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The foundation is made up of about 60 member companies large and small, including Hershey, Mars, Starbucks, Jelly Belly, Kraft, Ghirardelli, Dagoba, See's and Chocolove.
The principles and goals were developed over the last two years with input from more than 50 of the foundation's members, and they cover profit, people and the planet.
Regarding the plant, the foundation wants to see more responsible and sound environmental stewardship in place at coca farms and in surrounding communities, including responsible soil and water use, rational use of agro-chemicals and implementation of Integrated Pest Management, a strategy that combines various methods with the goal of reducing pesticide use. Another planet-related goal include making sure all stakeholders understand, respect and value the benefits of biodiversity and environmental assets.
In the area of profit, the principles call for improved and equitable economic returns for farmers, ensuring productive farming practices are in place, using diversification as a tool for good farm management and developing an efficient and transparent cocoa value chain.
Lastly, when it comes to people, the goals include implementing national and international labor standards, safe farming practices, and strong and effective farmer organizations.
The principles will guide the foundations current and future programs, which are in place in West Africa, Southeast Asia and the Americas.
These Principles don't address an important contradiction
On the face of it, these are laudable standards and it is clear that there is some common ground between farmers, cocoa producing countries and industry. Each is interested in maintaining cocoa production into the long-term future. Farmers because they have invested an extraordinary amount of labor and capital into their farms. Producer countries because they depend on the export revenue and taxes for their budgets. The chocolate industry because that’s what they sell and they don’t want their business model to go down the tubes because cocoa has become scarce.
At the same time, there is a fundamental contradiction between farmers and the industry. The latter wants to ensure a steady or increasing supply of cocoa beans at the lowest price possible. Farmers, on the other hand, are primarily interested in income–not quantity.
A quick review of the programs supported by the WCF shows that its main emphasis is on increasing quantity (and, to some extent, quality). The term “more productive, profitable framing practices” in the first objective highlights that objective.
I have pointed out before on my blog that while it it in the interest of an individual farmer to increase output, the collective impact, given the concentration of cocoa production in West Africa, is not beneficial to farmers, as it will increase supply and thus exert downward pressure on prices.
The experience in the Côte d’Ivoire over the past several months has highlighted how decreasing supply has resulted in higher farm gate prices. Clearly, the opposite holds true as well.
The only scenario that supports both increased supply and stable or increasing prices is a significant and sustained increase in the demand for chocolate world-wide. Yes, we’ve all heard about the Chinese and Indian middle class developing a taste for chocolate, but it is not at all clear how this demand will materialize.
International Cocoa Organization, in its annual market forecasts of March 2008, predicted an annual growth rate of 2.8% in cocoa grindings, an indicator of demand. That’s hardly a dramatic level of growth. The further deterioration of the global economy since then will likely reduce that level for the next few years.
The sustainability principles and goals, laudable as they are, do not address this contradiction.