QUARTERLY RETURN 113 AUTUMN 2019

PAYING THE PRICE FOR COCOA

A SWAHILI SHARING SPIRIT Swahili Imports works with artisans in 15 African countries.

A BIG THANK YOU To our volunteers who helped us out at festivals this Summer.

SATIPO & ASUNAFO Read the story behind your chocolate bar. ONLINE PORTAL THE IMPORTANCE OF While we are aware that many of you still prefer INCREASING paper communication, we are conscious of its environmental impact. For this reason, we INVESTMENT encourage people to manage their Share Account online if they can. As a result, over a third of As Shared Interest Society reaches 10,000 members are registered to use our online portal, Share Accounts, our organisation’s growth ‘Our Shared Interest.’ can be a source of pride in work well done. It ensures that our reach is greater as we By signing up online, you can view your latest and increase our assets and so our potential to previous statements, change selected personal influence events around the world. details, as well as investing further and making withdrawals. For security purposes, all online withdrawals will be made into your nominated Like most of us, I am not an economist bank account. If your Share Account has more by training, so my grasp of the practical than one signatory, any transactional requests workings of forces of supply and demand will need to be approved by all parties before is hazy. However, what struck me clearly being actioned. in my first meeting as a new Council YOU CAN NOW INVEST member this Summer, was the frustration Instead of receiving your quarterly statement and that exists when the organisation does not WELCOME newsletter in the post, you will receive an email have enough money to satisfy need. A new from us with a link to the portal, where everything IN US DOLLARS concept was put before me – that of the will be available to view online. Of course, you can AND EUROS ‘pipeline’ of financial support; at present, opt to take online access and continue to receive loan requests from overseas are unable to your mailing by post. Please specify that you wish be fulfilled because of inadequate sources to do this when signing up. of capital here. Demand for our lending Welcome to your Autumn Quarterly Return. I am is often oversubscribed, as applications delighted to announce that thanks to your continued Our membership team can register you for this outstrip the ability to supply capital. support and commitment, we hit two major milestones online service over the telephone. Please call us We are pleased to inform you that the Rule changes, on 0191 233 9102 and we will take you through It is good to see that our early 2019 Rule in August this year. As we edge closer to our 30th year, some security questions before getting you approved by members at the March AGM, have been changes mean flexibility in the currencies I am proud to tell you we now have over 10,000 Share started. Alternatively, you can send us an email registered by the Financial Conduct Authority (FCA) and in which people can invest (with US Dollars Accounts open and £43m of Share Capital. This is a at [email protected] with your are now incorporated into our Terms and Conditions. and Euros now acceptable) and that the contact number and the best time to get in touch, fantastic achievement, and means that over 400 age at which young people can open and we will call you. The revised Rules now: producer groups across 63 countries can continue accounts has come down. These alone to benefit from our financial support. • Enable the Society to accept investment in US Dollars and Euros will not clear the blockage in the pipeline (as well as Sterling). As 93% of the payments we make to producers however – more liquidity still is needed to As the nights grow longer, it seems timely to feature a product behind and buyers are in currencies other than GBP, fluctuations in exchange ensure we have sufficient funds to lend. one of our favourite comfort foods. After all, it is the fruit of the cocoa rates have a significant impact on the funds we have available to tree, or Theobroma cacao, which provides us with the crucial ingredient THANK YOU lend. If we raise investment in US Dollars and Euros, we will reduce The biggest potential for de-blocking the for hot chocolate, as well as the growing range of ethically sourced the cost of borrowing and lessen the need to pass on US Federal pipeline lies instead with current investors chocolate products on our retailers’ shelves. putting more funds into their own accounts Thanks to the support of our volunteers, we were Reserve increases to producers. when feasible, or getting friends and family Over 20% of Shared Interest lending facilities supports cocoa, and in able to have a presence at two new events this • The total investment per member remains £100,000, but this to open accounts, so that sums available this edition we bring you stories from farmers in West Africa and South Summer. In July, we attended Just V Show in can now be split across three currencies. Members who wish for investment increase. We continue to America, facing challenges brought about by climate change, and London, which is aimed at people interested in to invest in US Dollars or Euros should contact Kerrey Baker, be the only social lender willing to finance a volatile international market. a vegetarian or vegan lifestyle. Five volunteers joined two members of staff over the course of the Head of Member Engagement, on 0191 233 9116 or email almost three-quarters of smaller, more On pages 4 and 5, you can read about Swahili Imports, an organisation three-day event. Our Volunteer and Engagement [email protected] vulnerable groups and co-operatives in that empowers female artisans to create their handmade products Manager, Sally Seddon, carried out an interview our Latin America and Sub-Saharan Africa • Allow minors to be members of the Society in their own right, but within rural communities, and sell them in an international marketplace. slot on the main stage with Liberation Nuts. Over portfolio. As members, we all have our the August bank holiday weekend, Sally joined 20 must have one parent or guardian as a second signatory on the small part to play in assisting the Society Also included in this issue is an update on our Society Rules, after volunteers at Greenbelt Festival, which describes Share Account until they reach the age of 16. get closer to its goal. members voted in favour of proposed changes detailed in your January itself as a ‘festival of artistry, activism and belief.’ • Enable groups or organisations holding Share Accounts to authorise mailing, and at our AGM. Further information can be found on the page Stephen Thomas withdrawal requests, with a minimum two signatories rather than all opposite and on our website. We received a fantastic response at both events, Member of Council and feedback from our stallholders was also signatories noted on the Share Account. We hope you enjoy reading this edition of QR. positive, with one volunteer saying: “I really enjoyed my stint on the stand. It was very • Provide for a Council of eight members (mirroring the usual Until next time, interesting to meet people and talk to them about size of the Board), being four randomly chosen and four Shared Interest, and very rewarding to find that non-randomly chosen members. Council previously comprised many of them seemed enthusiastic about it. of nine members. I also feel I learned a lot more about Shared Patricia Alexander (MD) Interest myself.” The revised Terms and Conditions are available on our website. If you would like a full copy, or would like to discuss any of the changes, If you would like to volunteer at one of please get in touch with the membership team on 0191 233 9102 or our events, please get in touch with Sally on email [email protected] [email protected]

Front cover image: Marith Tuanama is a cocoa producer with Acopagro co-operative in Juanjui, Peru. 2 QUARTERLY RETURN 113 AUTUMN 2019 SHARED-INTEREST.COM 3 Swahili basket weaver in Senegal.

Leslie had previously lived in Kenyan capital Nairobi, and fell in love with the East African crafts sold at its vibrant city markets. This gave her the inspiration to begin the company name with ‘Swahili’, after the people whose artistry is at its core. She subsequently returned home to Oregan with a handful of handwoven, traditional tote bags called sisal kiondos and so began the start of a blossoming relationship between talented artisans and a forward-thinking social entrepreneur.

In 2011, Swahili Imports approached Shared Interest as their I\ZPULZZ^HZL_WHUKPUNX\PJRS`HUK[OL`ULLKLKÄUHUJL[V meet this growth. Since then, the organisation has widened its export partnership network from one group of weavers in Kenya, to artisans in nations across Africa, working primarily with women in remote communities.

Leslie says: “Crafting handmade products provides a particularly vital employment option for rural African women. The backbone of the family, they cook, clean, garden, care for the extended family and often shoulder the burden of paying school fees. Swahili basket weaver in Senegal.

“Creating products from home around daily responsibilities empowers rural women as earners, while working together on CASE STUDY: orders brings communities together and highlights the power of teamwork.” BASKETS OF Now based back in Oregan, Leslie frequently returns to Africa to meet new artists and introduce fresh design concepts to those SENEGAL living in rural communities. Subsequently, Swahili Imports now works with people in 15 African countries.

Leslie adds: “We feel that by following the Fair Trade Principles, In 2007, Leslie was invited to join several other ^LVɈLYV\YWHY[ULYZHJYVZZ(MYPJH[OLTLHUZ[VI\PSKZ[YVUNLY US buyers on a tour of Senegal, a nation Swahili homes and communities by their own design. Each of Africa’s 54 Imports had not yet visited. UH[PVUZVɈLYZH\UPX\LHYYH`VMILH\[PM\SJYHM[PUN[YHKP[PVUZZV Leslie spent a week in and around Senegal’s we’re always excited to begin working in a new country.” capital city, Dakar, visiting craft markets and artisan groups. However, one item hooked her: With the majority of sales made to the wholesale market, the beautiful Wolof laundry hampers and baskets organisation also sells directly to consumers from their retail website, woven from locally sourced cattail stalks (a tall and Oregan and Las Vegas stores. To complement their handcraft marsh plant). range, they recently began selling Justea, a Fairtrade organic tea, alongside a range of sauces and spices named Ukuva iAfrica, which Before leaving Senegal, Leslie placed an order combined, make up 10% of their product mix. of over 1500 hampers, table baskets, and trivets ^V]LUI`^VTLUPUZP_KPɈLYLU[]PSSHNLZ In many rural villages, the men of the family work in major cities, or abroad, to earn money for the family. Often, this income alone is not enough “We are dedicated to African to fully meet the family’s needs. Subsequently, artisans. Their skill, Wolof women weave baskets, and sell them to pay for food, clothing, and education. They take determination and sharing great pride in using traditional skills to support A SWAHILI spirit form the backbone of their family in this way.

the company’s operations.” Leslie said: “After 17 years of work in Africa, our main indicators of success are the welcoming ZTPSLZVMWYVK\JLYZHISL[VHɈVYKOLHS[OJHYLMVY Leslie Mittelberg SHARING SPIRIT their families, secure all their children an education

and buy their own homes and farms.” To read more about Swahili Imports, visit Founded over two decades ago in Oregon by Leslie Mittelberg, www.swahilimodern.com Swahili Imports – trading as Swahili African Modern – partners with Leslie continues: “Because we handle the intricacies and African artisans to sell their fair trade goods in stores around the world. complications of moving products across oceans, artisans can focus on their creative work.”

4 QUARTERLY RETURN 113 AUTUMN 2019 SHARED-INTEREST.COM 5 Cocoa in West Africa.

If you bite into a bar of chocolate today, it is highly likely that the cocoa beans used to make it were grown in West Africa. This is because over two-thirds of chocolate consumed worldwide includes beans from this region.

However, far from being a lucrative increased market price has proved to Global campaigning organisation, Mighty choice of livelihood, cocoa farmers have an impact on public consumption in Earth, conducted an in-depth global remain at the mercy of an industry that the past, there may be consequences for investigation into the link between cocoa has an eye on price, and is a slave to farmers in the longer term. For example, and deforestation, and concluded that margin. Coupled with this, cocoa prices in 2015, cocoa consumption slumped ‘without action, Ghana stands to lose have slumped by 30% to hit a ten-year after the market price rose to 3,000 US all remaining forests outside its national low, leaving many farmers existing on far Dollars per tonne. Sadly, it seems like a parks in the next decade…. In Côte less than the living wage. no-win situation for cocoa producers who d’Ivoire, only 200-400 elephants remain currently only receive about 6% of the from an original population of hundreds The Fairtrade Foundation launched value of the global chocolate industry. of thousands.’ a new campaign on the theme of the living wage to coincide with this year’s The Ghana Cocoa Board (Cocobod) We spoke with Traore Sinan, the Fairtrade Fortnight. They state that HUK*[LK»0]VPYL»Z*VɈLLHUK*VJVH Chairperson of CAYAT, which is in Ghana and Côte d’Ivoire, a typical Council joined forces and announced one of our largest cocoa producers farmer, working outside fair trade, lives their minimum price for cocoa this in Côte d’Ivoire. We asked about on around 75p per day. That is below Summer. The move comes two years the environmental challenges of the World Bank’s extreme poverty line of after both regions agreed to set up a their work. The co-operative holds about £1.40 per day. joint industry body called Ghana-Côte yearly environmental training for d’Ivoire Sustainable Cocoa Initiative their members, focused on climate -HJPUNHUV[OLY`LHYVMÄUHUJPHS to tackle issues such as pricing and change adaptation and mitigation. hardship, government bodies in Côte cross-border smuggling. Originally Traore explained that there are several d’Ivoire and Ghana threatened to stop viewed as rivals by the cocoa industry, JSHZZPÄLKMVYLZ[ZPU[OLPYYLNPVUHUK their cocoa supply, should they not the countries now work together to CAYAT is working in partnership with achieve a minimum price of 2,600 US JYLH[LHSHYNLYPUÅ\LUJLVU^VYSK the Ministry of Water and Forests to Dollars per tonne. Following a number cocoa prices. Only time will tell if this preserve these areas. of negotiations, the two governments latest move is sustainable. However, ZL[[SLKMVYHÄ_LKWYPJLWYLTP\TVM as detailed in the most recent As consumers increasingly choose US Dollars above the predetermined Fairtrade Foundation Annual Report, groceries produced with a conscience, Cocoa Futures contract price. The world ‘strengthening producer organisations there is some hope that positive changes benchmark for the global cocoa market, in West Africa continues to be a lie ahead. [OPZWYPJLÅ\J[\H[LZVUHKHPS`IHZPZ major focus.’ However, farmers growing Fairtrade cocoa will continue to be protected by Unfortunately, an even more serious the Fairtrade International Minimum Price implication has arisen from the global of 2,400 US Dollars per metric tonne, chocolate industry. As people living in Over the past five years, so will never receive less than this at the West Africa have very little choice of point of export. commodities to sell, deforestation is sales of ethical food taking place on a grand scale as some and drink have shot up According to John Dossou, our Lending farmers turn to illegal production to Manager for West Africa, there is still a ILULÄ[MYVTJVJVH»ZNYV^PUNKLTHUK by 43%. great deal of uncertainty for farmers. He The spread of unlawful plantations has said: “Most of our producers in Ghana and caused devastation as farmers move into Côte d’Ivoire have welcomed the good national parks and protected areas to (source: Mintel, May 2019.) UL^Z;OL`OVWL[OH[[OLÄ_LKWYLTP\T grow their crop. will be used to address the issues in cocoa farming communities in the region. Consequently, there is growing pressure on PAYING THE However, some of them are sceptical chocolate brands to be more transparent about how much of the increase is actually about their supply chain. As The Fairtrade In fact, this year 100% Fairtrade brand, NVPUN[VHɈLJ[[OLWYVK\JLYWYPJL¹ Foundation state in their aforementioned Divine Chocolate announced its highest – COCOA report: “Both Aldi and Lidl have agreed with ever sales; proof that chocolate lovers PRICE It is expected that consumers may us to increase the use of Fairtrade cocoa in are gradually becoming more concerned absorb the increase in price as opposed their confectionary lines.” with the social impact of the cocoa to the large multinationals, with supply chain. IN AFRICA predictions of a chocolate bar price rise as products hit the shelves. As the

6 QUARTERLY RETURN 113 AUTUMN 2019 SHARED-INTEREST.COM 7 Cocoa in West Africa.

CASE STUDY:

ASUNAFO Asunafo producer in Ghana. (Z\UHMV»ZUL^VɉJLJVTWSL_^OPJO^HZI\PS[PU 

Asunafo is a fast-growing Ghanaian cocoa producer, ILNHUWYV]PKPUNÄUHUJL[V(Z\UHMV Despite their reduction in Premium, the COCOA GROWN despite many of the challenges faced by economic almost two years ago, when the VYNHUPZH[PVUOHZPU[YVK\JLKZL]LYHSZ[HɈ President of their Union asked for wellbeing initiatives. These include an BY and environmental factors. They registered as a a loan to support their agro-input VɉJLL_WHUZPVU[VOV\ZLHKPZWLUZHY` ASUNAFO co-operative in 2011 with just over a thousand farmers. business, which is expanding quickly. for the health needs of workers and a ;OL-HPY[YHKL6ɉJLY^OVWYV]PKLKH Z[VYLYVVTMVYMHYTLYZ^OVOH]LKP]LYZPÄLK FARMERS reference, described Asunafo as one of into soap making. Since then, they have grown to a Asunafo is often under pressure to meet the largest and best-organised membership of more than 6,500, deadlines for shipping. To help with co-operatives in Ghana. John continued: “This is the result of Asunafo farmers harvest 100% Forastero over half of which are women. Farmers this uncertainty, Asunafo has looked for Asunafo training 25 women in liquid and sell their dried beans in bulk to a local KP]LYZPÄJH[PVUVWWVY[\UP[PLZMVYMHYTLYZ “However, Asunafo faces many solid soap making, using leftover cocoa cocoa, which is thought to be native to the buyer licensed and accredited by a Along with exploring the growth of challenges. As one of the biggest elements and shea butter. The soap is Amazon basin. government-led body called Cocobod. KPɈLYLU[JYVWZ[OLJVVWLYH[P]L cocoa bean suppliers to Mondelez, currently sold at the local market but plans created a second income stream by they replaced their Fairtrade contract are to expand this out to exhibitions to At the beginning of each season, selling farming products. They came to for one with Cocoa Life. Up until this seek a better price. Some members have The most commonly grown type of cocoa, Cocobod sets the price for cocoa :OHYLK0U[LYLZ[MVYÄUHUJL[VZ\WWVY[ point, they were able to undertake HSZVKP]LYZPÄLKPU[VJVJVU\[[VZLSSK\YPUN Forastero, now accounts for 80% of the world’s ILHUZZV[OH[MHYTLYZJHUILULÄ[MYVT this side of their business. community projects using the the rainy season. Asunafo distributed the cocoa supply. What makes it so popular is a consistent income. The co-operative Fairtrade Premium, which was 200 seedlings to farmers, who will expect to that it is high-yielding, much hardier and less is based in one of the few African Thanks to Shared Interest investors, US Dollars per metric tonne of cocoa ZLL[OLPYÄYZ[`PLSKPU¹ susceptible to diseases. Forastero cocoa has countries that has its cocoa price Asunafo can now purchase and provide ZVSK

8 QUARTERLY RETURN 113 AUTUMN 2019 SHARED-INTEREST.COM 9 ACOPAGRO cocoa co-operative based in the San Martin region of Peru. CASE STUDY: SATIPO

Established over 50 years ago, JOHSSLUNPUNJVUKP[PVUZMVYJVɈLL Satipo is a Peruvian co-operative farmers as they currently face low with farmers producing Fairtrade international prices, Satipo has seen coffee and cocoa. member numbers almost treble in two years, from 100 to 270. Cocoa can be grown and shipped HSS`LHYYV\UKHZVWWVZLK[VJVɈLL General Manager, Edison Chavez, which has a harvest season of has been with Satipo for six years and March to August and export June has seen the co-operative go through *VɈLL[YLLZPU3H[PU(TLYPJHWYVK\JL to December. This means that the many changes. He said: “We now JVɈLLJOLYYPLZ^OPJO[\YUIYPNO[YLK co-operative has an alternative have a positive business rapport with when they are ripe. source of income during Spring and [^VPU[LYUH[PVUHSI\`LYZMVYV\YJVɈLL Summer months, and cocoa makes and cocoa, after a poor performance up just under 20% of their business. in the 2016 harvest, where the crop QUALITY, NOT Each year, most of the crop is sold MHPSLK[VM\SÄSVYKLYZ-HYTLYZHYLHSZV for export to a Swiss company. happy as they are paid a higher price than if they were to sell locally. – COCOA The co-operative approached QUANTITY Shared Interest for help in ¸(S[OV\NO[OL[OYLL[`WLZVMJVɈLL WYLÄUHUJPUN[OLPYJVJVHHUKJVɈLL ^LNYV^HYLH[YPZRMYVT[OLJVɈLL IN LATIN AMERICA contracts. This means they are able leaf rust disease known as Roya, to pay their farmers at harvest time, it has not been a major issue since instead of waiting for their goods 2013. The year I joined Satipo, we to be sold. With their Fairtrade were badly hit but thankfully things Premium, they have been able to have improved since then. The main buy organic compost for their crop. challenges facing the co-operative now and in the coming years are Satipo is driven by social impact, supplies 80% of the global production helping farmers understand and Legend has it that chocolate originates from Mexico, where and has carried out a number of of speciality cocoa (source: CAF, comply with organic standards, as the Aztec emperor, Montezuma II relied on a daily dose to projects in the Peruvian Central Development Bank of Latin America). well as generational replacement. This Jungle, including reforestation, farm give him energy. It is thought that he enjoyed it as a bitter According to the International Cocoa is due to current farmers retiring from renovations, and implementation Organisation, 75% of cocoa exported the role and an increasing number drink, influenced by his Mayan neighbours. of water treatment systems with of young people moving out of rural MYVT7LY\PZÄULÅH]V\YJVJVHILHUZ0U the support of local and overseas fact, cocoa is the second most important HYLHZ[VÄUK^VYR¹ organisations. Despite the However, according to a report published years, stating: ‘All that Latin America HNYPJ\S[\YHSWYVK\J[HM[LYJVɈLLPU last year by Nature, Ecology and cocoa lacks is scale, but where it lacks in terms of people involved; it thus has Evolution (source: www.nature.com), yield, it excels in new hi-tech production HZPNUPÄJHU[ZVJPVLJVUVTPJPTWHJ[ evidence shows that the most diverse methods and a relatively young and Last year, 62% of Shared Interest’s total variance of cocoa is found in the upper vibrant workforce.’ If this is true, it WH`TLU[Z^LYLTHKL[VZ\WWVY[JVɈLL Amazon region of South America, leading means that cocoa production will go full and cocoa production, and lending researchers to believe this is its true place cycle to return to the place from which facilities to cocoa organisations Once picked, the fruit of the cherry is of origin. it originates. reached 21%. ARABICA COFFEE TYPES GROWN removed to reveal the actual bean. In an article by Confectionary News (*full In South America, Shared Interest According to Esperanza Dionisio, General ZV\YJLKL[HPSLKILSV^ÄN\YLZW\ISPZOLK works with 14 producer groups that Manager of CAC (Cooperativa Agraria BY SATIPO FARMERS in August 2018 for the Cocoa Global trade cocoa. Paul Sablich, Regional Cafetalera) Pangoa located in Peru, there Production Balance, show that Africa Manager for Latin America, comments: are various threats for the cocoa sourced produces 76% of the world’s cocoa, ¸>LWYV]PKLÄUHUJLMVYH^PKL]HYPL[`VM from this region. She says: “The quality of Catuai It is thought to originate from Ethiopia with 17% being grown in the Americas. co-operative sizes. Some of them have our cocoa is based upon its native origin. As we explain in our feature on page 6, recently started trading internationally, as early as the 1930s, which would However, there are initiatives to plant A small plant with high-yielding power. the majority of cocoa used in today’s while others have longer experience.” explain the name as it grew in a region clone varieties of cocoa that can have The compact nature of Catuai allows chocolate is derived from the West where a mountain is most commonly higher yields, but where the quality is it to be planted closely together, African areas of Ghana and Côte d’Ivoire. What makes South American cocoa translated in English as Gesha. low. Thus, we promote growing Peruvian doubling the harvest potential. However, the article goes on to predict stand apart from the rest is the quality. Chocolate connoisseurs will often talk of native organic cocoa to our farmers, and Caturra that the South American cocoa industry Geisha the original taste of Peruvian chocolate that is what our international buyers and will grow dramatically over the next ten This plant is related to the in particular, and the region actually chocolatiers seek.” A tall plant with either green or bronze better-known red Bourbon, tips. This plant has exceptionally high displaying the same type of leaves *Source: Spotlight on South America from the World Cocoa Foundation Conference, looking at what Latin America has to offer in terms of cocoa quality when grown at high altitudes. production, quality, sustainability and diversity, confectionerynews.com/article/2018/10/23/spotlight-on-cocoa-production-in-latin-america and fruit, both red and yellow.

10 QUARTERLY RETURN 113 AUTUMN 2019 SHARED-INTEREST.COM 11 Quarterly Return is the newsletter of Shared Interest Society. Shared Interest Society Ltd is a fair trade lending organisation, which is a member of Co-operatives UK. It uses the pooled investments of its members in the UK to make real and lasting improvements to people’s lives in the developing world.

Shared Interest Society Ltd is registered with the Registrar of Mutual Societies, number 27093R. The Directors decide on what the interest rate payable to members will be. The interest rate since 1 November 2018 has been 0.25%.

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Back cover image: shared_interest Sun-dried cocoa beans at ACOPAGRO processing plant in Juanjui, Peru. @SharedInterest

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