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Improvements in the Vanilla and Cocoa IndustriesFor generations, the vanilla and cocoa farmers of the world — mostly concentrated in Africa — have been plagued by poverty. But recent trends in each of their respective sectors are starting to change that.

The Vanilla Sector

In the case of vanilla, prices have risen for the past five years to more than 10 times their value for the last several decades. This high market price averages $400-$600 per kilo, where past prices began at $50 per kilo.

Madagascar, responsible for more than 80% of vanilla in the world today, has undergone varying levels of changes as a result. Theft and related protection measures are more prominent as vanilla grows more valuable, but economic changes are also visible. Reporting from NPR suggests that growth in certain towns, like those in the province of Sava, has begun to noticeably outpace areas outside of the heart of the vanilla country. Many formerly-impoverished farmers who could only afford self-grown food can now purchase more than just subsistence diets. Currently, many such farmers are even investing in new homes.

The value of the commodity, as well as the risk of holding it, is partly why vanilla farms are now attracting major investment from external and foreign buyers. These are often big chocolate companies that seek vanilla as a key ingredient. Such buyers are working with nonprofits in the region, such as the Livelihoods Fund for Family Farming. These partnerships serve to build new schools, optimize health care and encourage local cooperatives in order to ensure delicious and sustainable vanilla comes from areas with steady livelihoods. The need for quality investment is not limited to the vanilla sector, however. Vanilla and cocoa both share the limelight in this regard.

The Cocoa Sector

While the cocoa market hasn’t seen the same rise in profitability, measures are well-underway to combat poverty in that sector too. Living Income Differentials (LIDs) are among the more popular initiatives spearheaded by large cocoa buyers, including Ben and Jerry’s. LIDs are payments made in addition to the base price of cocoa in order to accommodate the farmers’ living expenses. The LIDs being paid by Ben and Jerry’s is worth about $600,000.

The Hershey chocolate company has also become one of the largest chocolate sellers to begin supporting LID policies. Despite ongoing criticism for Hershey’s shady dealings on the cocoa market that allegedly promote shortchanged (and possibly child labor), which runs contrary to its verbal support of LIDs.

Regardless, LIDs are only the tip of the iceberg compared to what’s also being suggested by many advocacy groups. These include the World Cocoa Foundation, the Campaign for Fair Chocolate, the Barry Callebaut Group and The Counter, among many others. Although some of these groups have seen setbacks due to the pandemic, some, such as The World Cocoa Foundation, have continued their efforts to connect cocoa farmers with big chocolate manufacturers to strengthen partnerships and common sustainability goals. These priorities have also been reflected in the European Union’s agenda, as proposed legislation considers sustainability and human rights concerns.

Barry Callebault, responsible for one in four chocolate and cocoa products worldwide, still maintains its ambitious goal to lift 500,000 cocoa farmers out of poverty by 2025. Investing and goals like that of the “Forever Chocolate” initiative also aim to combat child labor and climate change.

The Big Picture

While markets for vanilla and cocoa have been volatile, the recent upswing has brought with it renewed interest in returning the abundant profits to those who need it most. The impoverished workers who muster the strength to cultivate the crops and prep them for the market despite living below the poverty line deserve more. The initiative has strength in its broad support, but only time will tell whether the resulting actions will be successful and sustainable.

— Bardia Memar
Photo: Flickr

Ben & Jerry's Pays Cocoa Farmers a Living WageWith 75 flavors spanning from classic Vanilla and Chocolate Fudge Brownie to Phish Food and Chunky Monkey, Ben & Jerry’s operates in 38 countries. Yet, the ultra-popular brand name signifies more than a tasty frozen treat. For much of its history, Ben & Jerry’s has been an outspoken supporter of social justice movements.  Ben & Jerry’s most recent efforts to create a more equitable future prioritize providing a living wage to cocoa farmers in West Africa.

Cocoa Farming in West Africa

The vast majority of the world’s cocoa beans are grown in West Africa, and especially in Côte d’Ivoire and Ghana. Côte d’Ivoire alone exports 30% of cocoa beans sold to such chocolate makers as Nestlé and Mars.  The global chocolate market is a large one. It generates huge profits for the mostly European manufacturers who create chocolate bars and other sweets. In addition, it is extremely profitable for the retailers who sell these products on their shelves.  In 2014, for instance, sales for chocolate confectionary added up to $100 billion.

The value chain is incredibly lopsided, though. Côte d’Ivoire exports more cocoa beans than anywhere else in the world. Around 25% of the country’s population relies upon income generated from cocoa.  Yet these cocoa farmers earn barely $1 per day, less than the $1.90 that marks the extreme poverty line. International sales for chocolate depend upon these farmers and their laborers, but they will see just over 5% of a chocolate bar’s final value.

Cocoa farmers have long faced the challenge of a volatile market since predicted demand and harvest yields can drive prices up or down. Tim Adams highlighted this problem in The Guardian after the price Côte d’Ivoire farmers received fell sharply in 2017. At the same time, Barry Callebaut, which ranks among the world’s biggest cocoa processors and chocolate manufacturers, earned 12% more the next year, with a profit of $288 million.

Improving the Supply Chain with Fairtrade

Fairtrade International is one organization working to change this disparity. Since its founding in 1994, Fairtrade has sought to give small producers a square deal by creating more transparency in the supply chain. Although the organization now works with farmers on multiple continents growing a wide variety of crops—including bananas, tealeaves, sugar cane and coffee beans—cocoa was one of its first targets. This has meant that buyers of any Fairtrade-certified chocolate bar can be sure that:

  1. The Fairtrade Minimum Price cocoa farmers receive is geared towards covering production costs, even when prices fall.
  2. Farmers also receive a Fairtrade Premium that they can use to pay for any project they wish. In the past, these have included buying new trees and improving storage facilities.
  3. Cocoa producers agree to provide good working conditions for their hired workers. Discrimination, forced labor and child labor are all banned.

Finally, Fairtrade is working to establish living incomes for small-scale farmers and agricultural workers, over and above nationally set minimum wages. According to Fairtrade, a living income should allow people to afford nutritious food, decent housing and other essential needs with a small amount set aside to pay for unexpected emergencies.

Ben & Jerry’s Commitment

Here is where the ice cream brand Ben & Jerry’s is stepping up to help the cocoa farmers. The company is a longtime supporter of Fairtrade. Additionally, it has paid millions in Fairtrade Premiums to small-scale farmers growing key ingredients like cocoa. Now, however, Ben & Jerry’s has committed to paying higher prices so that 5,000 farmers in Côte d’Ivoire will earn $600,000 more per year. Divided equally, each farmer will receive about $120 in additional income.

While the price increase will not immediately fill the gap between minimum wages and a living income, Ben & Jerry’s Chief of Social Mission Dave Rapaport has hopes for the future. He told Forbes that Ben & Jerry’s work with Fairtrade is an integral part of a larger strategy—and not just in Côte d’Ivoire. “This is one further step on a longer-term journey that will continue for us,” he said, “[because] we are really committed to helping farmers in our supply chain obtain living incomes and we will be expanding those efforts to supply chains beyond cocoa.”

Angie Grigsby
Photo: Flickr