FLO Increases Cocoa Floor Price and Social Premium

Here’s a bit of welcome news. For the first time since 1997, the Fairtrade Labelling Organization (FLO) has increased the minimum fairtrade price for cocoa. Starting January 1, 2011, the minimum price will be $2,000/ton up from $1,600/ton. The social premium will also increase from $150/ton to $200/ton.

FLO is the global umbrella organization for all national fairtrade certifiers. It sets the fairtrade standards for the wide variety of goods now available on fairtrade terms. The increase in cocoa prices is long overdue as input costs of farmers have increased over the past thirteen years.

On a practical level, the increase of the minimum price won’t have any input as the market price continues to hover around $3,000/ton. But the increase in the social premium will have an immediate impact as cocoa farmer cooperatives will receive the social premium irrespective of the world market price.

Twin Trading is 25 Years Old

Twin Trading is not well known in the U.S., but it should be. Since 1985,  it has done more than any  agency to make fair trade real for ordinary farmers around the world. Starting with importing the first fair trade coffee to the UK to creating CafeDirect to helping found Kuapa Kokoo to launching Divine Chocolate, it has been a powerful force in support of fairtrade world wide. Check out this nice tribute on the Divine Chocolate Blog.

Hershey and Social Responsibility

Last week, the Hershey company released its Corporate Social Responsibility Report. Like many of such reports, it’s full of pretty pictures and statistics. What it does not mention is that Hershey is the only large chocolate maker in the US which has not yet participated in some form of third party certification for sourcing its cocoa. I’m not talking fair trade here, I’m talking any form of third party certification.

The folks at the International Labor Rights Forum have released their own report and it highlights four areas in which Hershey should make dramatic changes:

  • Sourcing – Hershey has no system in place to ensure that its cocoa is not produced with abusive child labor;
  • Transparency – Hershey does not reveal its cocoa suppliers, making verification impossible;
  • Greenwashing – Hershey points to is donations, but, again, there’s not system in place to address child labor;
  • Certification – Hershey has refused to enter into any certification, only a few of its Dagoba line bars are certified.

Given its long history of concern for  working people and the social conscience of its founder, it remains a puzzle why Hershey is not doing the right thing when it comes to sourcing cocoa from certified reputable sources.