Double certification on farms may in part explain the big disparity, but are farmers simply missing out on premiums and selling at the regular cocoa price?
Big names in the chocolate industry have made honorable commitments to buy certified cocoa by 2020, but right now many firms are ducking out of paying premiums at the expense of cocoa farmers, some of the poorest people on the planet.
Unless the industry steps up to buy the cocoa at a certified premium, farmers will be discouraged to invest in good farming practices to boost yields – and that’s bad news for the quality and global supply.
In 2012, just 35%* of certified cocoa by the big three certifiers, UTZ Certified, Rainforest Alliance and Fairtrade was sold as certified.
534,614 metric tons (MT) of cocoa was produced on UTZ terms but under a quarter, 118,641 MT, was sold as UTZ cocoa.
Cost of certification
Cocoa farmers can go for certification to command a better price for their beans. But before they get there they must pay for the privilege.
It takes farmers around a year to get certified, according to a study by KPMG, and costs around $110 plus $35 for general agricultural practices (GAP) training in the first year. The cost is mostly subsidized by third parties but farmers need to invest a lot of their time and time is precious when you’re in a profession where many make $1.25 a day, below the widely agreed threshold of absolute poverty.
“I have had an insight into each [certification organization],” said Kwame Asa Ofori, a 65-year-old cocoa farmer from Ghana, who has previously struggled to sell UTZ cocoa. “I’ve been told that: ‘No I can’t give you 10 ghana cedis (£2.65) for a bag of cocoa’ that I’d gone through all these seven years being an organic producer as well as Fairtrade.”
It’s a common scenario. At the World Cocoa Conference earlier this year, International Cocoa Organization’s (ICCO) executive director Jean-Marc Anga asked farmers struggling to sell certified cocoa to stand up. Dozens rose from their seats leading Anga to say that certification was sold to the world a panacea concept, but farmers were too often struggling to find a buyer.
35% sold as certified in 2012
Farmers on certified farms are able to demand a premium for their cocoa beans – typically between $150 and-$200 per metric ton (MT) on top of the market price.
Mars, Hershey and Ferrero have all pledged to source only third party certified cocoa from multiple organizations such as UTZ, Fairtrade and Rainforest Alliance by 2020. Mondelēz and Nestlé purchase some certified cocoa, but have also developed their own sustainability programs and labels. Combined, these five companies make up over 60% of the global chocolate market.