monitoring the scope and benefits of fairtrade: coCOA Monitoring Report 10th Edition FAIRTRADE COCOA Monitoring Report 10th Edition 2 Copyright Fairtrade International 2019 Disclaimer All rights reserved. None of the material provided in this The monitoring data in this report are based on data collected publication may be used, reproduced, or transmitted, in by FLOCERT, and reported in some cases by producer whole or in part, in any form or by any means, electronic or organizations through the audit process and in other cases mechanical, including photocopying, recording or the use by other supply chain actors. Fairtrade International is not of any information storage and retrieval system, without responsible for the accuracy of the data. The report has been permission in writing from Fairtrade International. compiled to the best of our knowledge and is provided for About Fairtrade International informational purposes only. 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Fairtrade International develops and maintains the internationally-agreed Fairtrade Standards, owns the FAIRTRADE Mark, and supports the international Fairtrade Editorial and Data team: Harveen Kour, Verónica Pérez system. Three regional Fairtrade producer networks Sueiro, Jon Walker, Emily deRiel, Gerrit Walter, Daniel Castro, representing 1.6 million farmers and workers co-own the Miyako Takahashi, and Luis Pastor international Fairtrade system, which also includes the independent certification body FLOCERT, and Fairtrade Design/layout: Alberto Martínez, Renderparty Cover Photo: organizations in more than 30 countries that promote 35-year-old Margarite Lalutu (centre) is a member of Fairtrade to business and consumers. Proofreading: Laura O’Mahony ECOOKIM, a union of seven primary cooperatives located in rural communities across four regions of Côte d’Ivoire. For more information, visit www.fairtrade.net © TransFair e.V. [email protected] About FLOCERT FLOCERT is a global certification body offering verification and supply chain services to ensure social and environmental standards. Founded in 2003 as the single certifier for Fairtrade, the company has six international offices, 125 employees and more than 120 auditors worldwide. For more information, visit www.flocert.net FAIRTRADE COCOA Monitoring Report 10th Edition 3 263 cocoa 86% ofall 38 million in producer organizations fairtrade cocoa fairtrade representing farmers are in premium west africa earned by cocoa producers 263,825 in 2017 farmers in 21 countries Sales volumes 45 of fairtade premium for Fairtrade cocoa invested as payments to members surged by and in the provision of 57 agricultural tools and inputs FAIRTRADE COCOA Monitoring Report 10th Edition 4 1. key data: fairtrade cocoa Cocoa in context In 2017, cocoa was the fastest-growing Fairtrade product category with sales jumping by an impressive 57 percent in volume to more than 214,000 metric tonnes (MT). Growth rocer orgniations continued in 2018, with a 21 percent increase in volumes sold ↑ ne 1 (to 260,628 MT) and €44 million in Fairtrade Premium paid to certified cocoa producers. farmers However, the situation for cocoa growers, especially in West Africa, continues to be very challenging. Cocoa farmers ↑ 1 ne 1 struggle to make a living despite being the source of a highly- prized commodity. Widespread poverty, deforestation, gender inequality and child labour are persistent problems in the 1, hectres cocoa sector and pose a major threat to its sustainability. ↑ ne 1 Fairtrade is changing the cocoa business for the better in a number of ways. Our top priorities are helping cocoa farming communities to fight poverty – a root cause of problems o coco proce b Firtre procer such as child labour – and empowering women farmers as business owners and leaders in their cooperatives. We do this orgniations by strengthening the capacities of Fairtrade cooperatives and ↑ ne 1 their farmer members, by promoting and acting on the issue of sustainable pricing, and by designing interventions to tackle 2 o coco so s Firtre the sector’s challenges. ↑ ne 1 €38,015, remim erne ↑ ne 1 Notes: Data from 2017. Numbers above 10,000 are rounded to the nearest hundred. Metric tonnes abbreviated to MT. FAIRTRADE COCOA Monitoring Report 10th Edition 5 2. fairtrade cocoa sales volumes and premium earned 2015-2017 Strengthening cooperatives: The West Africa Cocoa Programme In mid-2016, Fairtrade Africa launched the West Africa Cocoa Fairtrade cocoa olumes sold MT Fairtrade Premium receied Programme (WACP) aimed at empowering and strengthening Fairtrade certified cocoa cooperatives in Ghana and Côte 220,000MT 260,628MT €40,000,000 €44,384,300 d’Ivoire. One of the WACP’s priorities is to build up the 1 1 capacities of the cooperatives so that they become both 200,000MT €35,000,000 more professional and capable of investing their Fairtrade Premium strategically. The project aims to develop strong, 1 viable co-ops that are responsive to their members’ and €30,000,000 1 business partners’ needs enabling access to key markets. A crucial element of the WACP is helping over 200 cooperatives 1 11 €25,000,000 €24,688,000 to understand and adhere to the Fairtrade Standards, and thus improve the sustainability of their operations. 1 €20,000,000 1 1 1 The WACP also provides strategic support to a selected group of co-ops to strengthen their organizational 80,000MT 1 management. The cooperatives receive guidance on creating three-year Fairtrade Development Plans that document their 60,000MT 1 intended Fairtrade Premium spending based on their own identified needs. In line with the Standards, these plans 40,000MT are then voted upon at each cooperative’s annual General €5,000,000 20,000MT Assembly. Strategic use of the Premium enables co-ops to gain skills in certain areas (such as financial management 0 0 or implementing Internal Management Systems), respond 1 1 1 1 1 1 1 1 better to the demands of their members and the market, and improve the living conditions of their members (see the case study of SACANDI cooperative on p. 14). The needs Note: are usually identified through self-assessments, Fairtrade’s monitoring systems or identified external trends that the Data rounded to the nearest hundred. cooperative wants to address. The Fairtrade producer network for Latin America and the Caribbean, CLAC, also devises strategic interventions to strengthen the capacities of cocoa cooperatives in their region, particularly focused on improving overall productivity and quality (see case study from CONACADO on p. 15). FAIRTRADE COCOA Monitoring Report 10th Edition 6 3. number of fairtrade certified cocoa Fairtrade’s work to highlight the producer organizations 2013-2017 issue of sustainable prices In the wake of the collapse in cocoa market prices at the end of 2016, which still have not fully recovered, Fairtrade has taken a leading role in calling for more sustainable prices to be paid to cocoa farmers. This is part of a holistic solution to enable farmers to earn a living income, which in turn supports 300 responsible and sustainable cocoa farming practices. We have developed Living Income Reference Prices for Ghana 263 and Côte d’Ivoire as benchmarks, which some leading 250 sustainable chocolate brands have chosen to pay. Local Fairtrade organizations in the global north, for instance Belgium and the UK, have run powerful consumer-facing campaigns to raise awareness about the challenges facing 200 1 cocoa farmers. In addition to advocacy, we have also strengthened our own 1 interventions. Following an extensive global consultation 1 1 1 process, we announced in December 2018 that, as of October 1st 2019, the mandatory Fairtrade Minimum Price 1 for conventional cocoa would increase by 20 percent to US$2,400 per metric tonne, with additional increases for organic cocoa. The Fairtrade Premium for cocoa farmers and their cooperatives has also increased by 20 percent to 50 US$240 per metric tonne. Fairtrade is the only scheme with a fixed Premium that must be paid directly to the cooperative with no deductions by any other supply chain actor. 0 Since then, in July 2019, the governments of Ghana and 1 1 1 1 1 Côte d’Ivoire announced the introduction of a ‘Living Income Differential’ (LID). This will be paid in addition to the market price for all cocoa sold by producers in these countries effective from October 2020, with an associated guarantee of a minimum farm gate price of US$1,820. Fairtrade believes in sharing the benefits of trade more equally and we welcome the move by the two governments to make progress towards a living income for cocoa farmers. FAIRTRADE COCOA Monitoring Report 10th Edition 7 While details of how the Living Income Differential will 4. fairtrade cocoa-producing countries be implemented had not yet been published at the time of writing, Fairtrade’s approach is to be as transparent as possible with our partners. For example, in 2018, we published our own research1 showing that only 12 percent Number of Fairtrade certified cocoa farmers in Côte d’Ivoire were Premium receied Volume sold as Fairtrade Number of Country of earning a living income. We are following up with targeted (€) MT farmers POs monitoring and evaluation efforts to find out what works to improve farmer incomes.