February 2005

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Producer Profile: Equal Exchange's New Chocolate Project


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Producer Profile:
Equal Exchange's Chocolate Bars Offer a Sweet(er) Treat

by Lynn Olson, Member Services Manager

“Cooperatives and100% fair trade; for us the two just go hand in hand. We actually think it’s kind of incongruous if you’re dealing with fair trade seriously, and not try to apply the same values to the organization that connects you with your co-workers." -Rodney North, Answer Man & Board Member, Equal Exchange

Since 1986, grocery cooperatives have enjoyed a steady, ethical partnership with Equal Exchange (EE) when founders set up this worker-cooperative. Equal Exchange is committed to fair trade and began by selling organic and fair trade certified coffee. Calling on the expertise of Swiss chocolatiers, EE has now begun to apply the same philosophy to cocoa, sugar and milk, sourcing ingredients from Paraguay, Peru, the Dominican Republic, Costa Rica, and right here in Wisconsin. Boston-area based Equal Exchange’s recent debut of organic, Fair Trade-certified Milk Chocolate, Dark Chocolate with Almonds and Very Dark Chocolate Bars offer more than just a rich, velvety indulgence.

“These chocolate bars offer a unique, empowering model of global trade,” according to Rodney North, Answer Man and Board Member for Equal Exchange. “They represent the efforts of an employee-owned and controlled cooperative, Equal Exchange, to bring a high quality, competitive product to market and share the benefits of international trade as equitably as possible. Eight small farmer cocoa, sugar and dairy cooperatives in five countries, as well as a worker cooperative in Canada, will participate directly in the success of these chocolate bars.”

Striking a balance
And a tasty bar of chocolate it is—the milk chocolate bar imparts a creamy memory for the palate, with a near-perfect blend of cocoa, fat and sugar. “For the sake of the whole fair trade ideal we do want to maximize the amount of chocolate we sell so we can maximize the amount of cocoa and sugar we buy.” Rodney commented, “So, you try to strike this balance between having tastes that we think are really interesting and exquisite but not too far out there because you still want it to be something that people are going to be ready for.”

When asked about any early successes with their new product, Rodney commented that they were in fact doing really well, “Especially through the natural food stores and [grocery] co-ops, since [grocery] co-ops have always been the first to get it. It’s been that way for years. It’s an audience that’s much more educated than any other group of shoppers.”

Child labor
Most important to any chocolate lover’s education is the well documented fact that child trafficking and slavery persist in conventional cocoa farming, primarily on small plantations in Côte d’Ivoire and other parts of Western Africa, the source of 70% of the world’s cocoa supply. A US State Department report in 2003 documented 109,000 children working in dangerous conditions in Ivory Coast alone. Some estimate as many as 211 million children work in situations that put their lives at risk, violate international core labor standards, and negatively impact their futures. Cocoa farming hazards include exposure to harmful pesticides and risk of injury from machetes in addition to the violation of their human rights. The United States’s response to the problem, the Harkin-Engel protocol signed in 2001, detailed steps to eliminate the acknowledged slavery practices occurring on cocoa plantations. Essentially an ultimatum, the $13 billion a year industry was given a July 1, 2005 deadline for meeting the final requirement to avoid the creation of legislation allowing “No Child Slavery” labels to be used on cocoa products when/if producers could, in fact, ensure the statement’s validity.

In response, large manufacturers have organized the International Cocoa Foundation to develop the strategies necessary to meet the requirements of the protocol. Much of the work being reported as accomplished has been the financial support of other organizations already working in that area, namely Winrock International’s CIRCLE initiative, a two-year pilot project called The Child Labor Alternatives through Sustainable Systems in Education (CLASSE). In Cote d’Ivore and Mali they have already begun working to promote training and educational alternatives for children and their families in those cocoa-growing regions.

Regrettably, The International Labor Rights Fund, an advocacy organization dedicated to achieving just and humane treatment for workers worldwide reported in June, 2004 that “The sum total of persons tangibly affected by these handful of projects is small vis à vis the total number of persons in cocoa production (including farmers, laborers, farmers’ children, technical agent, buyers, etc.) which, throughout the region, runs to the millions of persons.” Meanwhile, the July 1 deadline looms large for cocoa manufacturers in the US.

Another outlook
The outlook for a fair trade system in West Africa doesn’t appear to be close on the horizon because of the reluctance on the part of US manufacturers to pay a more realistic, fair trade price for their cocoa. When asked by Willy Street Co-op for their response to the use of Fair Trade in the production of their candy, Masterfoods USA, a division of Mars, Inc. (maker of M&M’s and other chocolates) replied, “A Fair-Trade system can also unintentionally encourage farmers to oversupply the market, which drives down prices and harms farmers’ income levels.”

Cocoa cooperatives
To anyone’s knowledge, Rodney states that there are currently no cocoa cooperatives working in that part of the world, but the Fair Trade Labor Organization is assisting TransFair USA (the only independent, third-party certifier of Fair Trade products in the United States) in certifying several other cooperatives in Ghana and Central America where conditions are monitored and members of the cooperatives are given democratic control over their crops and prices. Rodney explains EE’s decision to support these cooperatives: “Even if we were buying large amounts [of cocoa], we would avoid buying from the Ivory Coast because you don’t know what you’re perpetuating when you’re buying it. And since we know that there are reliable, clean sources, ones that we can feel good about, we’re going to go to them and try to support them in their efforts.”

Equal Exchange’s cooperative partners
As a function of any fair trade business listing sources is a vital step in establishing objectives. Equal Exchange is happy to list their cooperative partners for every step of their operation. Cocoa for the chocolate bars is purchased from three cooperatives: CONACADO in the Dominican Republic, CACVRA and El Quinacho cooperatives on the edge of the Peruvian Amazon. Sugar is provided by three groups in Paraguay: the Montillo, Arroyense, and Manduvirá cooperatives. The milk used in milk chocolate bars, is provided by Wisconsin’s own Organic Valley cooperative.

Ingredient sourcing
The sourcing of the ingredients is coordinated by another worker cooperative, La Siembra, in Ottawa, Canada. Like Equal Exchange, La Siembra is also a 100% Fair Trade organization, but it specializes in cocoa and sugar products. After purchasing cocoa, sugar and milk for EE chocolate bars, all of the ingredients are sent to their Switzerland manufacturer which has 75 years of experience in making fine chocolate. The 100% organic, fair trade finished product is returned to the United States and distributed across the country for conscientious connoisseurs to enjoy.

Being a part of the grassroots global economy
“We’re kind of on the witness stand to the discussion going on, on how to reform the world’s cocoa industry,” Rodney says. “And one of the things we were saying was, ‘Look, if nothing else, there are these Fair Trade- certified sources, and a good start to supporting them is to start buying from them, especially if you were to follow the Fair Trade requirements and ensure these [farmer] co-ops a decent price for their crop.’ Our little worker co-op, working together with another one in Canada found a way to bring together all these small farmers and their cooperative. When you add them all up it’s like eleven cooperatives in seven countries that have a hand in this, twelve if you add Willy Street Co-op. When it comes to this globalized economy where you have ingredients being sourced from around the world, we don’t have to just throw up our hands and go ‘Well, I guess it’s up to just Nestle and Hershey’s to do this, because it’s too big for us.’ But no, it’s not too big for us, including the farmers to the shoppers, we can be a part of this grassroots global economy.”