Category Archives: Environment

Beyond Fair Trade premiums: Onam brings celebrations for farming families in Kerala

September brings the onset of Onam, the annual harvest festival, in Kerala, South India.IMG_2507

Small-holder farmers are celebrating this year. 4500 growers of cashew, coconut, coffee and spices amongst many crops, all very small scale (a couple of hectares), are collectively Fair Trade Alliance Kerala (FTAK). The alliance was formed in 2005, to address twin threats of farm debt and poverty both on the increase at that time and characterised in the extreme at times by the tragedy of farmer suicides.  Each year since then it gets stronger, a collaboration between farmers, promoters and consumers, defending the Kerala Development Model and using Fair Trade as a market tool to secure a strong sustainable business.

10666084_1489731467945805_4827038276676895373_nThe Onam celebration marks the annual distribution of price additional to the market. This year INR 11 million or $189,655 from cashew sales in to Fair Trade markets in Europe and USA.  Fairtrade premiums (certified by Fairtrade International) make up an additional INR 5 million.

This is the true inspiration. They are proud not just for the their own individual achievements as farming families managing the yearly risks but for that of the system as a whole and for all the cashew farmers of the region who have also indirectly benefitted from higher seasonal prices due to the associations strength and market share of the their supply chain. The security of a Fairtrade consumer market has added value to their crop and empowered many families.

Whilst you can read more about their Fairtrade story on the pages of the UK Fairtrade IMG_0296Foundation or on brands that sell their product such as Liberation CIC,  the wider farmer story is the one that goes on 365 days a year on their small homestead farms.

The glut of cashews collected at peak season gave power to processors who traded down prices well below cost of production as farmers became price takers. They had little choice and for some the stress was too much. Now with guaranteed contracts and pre-season finance flowing before harvest, FTAK and their supply chain partners can negotiate above market prices for the entire crop. Committed consumers are very happy to pay a small premium at retail to secure the deals.

Individual farmers in turn, trust the integrity of their Association and such is market share, local farm gate prices were estimated to be 30% higher at peak season. Now there are 40,000 small holder families farming cashews in the northern districts of Kerala producing between them around 30 million Kilograms of raw cashew nuts. The additional benefit the cashew farmers at large received because of the presence of FTAK intervening strategically in the market is about USD 0.30 per kg. This is an addition of nearly INR 450 million or USD 7.7 million in to the local economy this cashew season … just how much indirect benefit  is Fair Trade bringing!

Surely changing the paradigm like this is the true value and strength of Fair Trade when organisations leverage power beyond the personal bargaining of individuals to compete with businesses and bringing benefits to the many.IMG_2549

Empowerment has developed fast, their Fairtrade+3 policy is beginning to address the wider regional issues of biodiversity, gender equality and food security.  Also, having learnt that most value is accrued by businesses ahead of them in the chain, the farmers and their supporters now have confidence to launch their own brand into the BxT1NCyCMAAE_55Indian market, spearheaded by high quality organic coconut oil. What a fantastic example to farmers everywhere!

 

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Tim Tams and Palm oil: Don’t forget child labour

Even in Australia, where rabbits are vermin and fair game for the gun, Easter is celebrated with purchase of chocolate bunnies. This Easter, when Australians double their weekly chocolate purchases, a campaign focused on unsustainable palm oil has hit ethical consumers on social media . It aims to educate consumers with tools to buy wisely, highlighting the impact that forest clearance for palm oil plantations has had on the endangered Orang-utan. This palm oil is an essential component of many chocolate products, the problem is consumers cannot identify it on the label where it is often called ‘vegetable oil’.

Of course it’s not just buying Easter bunnies and eggs. Daily Facebook posts highlight good and bad examples of many other products which do and do not follow sustainable or certified practice, covering every conceivable processed or manufactured food product and cosmetic or household product. Indeed coming soon is an App which will allow shoppers to scan barcodes during the trolley dash.

timtamsEven family favourite, the iconic Tim Tam chocolate covered biscuit, is a key target, one which contains unsustainable palm oil.

 

Facebook comments reveal real consumer willingness to get behind proactive choice and education too, showing that just as Fairtrade or Organic choices in Europe have added value and social meaning to basic farming commodities; an environmental choice can do so in Australia too.

But Tim Tams are covered in chocolate and as much as orang-utans are a beautiful orange colour, have ageless wise faces and rain forests are needed to convert carbon dioxide back into the oxygen we breathe, chocolate is also synonymous with Child Labour. This campaign is therefore an opportunity to uncover a human dimension of your chocolate bar and the farmers that grew the cocoa beans.

 

Sustainable or certified palm oil?

Whilst I had a pretty good background on the people side , I checked up on the palm oil. You can read the campaign sites above, but I also found a reliable study and it will tell you everything you ever wanted to know about labour conditions on palm oil farms.

http://www.schusterinstituteinvestigations.org/#!palm-oil-controversies-forced-labor-child-labo. r/c1xrj

It also tells you more clearly than I can what the difference is between Responsibly Sourced Palm Oil (RSPO) i.e. ‘we don’t want to be boycotted or legislated against’ and the preferable Certified Sustainable Palm Oil (CSPO) i.e. ‘we had to change the way we did business and be inspected against ILO standards by an independent agency’

Find out how parts of the industry responded positively to consumer pressure and shareholder questioning of reputation.

http://www.schusterinstituteinvestigations.org/#!palm-oil-industry-response/cgm5

 

Whilst it is great to see US pension funds threatening to divest can you imagine Australian Funds doing the same under this political climate? There are choices. Try asking Australian Ethical about their policy if you want to ensure your pension is disinvested from this dirty industry without compromising it’s value.

Clearly consumer leverage is strongest if demand is for certified product so I am looking for those.

 

From Cocoa to Chocolate

So what is the chocolate story? Our favourite luxury is made from cocoa beans grown on small family farms. I worked with a large Fairtrade certified cooperative in Ghana, home to some of the world’s best cocoa, to working with farmers to improve their business.

IMG_168670% of the world’s cocoa is grown on farms of a few hectares in Cote de Ivoire and Ghana in West Africa. As with many crops most of the labour is provided by women. Unless organised around associations, household value remains low which is another factor leading to widespread use of migrant and child labour.

IMG_1727The open pods reveal creamy mucilaginous beans which are fermented and dried on the farms. Intermediaries collect from the farms bulking up until it ends in the hands of the global giants like ADM and Cargill (yes they of wheat and soya). Like all commodities, global traders manage prices by a complex series of forward pricing and hedges with the chocolate brand often locked into prices and manufacturing contracts far ahead.

The best quality cocoa comes from Ghana and it is often used to provide a good quality consistent flavour. Other more individual beans from diverse sources from Madagascar to Peru and Venezuela find their way into speciality or single origin bars. Milk chocolate is rarely more than 20% cocoa and is often (especially in hot countries like Australia) mixed with Vegetable fat to keep it hard under higher temperatures. The darker the chocolate the higher and purer the cocoa content is likely to be.

Whilst much Australian chocolate is made by global brands like Cadbury (now owned by Kraft) they still source from West Africa and blend with cheaper cocoa from Indonesia where plantations have taken hold in recent years with emergence of strong Asian markets. Smaller Australian companies like Whittakers , also source their quality from Ghana.

Why should I care about chocolate products? A BBC Documentary in 1998 revealed that despite global International Labour Organisation (ILO) laws, child slavery was still found on cocoa farms in West Africa. It accused the chocolate brands Hershey, Cadbury, Nestle and Mars of complicity. Successive attempts to legislate in the US have largely failed.

Since then others the spot light has remained on yet still a 2011 study by Tulane University in the USA showed that children are still trafficked. It found that 1.8 million children in the Ivory Coast and Ghana work in the cocoa industry and that the vast majority of them are unpaid. The study also found evidence of child-trafficking, forced labour and other violations of internationally accepted labour practices.

 

Fairtrade

Fairtrade has responded to these challenges and some farmer cooperatives are actively working to eliminate the problem. Whilst this is a slow process requiring continual education and empowerment at farm level, Fairtrade offers a market based framework of sustainable livelihood development within which this can happen.

IMG_1733Annual audits by third party inspection can lead to loss of certification income benefits such as higher prices and premiums.

Fairtrade Australia is promoting certified chocolate eggs this Easter. The global Fairtrade standards are defined by Fairtrade International, partially owned by small farmer organisations and workers.

Products (not companies) are certified against these standards which prohibit the worst forms of child labour. Farmer organisations receive a market price backed by a cost of production minimum to ensure sustainable production. This floor price acts to protect the farmers if the market goes into oversupply. A social premium supports projects or organisational development of their business.

images[9]Even better, if you want to go a step further, find out more about the pioneer 100% Fair trade companies that developed the first products, read about farmer owned brands such as Divine Chocolate. Co-owner, Ghanaian cocoa grower cooperative Kuapa Kokoo has a website too. Divine brand products are available in Australia via Heart of Chocolate

 

‘Every Little Helps’.

If the saying was true for British Supermarket giant Tesco, it is even truer for small-scale cocoa farmers and their communities, the orang-utans and the forests they live in and of course we need to clean the atmosphere of carbon dioxide too.

Ask for #Fairtrade certified chocolate products off the campaign list for sustainably sourced and certified palm oil.