Quite often we get asked, “Is your cacao fair trade?”
Our short answer: no. The truth is, fair trade isn’t nearly as fair as the system makes it out to be, and for this reason, we practice Direct Trade.
Here’s the long answer:
In a typical cacao sourcing model, smallholder cacao farmers sell their crop to a cacao collector, often referred to as a “coyote”, because they do not have the farmer’s best interest in mind and will often pay the farmers poorly. This cacao collector then resells the cacao to a regional or national processor, where cacao is aggregated and prepared for export. Large international trading houses in Europe and the US will purchase these exports, and finance and warehouse them. Then a chocolate company will buy the cacao from the trading house to make chocolate. Most companies sourcing this way have no idea who their farmers are, and couldn’t even find out if they wanted to.
For “Fair Trade” cacao, this model is essentially unchanged except the cacao is sold with a 10% premium, and a separate paper trail is maintained.
Here’s a way to visualize this model:
A deeper look into why Fair Trade isn’t fair
So “Fair Trade” pays a 10% premium to farmers above the market commodity rate. While on the surface this may sound good, commodity rates paid to cacao farmers are already below poverty level, so a 10% increase isn’t enough to have a substantial impact on the quality of life for them and their communities. Nor is it enough to create a truly mutually beneficial relationship between the cacao farmers and the cacao buyers.
In a place such as West Africa, where 70% of the world’s chocolate is sourced from, it’s widely known that cacao farmers will bulk up their bags of cacao with 10% non-cacao material like rocks, dirt, and sticks before selling their cacao. So basically, the Fair Trade premium is paying just enough to not get rocks in the cacao. Sadly, contaminated cacao is so widely accepted that large companies invest in specific machinery to sort out this foreign debris.
Do you really want to consume food and medicine that is mixed with rocks? Or consume food that is supposedly benefiting the farmers but isn’t enough to help them create the beautiful lives they deserve?
So now, let’s take a look at Ora Cacao’s Direct and Ethical Trade model.
The Benefits of Direct Trade
Here is our sourcing model by comparison:
You can see that there are far fewer middlemen, which means we get to have direct and personal relationships with farmers and partners around the world. Some of the key differences include:
- Smallholder cacao farmers sell their crop directly to a locally owned cacao organization
- The organization buys, ferments, dries, conducts quality analysis, and prepares the harvest for export, all under one roof
- Ora Cacao pays cacao prices that are actually sustainable for farmers, at minimum double the Fair Trade premium and often way more than that
- Direct & Ethical Trade pays the farmers what they need to cultivate high-quality cacao which results in a higher quality end product for consumers around the world
- Direct & Ethical Trade models help farmers and their communities to break out of cycles of poverty and live a higher quality life
- We don’t get rocks or foreign objects in our cacao because people are well paid ajd the cacao is respected
Our Direct & Ethical Trade model may not have an “official” certification, but for us,it’s not about the sticker. It’s about re-humanizing the supply chain by respecting the cacao, the people who work with it it, and the Earth. It’s about making a positive change in the world.
Direct Trade Cacao
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