Thanks!:: Clay


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@DiscoverChoc

Clay's intriguing analysis of this problem begs the question of whether there is genuinely any such thing as "fair trade" cacao, or if this noble term accurately applies to any other product involving physical labor (bananas, coffee, sugar, etc.) for that matter. During the Chocolate Retreat in Belize that I attended with him from 2/20-27/10, he referred to at least one cacao distributor who engages in "direct trade" which sounded far more preferable to the bureaucracy and red tape instrinsic to officially labeled "Fair Trade" cacao. If the U.S. Commerce Dept. and the Trade Representative specifically would take concrete action on this human rights issue, then caveat emptor would not be an essential principle for ethical consumerism to thrive among progressively minded activists who want to enjoy these products without being complicit in international human rights abuses. My practical advice to Clay regarding this article is to directly contact Arianna Huffington & ask her to post this article to the Huffington Post at www.huffingtonpost.com , or accept his submission with links included as reference points. Many more millions of politically interested citizens will be alerted to this critical problem on that site and simultaneously attract more readers to this Chocolate site as well. This subject belongs in the HP Green section will I know her staff will welcome this discussion with open arms.

Great post and great analysis, thanks Clay.

I would want to also ask them why I can't use the phrase "Fairtrade sugar" in my list of ingredients ont he back of a wrapper after paying the premium? Oh - I have to pay the premium AND pay the organisation? Now I understand....DuffyRed Star Chocolate Ltd

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updated by @clay: 04/11/15 14:52:00