Cadbury, the latest convert to fairtrade, announced on Monday its plans for disbursing the first installment of its social premium. The funds, £500,000 ($751,215), will be invested in projects determined by the farmer cooperatives that supply the cocoa. One of the beneficiaries, the Kuapa Kokoo cooperative, will use its share to improve health services for its members through the deployment of mobile clinics and farmer extension services.
A quick refreshers. The social premium of $150/ton is, in my opinion, the most important aspect of the fairtrade arrangement. The premium is paid even if the market price is above the $1,600 floor price guaranteed by fairtrade. It provide funds for community based improvements, ranging from water pumps or toilets, to broader social services such as schools or the mobile clinics proposed by Kuapa Kokoo.
Cadbury’s decision to adopt the fairtrade certification and to include more of its product lines has quadrupled the amount of fairtrade cocoa exported from Ghana and thus quadrupled the amount of social premium paid. Cadbury fairtrade products are currently available in the Britain, Ireland, Canada, New Zealand and Australia.