How do Fair Trade and Rainforest Alliance approach deforestation?
Both Fairtrade cocoa and Rainforest Alliance cocoa involve auditing to ensure that farmers are keeping to their standards.
Fairtrade was previously a bit lax on deforestation, but tightened its standards in 2019. Its new standard demands that certified farmers “do not destroy vegetation in carbon storage ecosystems”.
Rainforest Alliance forbids deforestation, and it has developed a special ‘Cocoa Assurance Plan’ after it found 84 certified groups in April 2019 that contained farms in protected areas. It has now paused all new certifications in Ghana and Ivory Coast, while it gets GPS location data on all farms.
As poverty underlies all of the issues in cocoa, pricing is central.It is part of the general Fairtrade model to have a minimum price, which must be paid when the market price falls below it.
In cocoa, however, it is currently lower than the governments’, and won’t be doing anything. Rainforest Alliance has no minimum price.Fairtrade also has a price premium, which goes to the farmers co-op to spend on community projects. Its cocoa premium is $240/tonne, so about 13% of the farmgate price.
Rainforest Alliance has introduced a ‘minimum standard differential’ (basically a premium) of $70 per tonne, although it states that companies ought to pay more.
The average paid in 2019 was around $100 per tonne.This isn’t nothing. But Fairtrade readily admits that its prices are still below the living income level. It calculated a ‘Living Income Reference Price’ – the farmgate price that it believes that farmers need to live on – of $2200 per tonne in Cote d’Ivoire and $2100 in Ghana (equal to an export price of about $3000), plus the premium.
The VOICE network is not impressed, saying “..knowing how much you should pay, while not paying it, cannot be considered sustainable.”
But although the price supports may not be strong enough, as Fairtrade’s premium will be making a difference, we give a full additional mark in our Ethiscore system for Fairtrade-certified produce. As Rainforest Alliance’s premium is less than half the size of Fairtrade’s, it only gets a half.
'Big chocolate' corporate sustainability schemes
Most of the big chocolate companies now have their own sustainability schemes: Mondelēz (Cadbury)’s ‘Cocoa Life’, Nestlé’s ‘Cocoa Plan’, Hotel Chocolat’s ‘Engaged Ethics’, Mars’ ‘Cocoa for Generations’, and the Lindt & Sprüngli ‘Farming Program’.
These are largely focused on farmer training schemes to boost productivity, the execution of Cocoa & Forests Initiative plans, and some roll out of Child Labour Monitoring and Remediation Systems (CLMRS).
CLMRS schemes empower local representatives to tackle child labour, and have been found to have some success. And as Nick Weatherill, Executive Director of the International Cocoa Initiative (an organisation funded by the chocolate companies to tackle child labour), told us, “currently only about 10-20% of farmers in West Africa are covered by them.”
Company efforts to ramp them up are thus to be encouraged. However, overall these company schemes tend to be quite vague about what they actually contain and shouldn’t be seen as equivalent to Rainforest Alliance or Fairtrade.
Lindt, Mondelez, and Nestlé’s schemes do contain an auditing process, but the other schemes do not mention one. Many of them talk in vague terms about paying decent prices, but figures are lacking.
It is also pretty confusing for each company to have a scheme with its own special name, as if it is an external certification scheme, when these schemes are basically the companies’ own corporate responsibility programmes. A cynic might think that that is part of the point.