Fairtrade certified cocoa farmers spend 36% of their premiums on increasing productivity and cocoa quality – far above Fairtrade International’s suggested 25% minimum, a report from the organization reveals.
Reykia Fick, media relations manager for the certification board, told ConfectioneryNews the finding sent an important message to the confectionery industry on how these premiums were invested.
“What’s really important is that it shows farmers are making very wise decisions about how premiums are spent,” she said.
Fairtrade International provides premiums of $200 per tonne - paid directly to farmer organizations and managed at "the sole discretion" of producers through their own general assemblies.
However, the report also found that farmer cooperatives felt more long-term agreements on sourcing would enable them to continue this pattern of growth.
Paying a premium, spending a premium
Fick said that the cocoa industry was looking for more transparency on how these premiums were being spent, and added that it was important for farmers to have a strong voice when communicating this to the industry.
She said the report evidenced that these programs made commercial sense for the industry and not only ethical sense.
“We also believe that as farmers invest more in productivity, the need to spend the premium on cash payments will go down,” she said.
Asked if there was a danger that top-down pressure from the industry would mean focus and funds were detracted from social projects, Fick said the report showed that resources were still being used to fund education and other community needs too.
A 2012 study by KPMG said it was unclear how cooperatives distributed premiums to farmers, which could mean unequal payments. However, it concluded cocoa certification brought more advantages than disadvantages for farmers by improving yields.
Long term investment needed
Mamadou Savane, sustainability manager for ECOOKIM, a farmers' cooperative that featured in Fairtrade's report, said more should be done to enable farmers to plan ahead.
“Every year we wait to see how the sales for the season will turn out and this makes it difficult to plan well, to ensure consistent delivery of programs for our members and to make continuous improvements. We want to work in long-term partnership with our end-clients and have them actively participate in our development path,” he said.
From bean to bar
Fick said this kind of investment has meant cocoa farmers are much more “savvy business partners”.
“What we see is, as co-ops build their strength, they become much more aware [of the wider commodity picture],” she said.