You might have seen an article on ethical chocolate published by Ethically Kate (@ethicallykate.) In it, Kate made some fairly strong claims about the Fairtrade system and how it works.
We’re not opposed to criticism, and happily agree that there is no perfect system to fix an imperfect world, but a number of assertions Kate made about Fairtrade are either incorrect or only part of the story. Her original piece is here. The parts that apply to Fairtrade from her article are below in red, and our response is in black.
Does Fairtrade mean anything?
Firstly, let’s recap what Fairtrade means. Fairtrade has a system that defines a ‘fair price’ based on the current commodity index. They award the ‘Fairtrade’ mark for those companies who pay roughly 10% on top of current commodity market value and who provide minimum security for growers.
This is half right. Fairtrade has a Minimum Price that is based on what farmers need to cover their costs of sustainable production. It does not change based on the market value of the commodity so this part is just plain wrong. However, the idea that it provides a safety net for farmers so that they can plan for the future is correct. Importantly, it’s a MINIMUM PRICE so if their product is worth it, they can get much more than this price but will never get less.
What Kate might have been confusing this with is the Fairtrade Premium. The buyer, if they have agreed to be part of the Fairtrade system, pay an extra amount to the cooperative (rather than the individual farmers) and the cooperative members vote once a year on how to spend that money. For cocoa, the Fairtrade Premium is USD $240 per tonne. In 2020, the amount of Premium money raised through cocoa sales alone worldwide was almost $40 million USD.
You also have to be a co-op to get the Fairtrade certification. This rules out a large amount of farmers that are independent and doing amazing things but do not have co-op status.
You do have to be part of a cooperative (we call them producer organisations or PO’s) to be Fairtrade certified but there’s good reason for that. 80% of the world’s farmers own less than 2.5 hectares of land. They produce tiny amounts of coffee, cocoa, sugar, tea and it means they have no power in the market. Joining together with other farmers makes them stronger and means we can work with them effectively.
That said, you do not have to be a small-hold farmer to be part of cooperative. So, if you are a big farmer doing amazing things, you can choose to be part of a Fairtrade PO with all the benefits that brings. Or not. No pressure.
The Fairtrade criteria also costs money to be part of (an ongoing cost independent growers may struggle to afford) and favours regions like South America, where co-ops are common, but not the Pacific Islands, where independent setups are more common.
There is a small annual fee paid by the PO but often they use the money they make from being Fairtrade certified to pay this. Like most things, we’ve found that if certification is completely free, it’s not valued in the same way. The fee structure has been developed to enable cooperatives to participate regardless of their size and Fairtrade’s fees are actually much lower than comparable certification schemes.
As for Fairtrade favouring South America, this is also inaccurate. In fact, the greatest number of Fairtrade cocoa farmer cooperatives (266) are in Côte d’Ivoire in Africa. Part of how Fairtrade works is that we look at where the need is the greatest, the parts of the world where farmers and workers are more likely to be marginalised, and we focus our efforts there. Côte d’Ivoire is a good example of this – child labour and poverty is a huge problem there and we’re working hard to make a difference.
In fact, there are over 1.9 million Fairtrade farmers and workers in the world and they are fairly even spread out amongst developing countries. Here’s the map that shows this.
Fairtrade Australia New Zealand actually works with 17 PO’s in the Pacific with over 50,000 farmers. They produce coffee, cocoa, sugar, ginger and vanilla. We have staff in PNG, Fiji and Timor-Leste and actively support farmers there and throughout the Pacific to form cooperatives and get Fairtrade certified. In 2022 we had 2 new producer organisations become certified – one in Samoa and one in Timor-Leste. The female led PO in Samoa produces amazing cocoa and also has a small label selling direct to NZ. In addition, we are working with cocoa producers in PNG but at the moment, most of their produce goes to the European market where demand from consumers is higher.
So, the answer to the question “Does Fairtrade mean anything?” is: it’s complicated. It’s an improvement, but we can do better. We need a complete rethink of the system as the commodity price of chocolate is vastly lower than it should be.
We agree with Kate on this – it is complicated, and we can always do better but we are continually working internationally to address the price of cocoa and the way people in cocoa farming are treated. This is the latest work we have done in this area.
We also agree that food miles are important, and we support our Fairtrade farmers in the Pacific to develop relationships with suppliers in Australia and New Zealand. At the same time, we respect our licenses like Bennettos and their decision to produce their remarkable (Fairtrade) chocolate in Switzerland.
Fairtrade can feel like ‘charity chocolate’ – paying a bit more because it’s the right thing to do, rather than a price based on quality. There are plenty of craft brands that are far more ethical than some that have received the Fairtrade certification. Transparent information is often more trustworthy than the certification. Buying from chocolate companies that are smaller scale, local, and have direct trade models where farmers have more voice is the best way to go.
There are some great craft brands of chocolate who source straight from farmers and do good work in the ethical space but ultimately those brands only make a difference to the farmers they work with directly. And often the farmers who are able to make those international trade connections are not the ones that need the most support.
Fairtrade, on the other hand, works to change a system by making sure many farmers are paid fairly but also doing lots of work in areas like gender empowerment, governance, environmental sustainability and community development. The Premium projects that are funded are not chosen by us but instead the communities we work with, because we’re trying to address colonial imbalances in a comprehensive way. Oh, and we also do huge amounts of work together in increasing quality of products so that the price you pay for Fairtrade is a reflection on the quality, and not charity at all.
As for Tony’s Chocolonley, they’ve refuted the Barry Callebaut argument so many times that it’s got a permanent space on their website. Read why they chose to work with Barry Callebaut here . Obviously it’s a well thought out position (to another complicated issue) that we actively support.