In today’s cocoa industry, conscientious consumers seek ethical and sustainable options that genuinely improve the lives of farmers.
There is an urgent threat to the future of food and the livelihoods of the people who grow them. Without our support for fairer prices today, farmers will find it even harder to tackle the climate and economic challenges of the future.
Learn more about direct trade, Fairtrade, and how you can support farmers and workers worldwide. In turn, they can protect the future of our food.
What is Direct Trade?
Direct trade has emerged as an alternative to traditional supply chains, promising closer relationships and higher remuneration. However, it is important to look into direct trade to understand its realities and explore the benefits that Fairtrade provides to cocoa farmers.
While direct trade may seem attractive at first, it still has the following challenges that need to be considered.
- Limited access for small-scale cocoa farmers: direct trade arrangements frequently require compliance with specific production and quality standards, which can marginalise smaller-scale cocoa farmers lacking the resources and infrastructure to participate. Consequently, existing inequalities within the industry persist.
2. Market Volatility and Price Risks: Direct trade exposes farmers to market fluctuations and price volatility. The absence of a safeguard such as fixed minimum prices renders farmers vulnerable to financial uncertainties during periods of declining cocoa prices or restricted access to alternative markets.
3. Dependence on Buyer Relationships: Relying heavily on a single buyer leaves farmers susceptible to shifts in buyer preferences, disruptions, and market changes. Establishing diversified market access and resilient supply chains becomes increasingly challenging for small cocoa farmers engaged in direct trade arrangements.
4. Limited Impact on Broader Communities: Direct trade frequently focuses on individual farmers, neglecting the comprehensive needs of broader cocoa-producing communities. While it may improve the livelihoods of select farmers, systemic issues and community development necessitate additional resources and efforts extending beyond the purview of direct trade.
5. Challenges with Natural Fermentation: Another challenge faced by smaller-scale cocoa farmers in direct trade is meeting the required mass for natural fermentation. Natural fermentation is a vital process in cocoa bean post-harvesting, contributing to the development of desirable flavours and aromas. However, limited production volumes may make it difficult for smaller farmers to achieve optimal fermentation conditions, potentially impacting the flavour profiles and overall quality of their cocoa beans.
The Advantages of Fairtrade
In contrast to the challenges faced in direct trade, Fairtrade offers substantial advantages and positive outcomes for cocoa farmers:
- Equitable Pricing and Stable Income: Fairtrade establishes a minimum price for cocoa, providing farmers with a financial safety net during market downturns. Fair prices ensure that farmers’ production costs are adequately covered, enabling them to maintain a stable income and engage in long-term planning.
2. Fairtrade Premium for Community Development: Fairtrade-certified cocoa sales generate a social premium, which is directed towards community development projects. These funds support initiatives such as education, healthcare, infrastructure improvement, and sustainable farming practices, fostering holistic community development.
3. Empowerment and Democratic Organisation: Fairtrade encourages farmers to form cooperatives or associations, facilitating democratic organisation and empowering farmers to actively participate in decision-making processes. This inclusive approach promotes sustainable development within their communities and enhances farmers’ agency and autonomy.
4. Environmental Sustainability: Fairtrade standards encompass guidelines for environmentally friendly cocoa farming practices. These standards advocate responsible land management, sustainable water usage, and reduced reliance on pesticides, thereby minimising the ecological footprint associated with cocoa production.
5. Collaboration for Effective Fermentation: Fairtrade’s cooperative model enables smaller cocoa farmers to pool their resources and cocoa beans, ensuring the achievement of the required mass for natural fermentation. By collaborating and sharing facilities, farmers can enhance the fermentation process, resulting in improved flavour profiles and higher-quality cocoa beans.
Fairtrade Makes a Genuine Difference
While direct trade may initially seem enticing, it brings inherent challenges that limit its benefits for cocoa farmers, particularly those operating on a smaller scale. Fairtrade, in contrast, provides a comprehensive and structured framework that ensures fair pricing, community development, empowerment, and environmental sustainability.
By consciously selecting Fairtrade-certified cocoa, consumers play a crucial role in supporting farmers’ endeavours towards improved livelihoods and contribute to a more equitable and sustainable cocoa industry. Together, we can make a meaningful impact on the lives of cocoa farmers worldwide, fostering an ethical and responsible global cocoa trade.
Article courtesy of Fairtrade Fortnight. Learn more about Fairtrade Cocoa here.