Dom:Thanks for the reference to FairTracing.org . There is some very interesting stuff there and the 5percent4Farmers system could be implemented on top of it. I am going to reach out to them to see about collaborating.:: Clay


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@DiscoverChoc

Thanks for the very interesting posts on fair trade Clay (and hello from a first time poster, brilliant site).Hope you dont mind if I make a few comments (although I am far from an expert and very happy to be found completely wrong! (my intention is to learn)). Agreed, some flaws with fair trade (ft) concept:1) as you say in another post ft provides a fairer deal for producers in some countries than those in others (given differences in $ purchasing power across different countries);2) as Matt says it fails to incentivise farmers to improve quality (unlike say direct trade concepts) why put in more effort to raise the bar re planting more flavour-some but more labour intensive bean, or say spend more time and effort fermenting if you know you will get the same price as your more laid back neighbor who will just take the easy options? ;3) the farmer could actually be worse off : if every farmers goal is to sell fair trade cacao then wont this cause oversupply given the finite (albeit growing) fair-trade market? So those beans that s-he cant sell fair-trade (if s-he does not belong to a co-operative) will have to be sold on the open market at rock bottom prices given the glut.4) as you have pointed out before, the minimum cacao price contract seems, currently, a pretty rubbish deal after the spoils have been divied up. The ft floor price ($1750 per tonne isnt it? ie $1600 plus $150 premium) has been irrelevant for the last four or five years with open market cacao prices being above the floor (dont know why the floor hasnt been adjusted upwards to take into account of inflation). So the ft advantage for the farmers now (and for the foreseeable future in my opinion as I cant see cacao going down below $1600) comes from the $150 premium which as you point out is currently only about 5% above market. And if prices rise the premium will be even less in % terms. Obviously, when prices were at the $1000 level in the early 90s then farmers were getting a much better deal (when the ft price-premium was 75% above the open market).All this said, I think the fair-trade foundation has done really important work to inform western consumers about the plight of developing world farmers, their miserable wages, living standards, environmental standards etc AND to empower them to demand changes-improvements using their wallet. It is also keeping big business accountable to some extent on wages, the environment etc given the ft certification many consumers now expect from big business.But, I agree ft is mostly for the big boys. Its not really helping the small scale farmer (who as you say find certification costs prohibitively expensive) reach international consumers. Nor is it really helping the ethical chocolate maker or craft producer who pays way above the minimum fair-trade price because they think it is the right thing to do in the circumstances, since their ft logo, if they go for it, will lump them in with all the "no more than $150 premium" corporate buyers. One size cant fit all.As you say Clay no point criticising a system without a better alternative to propose so really interested in your new site, will check it out. PS I came across The Fair Tracing Project a while ago whilst browsing (and no, I have no connection with them!) and I thought there were some great ideas in there. No doubt you have come across it already.Sorry for rambling (especially on a first post)..and sincerely hope I have not offended anyone!Dom

Matt:I have suggested on several occasions that FairTrade actually exerts negative pricing pressure on the market by setting a value on the time and effort involved in the certification process. As some have pointed out (Frederick Schilling for one), this is not the case - FairTrade pricing sets the floor for negotiations. However in some cases (especially with commodity buyers looking to "greenwash" their brands by FairTrade certifying one or a small percentage of their products) FairTrade pricing sets a de facto price cap.Farmers get paid by the pound for their product. Given limited monetary, time, and labor resources they will always opt for a crop that will produce more for a given ratio of money/time/labor to maximize their return. The challenge becomes when the return does not value the investment. A maximum 8% premium - that then is split among many actors (including the certification fee "kickback" paid to the certifier) - is not nearly enough to justify the effort in most cases.In the end, the place to start is the consumer, who needs to realize that in order to help out the farmer we need to pay more for food and value quality. The issue (in the US anyway) is that federal agricultural and food policy for the last 30+ years had focused on delivering cheap calories to the consumer without considering the effects on agricultural workers, their families, and the communities they live in.


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@DiscoverChoc

Clay,Interesting post. I always hesitate to bring this up because people can react quite vehemently to it, but to me one of the biggest dangers of "Fair Trade" certification is that farmers on plantations growing flavor beans would need to join cooperatives to get the certification and have no incentive to grow anything but the most productive beans (often times least flavorful beans).I have talked to a handful of artisan chocolate makers who all agree that Fair Trade is a deterrent to biodiversity and quality. Many even go as far as to say that Fair Trade is a guarantee of commodity grade beans. Any thoughts in that regard?Thanks,Matt

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@DiscoverChoc

updated by @clay: 04/18/15 18:29:03