Is Fair Trade Certification Really Fair to Small Cacao Farmers?

Is Fair Trade Certification Really Fair to Small Cacao Farmers?

You may have come across the fair trade logo and the slightly higher price of the associated chocolate bars. The fairtrade badged goods have certainly created a market of goods in the US, but there’s one question that really perplexes consumers: is fair trade really fair to small cacao farmers that have a family to take care of?

Why was fair trade set up in the first place?

Fair trade was introduced with a simple end goal in mind: to provide better prices, working conditions along with sustainable production and fair trading terms for producers who work in the developing countries.

What is the Issue?

Many farmers cannot even pay the fees to acquire the Fair Trade certification, even as cooperatives. Farmers who can afford to pay, hope to get a better minimum price for their produce, so they can sustain production. Another question that comes to mind is the assurance of good labor practices when farmers do obtain the certification.

Issues on the Farmer’s End

There have been cases documented by journalists and researchers that the farmers who have fairtrade certification, are using unwholesome labor practices including child labor and unfair compensation, among several other things. These instances were found in countries in West Africa and they only lead to one fact: there needs to be greater supervision and monitoring for the certification to be of use.

But the farmers are not to blame completely.

The fair trade hasn’t been all that fair to farmers and their families as well. The certifications claim that they take the rural farmer out of poverty, but in all actuality,they are not as effective as one would want them to be. Fairtrade International, for example, has had a calculated impact of just $0.04 per person per day according to the Fairtrade International (2015/16 report). This is not enough as the average farmer has close to 5 dependents.

Now We Come to the Supply Side of Things

The fact is that a bar of chocolate that you see in the grocery store with the fair trade badge doesn’t have all ingredients fairly traded. Although fair trade certification was introduced to make production of coffee, cacao and other commodities socially sustainable,the truth is far from that

This means that only items that can be sourced on fair trade, like sugar and vanilla, will be traded fairly. There are vegetable fats, emulsifiers, milk and other ingredients that are used in chocolates too.

If you look at the back of a bar of Dairy Milk chocolate from Cadbury, it says 70% fair trade ingredients used. That’s not the last of it.

Cacao is a commodity, and like all commodities, it is bound to get mixed with other commodities (which include non-fair-traded ones) in the supply chain process. Mass Balance serves to balance this issue but that’s also not a viable solution. Mass balance means that the equal amount of cacao beans need to be purchased by big manufacturers for fair and non-fair trade.

It still doesn’t justify the use of the beans in the bar. Who is to say that the cacao beans used are fair traded on not (as they are essentially “mixed”)!

What is the Impact

The farmers who have bought the certification are the ones that suffer because they may not get the full representation in the bar of chocolate that you bought with that fair trade logo on it. With clever marketing, big giants like Cadbury and Mondelez are making it appear to customers that the traditional chocolate manufacturing is just as ethical as the fair traded one.

Why would consumers pay more for the same bar of chocolate then?

This is one of the major issues why fair trade seems to be in question: it impacts the bottom line of the poorer commodity farmers (including cacao).