Cargill Pays Premium

Cargill LogoCargill, the global food giant, joined the sustainability bandwagon in 2008 when the corporation joined the UTZ Certified Program for cocoa. In 2009, the first cooperatives in the Côte d’Ivoire had implemented the relevant codes of conduct and were certified by UTZ. Now, a year later, the first premium payments totaling $400,000 were made to two cooperatives–Co-operative Agricole de Fiedifoue and Coopaga.

For those of you puzzling over the proliferation of certification standards, here’s some explanation. Unlike fairtrade, which offers a guaranteed minimum price of $1,600/ton and a social premium of $150/ton, UTZ Certified does not guarantee any premium. Its main focus is on improving farming practices following a specific code of conduct that involves proper agricultural practices, concern for workers’ rights and concern for natural environment. Its operating principle is “a better product deserves a better price.”

That “better price” is called the UTZ premium. The premium is negotiated between buyer (in this case Cargill) and seller (in this case the two cooperatives mentioned). UTZ itself does not involve itself in these negotiations.

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