Sustainable Chocolate: A Practical Business Example
Article Courtesy Of: http://www.agriculturesnetwork.org/...
LEISA Magazine • 14 nº 4 • December 1998
In 1991 Green & Black’s launched organic dark chocolate made with cacao grown in Togo, West Africa. The chocolate was a high quality product, the first 70% cocoa solids organic product to be sold in the UK. It was a success at the very top end of the chocolate market. In 1993, we needed an alternative source of cacao and started a new project in Belize that embodied organic and fair trade principles.
There had been a cacoa planting project in Belize since 1983 run first by the Overseas Development Agency (ODA) and from 1986 by USAID in co-operation with the food giant Hershey’s. These schemes were funded by bank loans secured against the collateral of Indian Reservation land. Farmers were encourage to buy hybrid seeds and agri-chemicals, clear forests and plant trees close together. This left little room for shade trees and fertilisers and fungicides became essential. The economics of the programme were carefully worked out, but were based on a selling price of US$1.80 per lb. The programme finished in 1992.
In October 1993, I spoke to Justino Peck, the Chairman of the Toledo Cacao Growers Association (TCGA), the co-operative that represents the Maya Indian cacao growers of the Toledo District of southern Belize. They were facing serious problems. The selling price for cacao had fallen from US$1.80 to 55c and loans could not be repaid. The bank threatened repossession and plantations were becoming overgrown as cacao farmers migrated north to work as orange pickers and sugar cane cutters to earn enough to service their debts and feed their families.
Co-operating with TCGATogether with TCGA, Green & Black’s worked out a new deal for a new product - MAYA GOLD. The co-operative signed a five year rolling contract to be our exclusive supplier of organically grown cacao for use in Maya Gold chocolate at a starting price of $1.25 per pound. We assured them that if we used cacao from other organic sources in Maya Gold we would pay the TCGA US$200 per tonne of such cacao used. We also agreed to assist them to obtain organic and fair trade certification and provision was made for training. A US$20,000 cash advance was made so farmer members could be paid in cash for their cacao. A 5 cent per lb forestry premium was offered to encouraged growers to thin out their trees and plant more shade trees. We also offered an additional 5 cent per lb to any grower who planted one mahogany, one cedar, one mamey fruit and one cohune nut tree per acre of cacao. This was to encourage long-term investment because after twenty years one mahogany tree could easily be worth more than a year’s cacao harvest. It was also to protect wildlife and biodiversity, an essential but difficult to measure aspect of organic farming. Trees would attract migratory birds, insects, and mammals and help maintain the balance of life that ensures no single species gets out of control. A habitat would also be preserved for game, an important source of protein in the Maya diet. Two members of the TCGA set up tree nurseries to provide the baby mahogany and cedar to plant out on the cacao. The TCGA took responsibility for implementing these provisions and the Soil Association inspected and approved the area for organic production. Slowly the project got off the ground as farmers adjust their agricultural pattern and, after a good start, the TCGA has kept going.
What made it a success?The quantity and value of the cacao increased. In 1993, the gross area income from cacao was US$10,000. In 1997 it was over US$100,000. Organic certification allowed the TCGA to tap into the fastest growing sector of the European and North American food industry. Next year the TCGA anticipate total income from Green & Black’s of nearly US$200,000.
Securing the market in advance played an important role in this success. Before Green & Black approach TCGA, we discussed the Maya Gold concept with Sainsbury’s, a leading UK supermarket chain. They agreed to stock the product for six months when it was ready. We also sought and gained Fairtrade Foundation certification and Maya Gold was the first product to bear their mark.
Maya Gold was launched at a press conference at the Oxfam stand at the BBC Good Food Show in London. The same day BBC Newsround sent a film crew to Belize and came back with footage of Maya villagers harvesting cacao which was shown on the afternoon and evening television news. Other press coverage was extensive and supermarkets were soon sending in orders. Sales have now levelled out but are still moving upwards.
ProblemsDespite the commercial success, problems emerged at the interface between the Maya deal with Green & Black’s, and the ODA’s master plan for the region, which was based on selling logging concessions to Asian companies to gain foreign exchange and on extensive rice growing. The ODA representatives in the South were cautious about us, probably rightly so, as there are plenty of people who come to the Toledo District, make all kinds of promises, and then disappear without trace. The ODA team warned the Maya of the risks of taking the organic route, advising caution.
Our 5 cent per lb tree planting scheme also met with resistance. The ODA’s forestry advisor notified the growers that any mature hardwood trees would belong to the Forestry Department and would not be the property of the grower. This was deeply discouraging to the growers and the new tree nurseries were closed down.
In addition, WHO’s malaria control programme in the area had a policy of spraying houses and areas where malaria had been notified with DDT. This nearly led to contamination of some organic cacao. Because there was no telephone communication, villagers had no advanced notice of spraying. The authorities have now agreed to give two weeks’ notice when they intend to spray so that villagers can get their cocoa sacks, as well as their children and animals out of the way before the sprayers arrive.
The futureGrowers are switching back to the local variety of cacao. It tastes better and although yields are lower the quality is superb. As well as increasing cacao production, the TCGA wants to diversify and, with organic status, they find they have an advantage. This season the TCGA grew a trial crop of 5 tonnes of red kidney beans and 5 tonnes of black beans which Green & Black agreed to purchase at EU organic market prices. A considerable increase is planned for 1999 because quality is excellent and prices are good.
Ginger is also being planted around the edges of the cacao trees and produces a good crop. This increases earnings from the same area of land enabling farmers to look after two crops at the same time. The ginger does not compete for fertility with the cacao. Annatto has also been grown widely and is processed in the villages to produce a yellow colouring paste which can be used in organic margarine and butter.
Organic agriculture lessons from the field
Studies have shown that organic agriculture is economically viable, that farmers can achieve more income as a result of premiums and that they need fewer inputs to maintain returns. Organic systems are based on the optimum use of local resources and technologies and can give farmers greater independence and more control over their means of production. However, more comprehensive monitoring is needed to analyse their sustainability and impact.
Many farmers enter organic production because they want to farm in a more holistic way. Other major stimuli for developing organic agriculture include environmental and social concerns, economic necessity, a lack of chemical inputs, and market demands. Small farmers are also encouraged to take up and stay in organic farming by the prospect of being able to produce more food at the subsistence level, having a larger surplus for local sale, or being able to cultivate a product of significant export value. Farmers are most responsive to organic agriculture when they have not been exposed to the ‘chemical message’ and their farming systems involve traditional or nil inputs. When production is relatively labour intensive and if farmers have the chance of developing the organic concept themselves they are also more inclined to convert to organic agriculture. Farmers are less likely to take up organic farming in situations of high labour cost and labour scarcity and where there has been an overexposure to the chemical message . Farmers with relatively mechanised farms and a commitment to high input, high output strategies are also less likely to convert. Insecure land tenure means small farmers will be reluctant to plant permanent crops.
Local and foreign NGOs, local and foreign buyers, government agencies and large private farmers are generally the main initiators of developments in organic agriculture. Development often occurs at one focal point and spreads outwards to link a widening range of organisations. In Egypt, the Dominican Republic and India, pioneering work by individuals has lead to the development of local organisations capable of representing the organic sector and to government recognition programme provides access to premium prices if certain practices are followed. It functions as an effective extension method with the capacity to support sustainability.
The challenge of going organicOrganic agriculture relies on natural predators and an understanding of local soil and environment. It is knowledge intensive and, from the beginning, requires more design and management. When farmers only known chemical solutions, implementing control of pests and diseases through measures such as rotation, composting and time of planting represents a major change. Organic agriculture requires time and well-trained extension workers. Active organic management is required for a least twelve months before organic status is conferred. Benefits will not be immediate and small farmers will require considerable support in the first years. High input farmers will require financial support such as capital grants or annual area payments to offset the financial problems associated with conversion. Studies show that, in Western Europe, farmer’s enthusiasm for organic agriculture correlates closely with the size of the conversion grants available.
It is probably no accident that coffee, cacao and tea are so prominent among the organic products supplied by developing countries. Conversion often does not involve radical change. These crops are often planted with shade trees even in conventional systems and, as such, they support a diversity similar to that encouraged in organic systems. Organic cocoa, for example, in contrast to conventionally cultivated plantation crops such as citrus, supports biodiversity and because the ground is not disturbed or cleared during planting and the root structures of other trees remain intact, soil and water resources are also conserved. However, an annual cropping system on bare, semi-arid land where there is little diversity and where few farmers can afford livestock will require much more time before it becomes a viable organic system. These factors represent a significant challenge to the small farmers’ motivation to converting to organic production.
David Crucifix, International Programme, Soil Association, 86 Colston Street, Bristol BS1 5BB, UK; Phone +44 117 929 0661; Fax +44 117 925 2504; e mail firstname.lastname@example.org
- Crucifix, D and Blowfield, M Organic agriculture and sustainable rural livelihoods in developing countries, Soil Association, 1998. A study commissioned by the Natural Resources Institute, UK.
First, cacao production has strengthened the position of women. Unlike rice, post harvest processing is an important part of cacao production and women play a key role. Beans are fermented in boxes next to houses for five days. Once they are fermented, they are dried in the sun, turned, and protected from rain. Women control these operations and as a result they can benefit directly from the income generated by cacao.
Second, secondary education in Belize is free, but the nearest high school is in Punta Gorda, 20 miles from the villages in the Maya Mountains. With no daily bus service, students have to board with families in Punta Gorda, a significant cost. As a result of increased cacao income, more students go to high school and a bus service has been set up on a daily basis. There is even talk of building a high school in one of the central villages.
Third, the TCGA has become a unifying force in a community where there are two distinct cultural and language groups: the Kekchi Maya and their neighbours the Mopan Maya. Mistrust and suspicion between the communities had been exacerbated when aid workers, missionaries and government officials were suspected of favouring one group over the other. Within the TCGA there is one shared goal - to sell Green & Black’s as much good quality cacao as possible.
Challenges aheadThe leaders of the TCGA are respected figures in their local communities, consulting to ensure that the Maya speak with one voice on matters where their community has hitherto been weak and divided. This is important as there are challenges ahead.
Traditional landholding patterns based on use have been weakened by Government policy and land the Maya considered to be their reservation land has passed to Malaysian and Chinese logging concessions. Loggers damage watercourses and take out all the valuable trees leaving only an impoverished landscape. This land could be reclaimed for organic cacao with the replanting of mahogany and other hardwoods but government policy discourages this. Government is also reluctant to recognise the historic right of the Maya to occupy and harvest their homeland.
To support their claims the Toledo Maya Cultural Council, in conjunction with the Indian Law Resource Centre and the National Geographic Society, recently produced a 150 page Maya Atlas that details Maya land use and occupation patterns in the Toledo District. The Council stakes a claim to land that has been used by the Maya for hundreds, indeed thousands of years.
Plans by the Interamerican Development Bank (IDB) have also threatened Mayan land security. The IDB has agreed to pave the Southern Highway, the road to the South, and this will open up the area to more economic activity. Originally IDB funding was conditional on the recognition of Maya rights, but these conditions have not been satisfied and, despite Maya protests, the construction of the highway is now open to tender. The Toledo Maya Cultural Council have taken their appeal to the Belize Supreme Court of Justice and it may well end up in the Privy Council in London if their legally legitimate claims are not satisfied.
Despite these problems we hope that Maya Gold will continue to serve as a model for larger projects and that our trading and marketing venture with the Maya of Belize will become typical of the way ethical trade can be conducted globally.
About the Author: Craig Sams Whole Earth Foods, 269 Portobello Road, London W11 ILR, UK Phone: +44 171 229 7545 Fax +44 171 221 6416; Email email@example.com Web: www.earthfoods.co.uk/wearth.home