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Mars will Invest $1 billion in sustainable cocoa supply chain and is distancing itself from certification schemes

21 Octubre, 2018 - 11:27
In September 2018 Mars Wrigley Confectionery launched a new plan to improve the sustainability of its cocoa supply chain. Cocoa for Generations is backed by an investment of $1 billion over 10 years and is incremental to the Sustainable in a Generation Plan investment Mars announced last year.
Mars aims to have 100 percent of its cocoa from the Responsible Cocoa program responsibly sourced globally and traceable by 2025. According to Mars, "Responsible Cocoa means having systems in place to address deforestation, child labor and higher incomes for farmers." This announcement seems a step backwards because the company has already pledged in the past to have 100% sustainably sourced by 2020. 
The company will employ GPS technology to mitigate deforestation. It will also work closely to monitor suppliers for child labor violations and interventions as needed. 
While this new approach is implemented, Mars will maintain its current certified cocoa levels with the Rainforest Alliance and with Fairtrade and work with both organizations as they continue to strengthen implementation to raise the bar across the cocoa sector. Mars applauds both certification organizations’ efforts to organize individual farmers into groups and cooperatives, providing training and implementing management systems in certified farmer groups, and is committed to collaborate with them to improve audit controls, child labor monitoring, traceability and premiums paid to farmers.  As further measurable efforts are made, Mars will continue transitioning its cocoa volumes to these new and stronger approaches.
Supply Chain Divide reported that: "John Ament, Global Vice President of Cocoa, told Reuters while the company had previously relied on certifiers such as the Rainforest Alliance and Fairtrade, it now sees those certifications as insufficient to ensure sustainable practices and a good wage for farmers, which have been losing income despite only growth in demand for cocoa. The company is, therefore, transitioning to setting higher standards internally."
Despite this statement, CEO of The Fairtrade Foundation Michael Gidney said: “Fairtrade certification remains part of the programme and we will work together with Mars to bring a better, more sustainable future to the farmers.”


Fair Trade Movement And UNCTAD Join Forces

20 Octubre, 2018 - 16:10
The two organizations have agreed to work hand-in-hand in their efforts to ensure all workers and farmers get a fair share of the benefits of trade.
The Brussels-based Fair Trade Advocacy Office and UNCTAD are joining forces to improve the living and working conditions of artisans, workers and smallholder farmers and producers in Africa, Asia and Latin America.
The two organizations, which have both been calling for a more equitable trading system for decades, signed a Memorandum of Understanding (MoU) on 19 October in Madrid.
“From day one, our belief was that the best way to help developing countries grow should come not simply from distributing aid, but through encouraging their trade,” Isabelle Durant, UNCTAD’s deputy secretary-general, said.
“But for trade to be a tool for development, everyone must get a fair deal,” Ms. Durant said. “This is a philosophy we share with fair trade advocates.”
Ms. Durant and the executive director of the Fair Trade Advocacy Office, Sergi Corbalán, were in the Spanish capital attending the annual International Fair Trade Towns Conference.
More than 2,000 fair trade towns now exist – a phenomenon that underscores the growing concern citizens and governments have with current trading practices. And concerned consumers increasingly speak up with their purchases.

Global sales of fair trade certified goods – such as coffee, cacao and bananas – climbed 8% in 2017 to reach €8.5 billion ($9.74 billion), according to Fairtrade International's annual report. The profits put an additional €178 million ($204 million) in the pockets of 1.6 million farmers and workers.


Get rid of labels
But what about the billions who don’t have a label?
For Mr. Corbalán, the long-term answer isn’t to increase certification, it’s to change the system so that all trade is fair.
“Our ultimate goal is to get rid of fair trade labels,” he said.
“We want all farmers to receive a decent price. We want all cooperatives to be strong and able to negotiate the terms of trade. If there’s eventually no need for fair trade labels  anymore then it’s very good news,” he added.
“But we need help because we cannot do the job alone.”
Partnering with UNCTAD, he said, will help get things moving in the right direction.
According to the MoU, the partnership will focus on “promoting a fair and equitable distribution of benefits among value chain actors, especially workers, artisans, smallholder producers and micro, medium and small enterprises.”
“We trust the cooperation of the fair trade networks with UNCTAD will contribute to more fairness in global supply chains and a proliferation of fair trade enterprises” Mr. Corbalán said, adding that the priority sectors will be agriculture, home-wear, jewellery and clothing accessories, leather, cosmetics and textiles.
Ms. Durant said: “I am very happy to sign this MoU tonight, I am certain this will set the first of many steps leading to the change that the developing countries need.”

Fair trade struggles to lift cocoa farmers out of poverty in Ivory Coast

19 Octubre, 2018 - 16:18
Real concern

In recent years, there have been numerous studies attesting that cocoa producers in Côte d'Ivoire, the main producing country, live in poverty. They earn EUR 0.86, around 1 dollar a day, according to Barry-Callebaut and the French Development Agency[1]. This income keeps them below the poverty line[2] and to make ends meet they have to resort to child labour and rampant deforestation (the productivity of cleared land required less labour in the early years).
Disturbing fact: whether producers are certified fair or sustainable does not change much as regards the income they receive. Fairtrade International and True price say[3]that only 42% of Fairtrade certified producers earn above the extreme poverty line[4]and only 23% above the poverty line. According to the same survey, raising 80% of farmers above the poverty line requires a cocoa price of $ 4.72/kg.[5]In other words, Fairtrade International must raise its guaranteed minimum price which is currently only $2 a kilo of cocoa, to which a development premium of $ 0.2 kg is added.[6] The authors of the 2018 Cocoa Barometer are also convinced that the "Fairtrade minimum price is probably far too low to ensure that farmers escape poverty"[7], which raises questions about how this minimum price, in effect for several years, was calculated. Especially as consumers have been led to believe that a fair price can cover the production cost and ensure decent living conditions.

To be fair, it should be noted that the competition between certification systems is fierce in the cocoa market and is not to Fairtrade’s advantage. Large companies prefer UTZ or Rainforest Alliance certifications, which do not set guaranteed minimum prices for producers. In 2017, just under 1.5 million tonnes[8], or 1/3 of the cocoa produced in the world, was UTZ certified. Added problem: 66% of Fairtrade certified cocoa is not sold under fair trade conditions due to a lack of market opportunities. In Belgium, only 1% of the chocolate sold is fair trade.
But this failure (77% of Fairtrade certified producers are below the poverty line) also has other explanations. According to BASIC, which compared the fair trade cocoa sectors in Peru and Côte d'Ivoire, "fair trade cocoa seems to have little significant impact when it is integrated in standardised mass production value chains (this is even more flagrant in the case of sustainable certification.)” [9] which is the case in Côte d'Ivoire.



Cocoa producers in Côte d'Ivoire ©  TDC

How to strengthen equity

To be truly beneficial to producers, to be a real force for change, fair chains must tackle various projects, concurrently:
  • Prioritise the structure of supply chains that are alternatives to those of large groups by enhancing quality through a differentiated price of farm gate prices depending on the varieties (criollo, mercedes, forastero) and grades (1 or 2) [10] of cocoa. In Côte d’Ivoire it is quite possible to get out of the "commodification" that keeps prices low, and to develop specialty cocoas of origin. An example is the SCEB cooperative which produces high quality organic cocoa, sold to Ethiquable[11] to make a certified "small producers' label" chocolate.[12]The Südwind research institute noted that the quality of Côte d'Ivoire's cocoa has increased in recent years, which seems to have pushed some German manufacturers to buy more cocoa in Nigeria, where quality is not as good and prices can be maintained at current low levels.
  • Support the structuring of cooperative unions to make producers' voices heard and try to rebalance the balance of power with buyers.
  • Strengthen co-operatives, particularly in governance, member services, marketing and financial management so that they can acquire sufficient working capital, which in turn will help keep their members.
  • Promote a minimum income for the various stakeholders in the sector, chief among which are cocoa farmers. Fairtrade International and True Price have just estimated this income at $ 2.51[13]per person a day in Côte d'Ivoire. To get closer to this minimum income, Belvas, a Belgian chocolate maker known for its organic chocolate and Fairtrade, launched a new range of Côte d'Ivoire chocolate in October 2018.[14]$ 2.4 (including $ 1.2 in premium) per kilo goes to the producers' cooperative. Unaffordable for the consumer? The premium only represents 10 cents a tablet of 180g.
  • Increase low yields (435 kg/ha) [15] and promote crop diversification
  • Fight against deforestation (Côte d'Ivoire has lost 13 million hectares, or 80% of its forest cover since 1960) to preserve biodiversity, limit its effects on rainfall, yields and therefore, in the long term, its downward impact on revenues. Fair trade chocolate should only be produced with cocoa grown according to the principles of agroforestry.
  • It has to be said: increase the size of farms which are sometimes too small to be profitable. In Côte d’Ivoire they should at least be 2 to 3 hectares, with yields of 750 kg/sec/ ha.[16]
  • To increase the value added in the country of origin, fair trade could also encourage the local processing of cocoa. In this respect, even if the scale remains very limited, the initiatives of local entrepreneurs who have just launched their chocolate brands in Côte d'Ivoire and Ghana, but also in other African countries, are to be welcomed[17].

    Drying ov cocoa ©  TDC
    National platforms that bring together public authorities, cocoa and chocolate manufacturers, retailers, NGOs and research institutes are also good operational tools to contribute to a more sustainable cocoa / chocolate sector, to better traceability and better income for producers. There are some in Germany, Switzerland and the Netherlands.
    However, complex dynamics and the importance of the issues mean that to make the value chains genuinely more sustainable, voluntary initiatives such as fair trade are not enough. In the countries of origin, they must be backed by legislation designed to guarantee remunerative prices for producers, to enforce the conventions of the International Labour Organisation and to stop deforestation. In consumer countries, as has been done in France, legislation which holds companies liable for the impact of their activities all along the production and supply chain is necessary.[18]



    [1] Gaëlle Balineau (AFD) Safia Bernath (Barry Callebaut), Vaihei Pahuatini, Cocoa farmers’ agricultural practices and livelihoods in Côte d’Ivoire, Insights from cocoa farmers and community baseline surveys conducted by Barry Callebaut between 2013 and 2015, Technical notes, AfD.[2] 1.27 USD (World Bank)[3] Fairtrade International and Ture Price, Cocoa Farmer Income. The household income of cocoa farmers in Côte d’Ivoire and strategies for improvement, April 2018. The study is based on two surveys conducted in 2016, covering 3,235 farmers and 23 co-operatives.[4] 0.78 USD (World Bank)[5] Fairtrade International and Ture Price, Op., Cit.[6] Fairtrade International is expected to announce a revaluation of the minimum price paid to producers by the end of 2018.[7] Antonie Fountain, Friedel Huetz-Adams, Cocoa Barometer 2018, Voice. [8]https://utz.org/wp-content/uploads/2018/06/UTZ_Cocoa-Statistics-Report-2017.pdf[9] BASIC (Bureau for the Appraisal of Societal Impacts and Costs), The dark side of chocolate, An analysis of the conventional, sustainable and fair trade cocoa chains, for the French Fair trade Platform, [10] Cocoa is classified into three commercial types: Grade 1, Grade 2 and Sub grade. Cocoa grades 1 and 2 are exported under the trade name "Good fermented: GF". The grading is based on the percentage of defective beans (*Conseil Café-Cacao de Côte d’Ivoire).[11] More information: SCEB – Commerce équitable en Côte d’Ivoire [12] More info: Le label des petits producteurs [13] Fairtrade International and True Price, Op., Cit.[14] More info: Belvas, la chocolaterie belge qui s’attaque au travail des enfants. [15] Gaëlle Balineau (AFD) Safia Bernath (Barry Callebaut), Vaihei Pahuatini, OP. Cit. [16] Johan Declercq, Cocoa and sustainable chains expert. He has worked for 12 years at Max Havelaar Belgique (now Fairtrade Belgium).[17] Hadassah Egbedi, 8 Female Entrepreneurs Promoting Bean to Bar Chocolate Production in Africa, Ventures Africa, August 20, 2018. Un artisan chocolatier ivoirien lance le premier chocolat de pâtisserie fabriqué en Côte d’Ivoire, Jeune Afrique, August 30, 2017[18] Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d'ordre

    More than €8 billion for Fairtrade products in the world

    18 Octubre, 2018 - 16:27
    "Global sales of Fairtrade products rose by 8 percent to nearly €8.5 billion in 2017, generating estimated premiums of €178 million for farmer and worker organizations." 

    Read further on Fairtrade International website 

    TDC lance un nouvel appel à propositions: coaching en gestion financière et organisationnelle et coaching en marketing

    3 Octubre, 2018 - 15:03
    Trade for Development Centre  is launching a new call for proposals for a coaching track in financial and business management, and a coaching track in marketing.
    Through on-site coaching, TDC aims at reinforcing the capacities of MSME in management (financial, organisational, governance) and in marketing (positioning, access to markets, communication, sales). The main objective is to increase the turnover as well as the revenues through a sustainable reinforcement of the organisation and a better market access.
    Concerned value chains – sustainable tradeCocoa, coffee, fruits, vegetables, leguminous plants, precious metals, tourism.
    Countries: Benin, Burkina Faso, Burundi, DR Congo, Ghana, Ivory Coast, Mali, Morocco, Rwanda, Senegal, Tanzania and Uganda.
    This Call for Proposal entails 2 steps:
    step 1: a preliminary training in data capturing, which will take place in 2019. This training is not compulsory, but it will be a good preparation for the application to TDC’s full coaching program. The registration form needs to be sent back by 19 November 2018 at the latest.
    step 2: a full coaching track in financial & business management and in marketing, with several modules spread over 3 years as from 2020. For this, the application documents need to be sent back by 30 October 2019 at the latest.
    The service proposal, as well as the eligibility and selection criteria are detailed in the documents here below.
    We encourage you to register if you meet the criteria, or to share this information with your members, partners, contacts,...
    More info

    Study: potential of vietnamese Fairtrade cashews nuts

    19 Septiembre, 2018 - 13:37
    This study investigates whether and how Vietnamese Fairtrade cashew nuts can conquer a solid position in the world market. The study was carried out by Globally Cool on behalf of the Trade for Development Centre.
    In 2016, globally, 439,000 tons of cashew nuts were exported. 14,000 tons, or 3% of the total, was Fairtrade certified. The US imported 55% of Fairtrade cashew nuts, outdoing the Netherlands (23%) and Germany (7%).
    Vietnam is the third biggest producer of cashew nuts and the number 1 exporter. The potential for developing the country’s Fairtrade cashew supply chain is huge, but there are many challenges too. The study has eight specific recommendations in order to help them reaching their full potential.
    Read more

    What Are We Getting from Voluntary Sustainability Standards for Coffee?

    5 Septiembre, 2018 - 08:52
    From: Centre for Global Development

    Abstract

    "Demand for and supply of “sustainable” coffee (and other commodities) have grown markedly for two decades, as has the literature analyzing the effects of voluntary sustainability standards for coffee. The evidence for assessing the impacts for smallholder producers and the environment remains relatively weak, however. A relatively small number of studies use methods that allow researchers to attribute observed outcomes to sustainability certifications. 
    This paper reviews research from the past decade on the effects of coffee sustainability schemes to see what we have learned about the impact of such schemes, and whether positive livelihood effects are mainly the result of relatively better off households choosing to participate. Overall, the available research suggests that certification schemes can be beneficial, but context matters, and the poorest, most vulnerable smallholder producers are able to comply with sustainability standards only with substantial external help."
    Read the report by Kimberly Ann Elliott