Pay your cacao farmer well!

Cocoa beans from a Theobroma cacao tree

Cocoa beans from a Theobroma cacao tree

There is a troublesome trend in the farm world; small farmers are throwing in the towel and big farms are getting bigger.  Naturally, these massive operations have effects on the environment, food costs, human health, communities, and more.

This year we had an experience that made this trend personal.  To be honest, we’ve had an awful harvest when we didn’t expect it.   As a medium scale operation, the income that our harvests bring can be a critical element to our financial sustainability.    We want to do things right, and that costs money.

Last November when our “winter” harvest usually comes in we had a series of weather phenomenons that threw a big fat wrench into our cacao efforts.  Climate change for us, has felt very real this year.  In fact we estimate a 70% decrease in production when compared to last year.  Thankfully we have good clients and we’re diversified; for example we’ve been able to sell lumber and services to make up the difference, but what about the small farmer?  How does one who already lives marginally cope with these situations?  Does he/she give up to go work for the industrial farms?

Most Cocoa farmers, the majority of whom live in West Africa, live in poverty.  In Guatemala, where most of the cocoa is grown by cooperatives, the socio-economic situation is not bad, but its still marginal.

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For the poor farmer that eeks out an existence and is burdened with the risks of climate change and commodity prices, something has to change.  And part of that is to address the value chain and to recognize that we can pay our farmers a little bit more given all of the warmth and goodness that chocolate brings us.

Recently Izabal Agro-Forest conducted a market study for cocoa and found that a substantial increase in the commodity price for cocoa who would have almost no price effect on the consumer, which is crazy!  What the message here?: Let us pay our farmers more:

Andrew Miller (of IAF & Big Leaf) comments:

“Higher cocoa prices need not result in proportionally higher chocolate prices as cocoa represents just 5% of the retail price (see table below). Even if this percentage were to double to 10% in 2020, as projected by Euromonitor, chocolate prices could remain roughly flat.”

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Small to medium sized chocolate makers generally understand that quality and social sustainability are critical elements of supporting good quality cacao and its farmers.  We just need the industrial guys to catch on.

Pay your farmer well!

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2 thoughts on “Pay your cacao farmer well!

  1. body{font-family: Geneva,Arial,Helvetica,sans-serif;font-size:9pt;background-color: #ffffff;color: black;}body{font-family: Geneva,Arial,Helvetica,sans-serif;font-size:9pt;background-color: #ffffff;color: black;}Thank you Juan and Andrew for the interesting comments and statistics re. cacao return to producer.  By comparison- using high end Cabernet grapes- here in the Napa Valley- at $5,000 per ton,which yields about 600/ 750 ml. bottles  The average cost of a well made bottle of this wine here is about $35 retail.  5K divided by 600 is $8.33. So the price paid to the producer is ca. 24% of the total retail price.  This is the sort of return a producer of artisanal quality cacao beans deserves to be paid. The risk and difficulty affecting wine and cacao production are about the same.  The difference is that wine producers live just up the road from the winery,while cacao producers will probably not even live on the same continent as the chocolate makers they supply, making communication difficult and the need for  direct exchange even more important.Rick

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